Category: Stock Market

On Monday, the S&P/ASX 200 Index (ASX: XJO) had a strong start to the week and charged higher. The benchmark index rose 0.7% to 7,682.4 points.

Will the market be able to build on this on Tuesday? Here are five things to watch:

ASX 200 expected to rise again

The Australian share market is expected to rise again on Tuesday following a strong start to the week on Wall Street. According to the latest SPI futures, the ASX 200 is poised to open the day 41 points or 0.5% higher. In the United States, the Dow Jones was up 0.45%, the S&P 500 was up 1%, and the NASDAQ rose 1.2%.

ANZ half year results

All eyes will be on the ANZ Group Holdings Ltd (ASX: ANZ) share price on Tuesday when the banking giant becomes the latest big four member to release its results. A note out of Goldman Sachs reveals that its analysts are expecting the bank to report cash earnings (before one-offs) of $3,683 million for the first half. This represents a 4% decline on the prior corresponding period. This is ahead of the consensus estimate of $3,531 million. Goldman also expects an 81 cents per share dividend and a $1.5 billion share buyback.

Oil prices rise

ASX 200 energy shares Santos Ltd (ASX: STO) and Karoon Energy Ltd (ASX: KAR) could have a good session on Tuesday after oil prices rose overnight. According to Bloomberg, the WTI crude oil price is up 0.65% to US$78.60 a barrel and the Brent crude oil price is up 0.55% to US$83.41 a barrel. Oil prices pushed higher despite confusion over whether a Gaza ceasefire had been accepted.

NAB shares are going ex-dividend

National Australia Bank Ltd (ASX: NAB) shares are going ex-dividend this morning and are likely to trade lower. Last week, the banking giant released its half-year results and declared a fully franked interim dividend of 84 cents per share. Eligible shareholders won’t have to wait too long until pay day. NAB is currently scheduled to make its payment on 3 July.

Gold price charges higher

ASX 200 gold shares such as Evolution Mining Ltd (ASX: EVN) and Regis Resources Limited (ASX: RRL) could have a positive session on Tuesday after the gold price charged higher overnight. According to CNBC, the spot gold price is up 1.1% to US$2,333.8 an ounce. A softer US dollar and rate cut hopes boosted the precious metal.

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

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More reading

• Here are the top 10 ASX 200 shares today
• What you need to do to secure the next NAB dividend
• What can ASX 200 investors expect from the RBA interest rate call tomorrow?
• These are my top ASX 200 share picks for growth right now
• Forget NAB and buy these ASX dividend shares

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.

BHP Group Ltd (ASX: BHP) shares have been closely linked to the performance of the iron ore price over the last few years. But copper could have a growing influence on the ASX mining share as time goes on.

BHP is already one of the largest copper miners in the world, but it wants to increase its exposure further. Of BHP’s US$27.2 billion revenue in the first-half period, copper was responsible for US$8.66 billion of that revenue.

Anglo-American acquisition attempt

The mining giant recently confirmed it had made a bid for the large UK-listed miner Anglo-American. It offered 0.7097 BHP shares for each Anglo-American share.

There were a few different reasons for that bid.

BHP said it would increase its exposure to future-facing commodities, including copper assets. These assets would add growth and diversification to its existing portfolio.

Other benefits include additional iron ore and metallurgical coal projects, as well as the ability to deliver meaningful synergies.

Some large institutional investors have given their blessing to BHP’s pursuit of Anglo-American and copper plays in general. According to reporting by the Australian Financial Review, HESTA chief executive Debby Blakey said:

Australian mining companies stand to benefit from boosting their exposure to transition minerals.

These commercial opportunities must also have the appropriate scale and efficiencies to meet the expected surge in demand for future-facing commodities.

Critical minerals are key to supporting the energy transition, given the need for a rapid shift to clean energy technology.

On The Bull, Tom Bleakley from BW Equities (who rates BHP shares as a hold) said BHP was the “conservative path for exposure to the copper price”, though he pointed out iron ore was still currently the “dominant driver” of BHP’s revenue and earnings.

Two tailwinds for the copper price

The fund manager, L1 Capital, thinks both supply and demand could help copper’s medium-term fundamentals.

L1 said there was robust demand growth due to “electrification tailwinds, incremental data centre and AI-related demand, as well as the potential for improving global manufacturing activity on easy monetary policy.”

There is also “constrained supply resulting from the insufficient number of new major mines planned over the next decade and the significant decline of the existing production base.”

L1 expects copper market deficits to “continue to widen over time, with copper prices moving closer to scarcity pricing over the next few years”. The fund manager suggests physical deficits are “virtually unavoidable”.

BHP share price snapshot

Since the start of 2024, the BHP share price has dropped by 15%, as we can see in the chart above.

The post How important is copper for the future of BHP shares? appeared first on The Motley Fool Australia.

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More reading

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• Invest $10,000 in BHP shares and get $480 in passive income

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.

Cheap ASX dividend shares are a good source of passive income. People who are about to retire might like a boost to their portfolio’s dividend yield.

Ideally, good income ideas should be ones that pay an appealing yield and can deliver growth of the dividend/share price over time to account for inflation and deliver pleasing total returns.

The positive difference a good dividend yield can make may be a huge addition to how much cash flow a retiree receives.

For example, if someone has a $750,000 portfolio that yields 4%, that would generate $30,000 of annual income. If the portfolio had a 6% dividend yield, that would result in $45,000 of annual income.

What ASX dividend shares are cheap?

I wouldn’t suggest buying a share just because it has fallen. A share price that falls can be expensive. I’d want to identify businesses that are facing a shorter-term sell-off and could recover, or are trading at a cheap level to their underlying assets/cash flow generation.

In my mind, sometimes we can find whole sectors that are disliked and undervalued. During 2022, I wrote many times about global/ASX tech shares being undervalued.

A lot of the market has rallied strongly over the past few months, making opportunities harder to find.

But, there are still a few cheap ASX dividend shares that look good value to me.

For starters, there are some ASX retail shares that are seeing some challenging conditions now, but earnings could accelerate in FY25 and FY26. According to Commsec, shoe retailer Accent Group Ltd (ASX: AX1) could pay a grossed-up dividend yield of over 10% and youth apparel business Universal Store Holdings Ltd (ASX: UNI) might pay a grossed-up dividend yield of over 8% in FY26.

Higher interest rates are undoubtedly an issue for real estate investment trusts (REIT) because these commercial property businesses tend to have sizeable debt on their balance sheet.

I’m looking at farmland REIT Rural Funds Group (ASX: RFF) with a current yield of 5.78% and diversified property owner Charter Hall Long WALE REIT (ASX: CLW) with a yield of 7.89% as opportunities in the property sector. Both of them are seeing solid contracted rental income growth.

Brickworks Limited (ASX: BKW) is another ASX dividend share with a significant asset base, including a large property portfolio, though the grossed-up dividend yield is only 3.5%.

Telstra Group Ltd (ASX: TLS) has returned to giving investors dividend increases after a difficult period due to the NBN transition. The company is benefiting from increasing subscriber numbers. It’s trading at close to a 52-week low and currently has an annualised grossed-up dividend yield of 7.2%.

Diversification is important, so I think a portfolio of the above ASX dividend shares could be a solid starting point.

The post Almost ready to retire? I’d buy cheap ASX dividend shares for income appeared first on The Motley Fool Australia.

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More reading

• Forget NAB and buy these ASX dividend shares
• Buy these ASX dividend stocks that have 7%+ yields
• 5 ASX dividend shares to buy next week
• Where I’d invest $10,000 in ASX shares for passive income
• Is Brickworks the best stock to buy in the ASX 200 right now?

Motley Fool contributor Tristan Harrison has positions in Accent Group, Brickworks, and Rural Funds Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Brickworks. The Motley Fool Australia has positions in and has recommended Brickworks, Rural Funds Group, and Telstra Group. The Motley Fool Australia has recommended Accent Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The AGL Energy Limited (ASX: AGL) share price has taken a painful 23.54% tumble since July 2023, as seen on the chart below.

It has seen a lot of volatility with the changing energy prices, as well as the unpredictability of the strength of Australia’s summers and winters.

But, AGL shares have been on the rise in recent weeks. We recently heard from the Australian Energy Regulator that in the first quarter of 2024:

Average quarterly prices were higher than the preceding quarter in all regions. Prices ranged from $69/MWh in Tasmania to $137/MWh in Queensland. Weather was a key price-driver, with heat causing higher demand while a severe storm in Victoria caused network outages.

…Heat and humidity drove record maximum demand in Queensland (11,055 MW) while Victoria and South Australia had record minimum demands for a Q1.

Is the AGL share price a buy?

Energy generators and energy retailers are facing significant change in the coming years with an expectation that coal power can be largely replaced by renewable energy over time

The business has grown its development pipeline to 5.8GW in pursuit of its goal of 12GW by 2035, with an interim target of 5GW by 2030.

AGL said as it builds its pipeline, it will “periodically review market dynamics, customer demand and development options and seek to accelerate options and the decarbonisation pathway where possible.”

It also has 800MW of new grid scale batteries in operation, in testing or under construction. The 250MW Torrens Island battery became operational in August. Construction is underway for the 500MW Liddell battery at its Hunter energy hub in NSW, following the final investment decision in December.

AGL sees growth potential as it helps customers like Microsoft, CSL Ltd (ASX: CSL) and NBN Co electrify and decarbonise.

The broker UBS thinks AGL shares are a buy, with a price target of $11.25. UBS said:

With the lowest cost generation portfolio in the market, we expect AGL to deliver a strong earnings profile over FY25-28e. If AGL continues to maintain solid generation availability (as it has over the past 12 months), we believe earnings could surprise to the upside, particularly following other (higher cost) thermal generators exiting the market.

While earnings may fall in FY25 according to UBS, AGL is projected to make earnings per share (EPS) of $1.24 in FY27 and $1.32 in FY28. That would put the current AGL share price at under 8x FY27’s estimated earnings and 7x FY28’s estimated earnings.

The UBS forecasts also suggest AGL could pay a dividend yield of 8.25% in FY27 and 8.8% in FY28, which is before any potential franking credits.

Bonus tailwind

One thing that could be a real (extra) boost in demand for energy is AI and data centres.

As reported by the Australian Financial Review in April, a boom in data centre demand could mean a tripling of demand for the poles and wires company (Endeavour Energy) that services Sydney’s western suburbs. Endeavour Energy has 16 data centres in its distribution area, 19 applications for connection and 18 additional inquiries.

In a submission to the Australian Energy Market Operator, Endeavour Energy said:

If realised, we expect data centres alone to reach a peak demand…representing over 250 per cent of our total network demand today.

While I’m not expecting a large increase in energy prices, I think the data centre-fuelled demand could be enough to make AGL shares more attractive than the market is suggesting right now.

The post Down 24% since July, are AGL shares a cheap buy? appeared first on The Motley Fool Australia.

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More reading

• Here’s how I’d aim for a tonne of passive income from $20,000 in an ASX share portfolio
• 2 unexpected ASX 200 stocks to buy now for the AI revolution
• Here’s how the ASX 200 market sectors stacked up last week
• Here are the top 10 ASX 200 shares today
• Here’s how the ASX 200 market sectors stacked up last week

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL and Microsoft. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has recommended CSL and Microsoft. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Warren Buffett is without question the most famous investor in the world. At 93 years old, Buffett is one of the world’s richest people, with an estimated fortune of around US$140 billion.

Buffett has been investing in shares for decades, and his astronomical returns over the past six or seven decades is a source of inspiration for almost all investors.

Thankfully, Buffett has never been shy when it comes to educating other investors and teaching his secrets to investing success. Over the weekend, Buffett hosted the annual shareholders meeting of his company Berkshire Hathaway Inc (NYSE: BRK.A)(NYSE: BRK.B), famously held in his hometown of Omaha, Nebraska.

Routinely dubbed the ‘Woodstock for capitalists’, this annual meeting has Warren Buffett appear in front of crowds of shareholders and admirers and answer questions for hours. It’s essential viewing for any aspiring value investor.

Buffett is famous for his long-term ‘buy-and-hold’ investing style. He notably once said that his favourite length of time to own a share is ‘forever’.

With this in mind, it was rather strange to see that Buffett had made a substantial sale of Berkshire’s largest individual stock holdings when the company’s most recent 10Q report came out just before the meeting. That largest holding is none other than the iPhone maker Apple Inc (NASDAQ: AAPL).

Buffett sells US$21 billion worth of Apple stock

Yes, Berkshire’s most recent 10Q filing – which covers the three months to 31 March 2024 – shows that Berkshire offloaded approximately 115 million Apple shares over the quarter in question. At recent pricing, this sale would amount to roughly US$21 billion worth of stock.

To be fair, Buffett, through Berkshire, still has a US$144.8 billion position in Apple. It remains Berkshire’s largest single holding by far, making up just over 40% of the company’s stock portfolio.

But it is odd to see Buffett selling down this position by more than US$20 billion, given what he has said in the past about his love of owning high-quality companies forever.

So what gives? Well, Buffett was asked about Apple at the Berkshire meeting over the weekend, and whether his positive outlook on the company has changed.

Here’s some of what he said:

No… But we have sold shares, and I would say that at the end of the year, I would think it extremely likely that Apple is the largest common stock holding we have now…

We will have Apple as our largest investment, but I don’t mind at all, under current conditions, building the cash position. I think when I look at the alternative of what’s available, the equity markets, and I look at the composition of what’s going on in the world, we find it quite attractive…

And I would say with the present fiscal policies, I think that something has to give, and I think that higher taxes are quite likely, and the government wants to take a greater share of your income, or mine or Berkshire’s, they can do it…

And if I’m doing it at 21% this year and we’re doing it at a higher percentage later on, I don’t think you’ll actually mind the fact that we sold a little Apple this year.

Taxes and risk-free returns

So it seems that Buffett reckons some of the capital that Berkshire has deployed in Apple is better off sitting in cash right now. With interest rates at decade-highs, Berkshire can get a risk-free rate of over 5% on its cash right now.

It seems that Buffett would prefer to get this ‘safe’ level of return on that US$21 billion in the current climate rather than have it invested in Apple.

He also alludes to perhaps taking advantage of the current low US corporate tax rate to crystalise some of the extraordinary gains Berkshire has made on its Apple investment over time.

It could be that Buffett would rather pay a 21% corporate tax rate today than pay a higher rate in the future if he feels that trimming Berkshire’s Apple position is inevitable.

The post Why has Warren Buffett just sold $20 billion of his biggest investment? appeared first on The Motley Fool Australia.

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More reading

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• New record high: Is it too late to buy Wesfarmers shares?
• These 2 ASX uranium shares just smashed multi-year highs!
• Brainchip share price rockets 14% on patent news

Motley Fool contributor Sebastian Bowen has positions in Apple and Berkshire Hathaway. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Apple and Berkshire Hathaway. The Motley Fool Australia has recommended Apple and Berkshire Hathaway. 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.

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More reading

• Leading brokers name 3 ASX shares to buy today
• Why Carnarvon Energy, Goodman, Nickel Industries, and Southern Cross Electrical are rising
• Everything you need to know about the supersized Westpac dividend
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• 3 excellent ASX 200 blue chip shares to buy in May

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

With so many shares to choose from on the Australian share market, it can be difficult to decide which ones to buy. The good news is that brokers across the country are doing a lot of the hard work for you.

Three top ASX shares that leading brokers have named as buys this week are listed below. Here’s why they are bullish on them:

Macquarie Technology Group Ltd (ASX: MAQ)

According to a note out of Morgan Stanley, its analysts have retained their overweight rating and $100.00 price target on this technology company’s shares. The broker is particularly bullish on Macquarie Technology due to its fast-growing data centre business. And following a review of the data centre industry, it believes the market is undervaluing these assets. Especially given how they could be a great way for investors to gain exposure to structural tailwinds from the artificial intelligence (AI) boom. In addition, the broker feels the rest of the business is well positioned for the future. The Macquarie Technology share price is trading at $83.80 this afternoon.

Nickel Industries Ltd (ASX: NIC)

A note out of Bell Potter reveals that its analysts have retained their buy rating on this nickel producer’s shares with an improved price target of $1.54. This follows the release of a quarterly update that was a touch short of expectations for production and costs but largely in line for earnings. Overall, the broker remains positive on Nickel Industries and believes its shares are cheap at current levels. Bell Potter highlights that it continues to trade on undemanding valuation multiples, offers a supportive dividend, and has demonstrated its ability to make money through the nickel price cycle. The Nickel Industries share price is fetching 98 cents on Monday afternoon.

Qube Holdings Ltd (ASX: QUB)

Analysts at Goldman Sachs have retained their buy rating on this logistics solutions company’s shares with an improved price target of $3.95. The broker attended Qube’s investor day event and was pleased with what it heard. Goldman believes that the company’s Patrick operation is unmatched and has an advantage at Port Botany via automation, its 1,400m quay line, and efficiencies. Another positive is that trading conditions are improving and execution risks at Moorebank are reducing. All in all, this led to the broker boosting its earnings estimates for the coming years and its valuation accordingly. The Qube share price is trading at $3.53 this afternoon.

The post Leading brokers name 3 ASX shares to buy today appeared first on The Motley Fool Australia.

More reading

• Why Carnarvon Energy, Goodman, Nickel Industries, and Southern Cross Electrical are rising
• These ASX stocks could rise 30% to 85%
• Here are the top 10 ASX 200 shares today
• 9 ASX All Ords shares elevated to ‘strong buy’ status in April
• Why Meteroic Resources, NAB, PEXA, and Qube shares are pushing higher today

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.