Category: Stock Market

A number of ASX lithium shares have seen a big jump in profitability over the past 12 months as lithium prices soared. Shareholders could reap some of the benefits in 2023 if dividends flow to investors.

It has been a very volatile time for the sector, with sentiment reaching exuberance a few months ago, and then falling back over the last two months. We can see that in the share price of the first ASX lithium share, I’m going to mention.

Pilbara Minerals Ltd (ASX: PLS)

In mid-November, Pilbara Minerals announced that favourable market conditions and strong operating margins support the establishment of a capital management framework, including starting to pay dividends.

It’s going to balance investing for growth and rewarding shareholders.

The ASX lithium share intends to target a dividend payout ratio of between 20% to 30% of free cash flow. Management plan to start paying a dividend in FY23.

How big will the dividend be?

Commsec numbers suggest it could pay an annual dividend per share of 15 cents. The grossed-up dividend yield could be 5.4% as management is expecting to pay a fully franked dividend.

Mineral Resources Ltd (ASX: MIN)

Mineral Resources is both an ASX lithium share and an ASX iron ore share. The company is currently working on increasing its scale and earnings in both lithium and iron ore.

The company has said its five-year plan is to reach around 118,000 kt per annum.

While the business is investing in growth, it’s also paying dividends to investors each year.

Commsec numbers suggest it could pay a grossed-up dividend yield of 6.7%.

IGO Ltd (ASX: IGO)

This ASX lithium share is focused on discovering, developing, and delivering products critical to clean energy.

IGO says that it “owns and operates the Nova nickel-copper-cobalt operation, the Forrestania nickel operation and the Cosmos nickel operation – all in Western Australia. IGO is also invested in a lithium focused joint venture with our partner, Tianqi lithium Corporation, which comprises a 51% stake in the Greenbushes lithium mine and 100% interest in a downstream processing refinery at Kwinana producing battery grade lithium hydroxide.”

According to Commsec, it could pay an annual dividend per share of around 34 cents. That could be a grossed-up dividend yield of 3.3%.

The post Which ASX lithium shares are forecasting to pay dividends in 2023? appeared first on The Motley Fool Australia.

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More reading

• Own ASX lithium shares? Here’s the latest lithium price forecast
• Here are the 3 most heavily traded ASX 200 shares on Friday
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• Why Integrated Research, Macquarie, Pilbara Minerals, and South32 shares are pushing higher

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.

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The Insurance Australia Group Ltd (ASX: IAG) share price has outperformed the market over the last 12 months, gaining 6.9% in that time. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) has slipped 1.2%.

However, zooming out, the stock’s long-term performance isn’t so strong. The IAG share price has fallen around 5.5% over the last 10 years.

If an investor were to have bought $1,000 worth of the insurance stock in January 2013, they likely would have walked away with 196 shares, paying $5.10 apiece.  

Today, that parcel would be worth $944.72. The IAG share price is currently $4.82.

For comparison, the ASX 200 has gained around 54% over the last decade.

But how has our figurative investment performed when we factor in dividends offered by IAG in that time? Let’s take a look.

How much have IAG shares paid in dividends in 10 years?

Here are all the dividends IAG shares have paid since January 2013:

IAG dividends’ pay date	Type	Dividend amount
September 2022	Final	5 cents
March 2022	Interim	6 cents
September 2021	Final	13 cents
March 2021	Interim	7 cents
March 2020	Interim	10 cents
September 2019	Final	20 cents
March 2019	Interim	12 cents
November 2018	Special	5.5 cents
September 2018	Final	20 cents
March 2018	Interim	14 cents
October 2017	Final	20 cents
March 2017	Interim	13 cents
October 2016	Final	13 cents
March 2016	Interim	13 cents
March 2016	Special	10 cents
October 2015	Final	16 cents
April 2015	Interim	13 cents
October 2014	Final	26 cents
April 2014	Interim	13 cents
October 2013	Final	25 cents
April 2013	Interim	11 cents
Total:		$2.855

As per the chart above, IAG shares have each offered investors $2.855 in dividends over the last decade.

That means our 196-share parcel would likely have paid out $559.58 in dividends – leaving our figurative investor in the green.

Indeed, factoring in both dividends and share price movements, IAG stock boasts a return on investment (ROI) of 50% over the 10 years just been.

On top of that, many of the dividends offered by the company in that time have been fully franked. Thus, they could have brought additional benefits for some shareholders at tax time.

IAG shares currently trade with a 2.28% dividend yield.

The post Bought $1,000 of IAG shares 10 years ago? Here’s how much dividend income you’ve pocketed appeared first on The Motley Fool Australia.

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More reading

• Are ASX 200 retail shares on sale in 2023?
• 3 reasons why small-cap ASX shares could rocket in 2023
• 5 things to watch on the ASX 200 on Monday
• Burning hot: The outlook for ASX 200 energy shares in 2023
• 3 reasons to invest in the ASX 200 in 2023

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

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ASX dividend shares can be a very useful way to grow an investor’s passive income.

Businesses that pay a healthy amount of their profit out each year can offer attractive dividend yields.

I think that ASX blue-chip shares can provide good stability. But, I believe smaller ASX shares have more room to grow earnings and therefore boost the dividend over time.

With that in mind, I’d utilise the below two ASX dividend shares for passive income.

Universal Store Holdings Ltd (ASX: UNI)

This is an ASX retail share that has retail businesses and wholesale businesses. Its core businesses are Universal Store and THRILLS. The business is also trialling the ‘Perfect Stranger’ brand as a standalone retail concept. Universal Store has around 80 stores.

In FY23, it could pay a grossed-up dividend yield of 7.4% according to Commsec. By FY25, it could be paying a grossed-up dividend yield of 9.7%.

Its brands are focused on on-trend apparel products for fashion-focused 16 to 35-year-olds.

FY23 has started strongly, with total group sales (excluding THRILLS) up 40.2% year over year. It opened three new stores before Christmas and it’s planning to open another four to five new Universal stores in the second half of FY23.

The end of lockdowns could lead to a good boost of profitability in FY23 and beyond for the ASX dividend share, particularly as scale helps the business hopefully achieve higher margins. This could help it grow passive income for shareholders.

According to Commsec, the Universal Store share price is valued at 13 times FY23’s estimated earnings.

Accent Group Ltd (ASX: AX1)

Accent is a shoe retailer that owns some brands and acts as the distributor for other brands. Some of those brands include The Athlete’s Foot, Glue Store, Skechers, Dr Martens, VANS, CAT, Timberland, Hoka, Kappa and Nude Lucy.

The business has started FY23 strongly. In the first 18 weeks of FY23, total sales were up 52% year over year and the gross margin had improved by 570 basis points. It’s also benefiting from the end of lockdowns. It was expecting to open around 50 stores in the first half of FY23.

With Accent’s rebound in profitability, Commsec expects it to pay a grossed-up dividend yield of 7.4% in FY23. The grossed-up dividend yield might be 9.8% by FY25.

The company could be very good value. According to Commsec, it’s priced at 15 times FY23’s estimated earnings.

$100 per week of passive dividend income

Both of these names have a grossed-up dividend yield of 7.4%. Annualised, $100 per week is $5,200 per year. Investing the same amount in each ASX dividend share would need a total of $70,270 at the current share prices.

However, with the dividend growth predicted over the next couple of years, the total dividend income could grow to $6,851, which would be an average of over $130 per week by FY25.

The post 2 passive income ideas I’d use to generate $100 a week in 2023 appeared first on The Motley Fool Australia.

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More reading

• Here are some top ASX dividend share ideas according to experts
• Top ASX dividend shares to buy in January 2023
• Buy these ASX dividend shares for a passive income: experts
• Brokers name 2 ASX dividend shares to buy now
• Buy these cheap ASX dividend shares: Goldman Sachs

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

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With China’s reopening from the pandemic expected to lead to increased demand for commodities, the mining sector looks set to be the place to be again in 2023.

But which ASX 200 mining shares should you buy? Listed below are two ASX 200 mining shares that analysts are tipped as buys by analysts. Here’s what they are saying about them:

Allkem Ltd (ASX: AKE)

Although Goldman Sachs expects lithium prices to tumble from the second half of 2023, it still believes that Allkem is an ASX 200 mining share to buy. This is because it expects Allkem’s production growth to offset the softer prices.

This could make it a top option in the lithium space. Because if China’s reopening means that lithium prices don’t weaken as Goldman expects, it would likely lead to materially better earnings from Allkem. So, investors arguably win either way. Goldman commented:

Allkem has one of the best production outlooks in our lithium coverage, with broad-based growth optionality, second only to Mineral Resources on an LCE basis when including downstream hydroxide production on an equity basis. This drives our forecast for the company’s equity LCE production growth of >4x by FY27E, supporting earnings rebounding to near current record levels despite the declining lithium price environment.

The broker currently has a buy rating and $15.20 price target on Allkem’s shares.

South32 Ltd (ASX: S32)

The team at Morgans believe that South32 is one of the best ASX 200 mining shares to buy right now.

This is because of the successful transformation of its portfolio, its exposure to copper, and its positive long term outlook. The broker expects this to support strong earnings and dividends in the near term.

Its analysts explained:

S32 has transformed its portfolio by divesting South African thermal coal and acquiring an interest in Chile copper, substantially boosting group earnings quality, as well as S32’s risk and ESG profile. Unlike its peers amongst ASX-listed large-cap miners, S32 is not exposed to iron ore. Instead offering a highly diversified portfolio of base metals and metallurgical coal (with most of these metals enjoying solid price strength). We see attractive long-term value potential in S32 from de-risking of its growth portfolio, the potential for further portfolio changes, and an earnings-linked dividend policy.

Morgans has an add rating and $5.40 price target on South32’s shares.

The post 2 ASX 200 mining shares to buy as China reopens: analysts appeared first on The Motley Fool Australia.

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More reading

• Own ASX lithium shares? Here’s the latest lithium price forecast
• Here are the 3 most heavily traded ASX 200 shares on Friday
• Brokers name 3 ASX shares to buy today
• 6 ASX mining shares just upgraded by brokers
• Broker says Allkem share price can rise 20% even if lithium prices fall

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

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S&P/ASX 200 Index (ASX: XJO) retail shares have seen a lot of pessimism over the last 12 months. But with a number of them trading at much lower share prices, are they now bargain buys?

Take Wesfarmers Ltd (ASX: WES) shares as an example. Wesfarmers is the owner of Bunnings and Kmart. Its share price is 27% lower than it was in August 2021 and it’s down 13% compared to mid-January 2022.

.

Investors need to ask themselves a few questions.

How much pain are the ASX 200 retail shares really going to report in FY23?

Have the share prices overreacted for what may only be a short-term problem?

Are they now opportunities?

I’m going to look at each of those questions.

FY23 pain?

ASX 200 retail shares may not see too much pain at all.

Coles Group Ltd (ASX: COL) and Woolworths Group Ltd (ASX: WOW) generate most of their earnings from supermarkets, which I think means their earnings will be fairly consistent and defensive. Metcash Limited (ASX: MTS), the hardware business and supplier to IGAs, saw a strong first half of its FY23 and reported ongoing growth in the first few weeks of FY23’s second half.

Harvey Norman Holdings Limited (ASX: HVN) has started FY23 off with total sales growth in the first four months of the financial year, as did JB Hi-Fi Limited (ASX: JBH), Super Retail Group Ltd (ASX: SUL), and Premier Investments Limited (ASX: PMV) as they cycle against lockdowns in the first half of FY22 when many stores were shut.

Wesfarmers has said its retail store sales are doing well in the first few months of FY23.

Lovisa Holdings Ltd (ASX: LOV) sales and earnings are jumping higher as the company continues its global store rollout.

Breville Group Ltd (ASX: BRG) has said its business is performing to its expectations.

Despite many of them reporting impressive growth, their share prices are lower.

According to the Australian Bureau of Statistics (ABS), retail trade figures for November 2022 showed a 1.4% month-over-month rise in total Australian turnover and a 7.7% rise year over year.

Is it an overreaction?

Inflation and higher interest rates could cause a problem during 2023.

The higher repayments can take a while to flow through to mortgage holders, particularly ones that have been on, or are on, a fixed-rate mortgage. Will we see a sudden drop in retail spending growth? Perhaps even a decline?

It’s quite possible. Plus, unemployment could rise. As well, ASX bank share arrears could increase.

Investors could justifiably point to a number of factors that could mean 2023 is not a good year for ASX 200 retail shares.

But the first half seems like it’s going to be a solid report for many of the names I’ve mentioned.

Keep in mind that share prices are meant to reflect the long term, not just what’s going to happen in the next six or twelve months.

While higher interest rates are meant to push valuations lower, I think some are too low considering many of these businesses continue to grow their store count and potentially gain from scale benefits.

Are ASX 200 retail shares in the bargain basket?

They aren’t as cheap as they were a few months ago. However, I believe any negative hits to earnings will be time-limited to the next 12 to 18 months. A reduction in official interest rates in the future could mean a good boost to sentiment.

I’m very optimistic about the future of Wesfarmers, Premier Investments, Metcash, and Lovisa. So, at the current prices, they’d be the first four I’d buy in the sector.

Smaller ASX retail shares which have been hit even harder over the last year could be even more tantalising opportunistic ideas to consider at the lower share prices.

The post Are ASX 200 retail shares on sale in 2023? appeared first on The Motley Fool Australia.

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More reading

• Waiting for ASX shares to bottom? Why you could miss out on a stock market rally
• 3 reasons why small-cap ASX shares could rocket in 2023
• 5 things to watch on the ASX 200 on Monday
• Burning hot: The outlook for ASX 200 energy shares in 2023
• Buy these ASX 200 dividend shares when the market reopens: analysts

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 Harvey Norman, Lovisa, and Super Retail Group. The Motley Fool Australia has positions in and has recommended Coles Group, Harvey Norman, Super Retail Group, and Wesfarmers. The Motley Fool Australia has recommended Jb Hi-Fi, Lovisa, Metcash, and Premier Investments. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The ASX share market has seen plenty of volatility over the past year. But, for investors waiting for another low, it might be time to start investing.

There isn’t a bell that rings that tell us when the bear market low has been reached. There were two moments of lows for the S&P/ASX 200 Index (ASX: XJO) in 2022 – in June and the end of September/start of October. Volatility is likely to continue but we may have already seen the bottom.

I think the market tends to hit its lowest when things are looking the most unknown. When it seems uncertain how things are going to go, I believe that’s when share prices decline the most. However, when the bad factors are known and predicted, that seems to be when investors are more comfortable with the situation and share prices start rising.

For example, interest rates are even higher in the US and Australia than a few months ago. That’s meant to put even more pressure on valuations, in theory. Yet, the ASX 200 is up by around 14% since 20 June 2022.

Why I think it’s time to invest in ASX shares

I want to buy ASX shares as cheaply as possible. But, history tells me the low prices, as we’ve seen over the past several months, are likely to stick around only for so long. The share market and earnings have risen over time and I think that can continue in the coming years.

If we can buy investments at a cheaper price then it will help long-term returns, including a better dividend yield. As well, US inflation may be starting to come down.

We don’t know what share prices are going to do in the future, but I can see a wide range of opportunities on the ASX today.

By the time economic conditions start improving, the share market could already have gone through a recovery. We’ll just have to see how large the recovery is, considering interest rates are likely to stay higher than they have been over the last few years.

We’ve already seen a number of ASX shares rebound to get close to 52-week highs such as Webjet Limited (ASX: WEB), Lovisa Holdings Ltd (ASX: LOV), and TechnologyOne Ltd (ASX: TNE).

Which ideas could still be good value?

I regularly write articles about ASX shares that could make good investments. The Motley Fool website is a great place to find ideas.

In my opinion, heavily-hit names like Xero Limited (ASX: XRO), Pinnacle Investment Management Group Ltd (ASX: PNI), and Temple & Webster Group Ltd (ASX: TPW) are still long-term opportunities.

I also like the long-term tailwinds for companies such as Adore Beauty Group Ltd (ASX: ABY) and Estia Health Ltd (ASX: EHE).

This could also be a great time to consider an investment like a leading exchange-traded fund (ETF) such as Betashares Nasdaq 100 ETF (ASX: NDQ) that has fallen heavily.

The post Waiting for ASX shares to bottom? Why you could miss out on a stock market rally appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Monday
• Analysts say these ASX growth shares can generate huge returns for investors
• US inflation is cooling: I’d buy these 3 ASX shares right now
• Still shopping, share price not dropping: Lovisa shines among 3 best ASX 200 retail shares of 2022
• Falling inflation! Could the party be back on for ASX 200 retail shares?

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 BetaShares Nasdaq 100 ETF, Lovisa, Pinnacle Investment Management Group, Temple & Webster Group, and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Adore Beauty Group. The Motley Fool Australia has positions in and has recommended BetaShares Nasdaq 100 ETF, Pinnacle Investment Management Group, and Xero. The Motley Fool Australia has recommended Adore Beauty Group, Lovisa, Technology One, and Temple & Webster Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The S&P/ASX 300 Index (ASX: XKO) is full of names that pay dividends. But not many may pay a dividend yield of more than 10% in the next few years. Adairs Ltd (ASX: ADH) shares could be one of the rare few to do it.

A dividend yield is a combination of much of the profit a business pays out (the dividend payout ratio) and how expensive, or cheap, the share price is. The valuation can be measured in a number of different ways, including the price/earnings (P/E) ratio.

The lower the P/E ratio, the higher this pushes up the dividend yield. But dividends are not guaranteed payments at all.

Large dividend yield projected

After the heavy fall of the Adairs share price, it could pay a very high dividend yield if current dividend forecasts are any indication.

According to projections on Commsec, the business is projected to pay an annual dividend of 20.8 cents per share in FY24. That translates into a forward grossed-up dividend yield of close to 11%.

The ASX 300 share is then predicted to grow its dividend by more than 10% in FY25 to 23.2 cents per share. If that happens, it’d be a grossed-up dividend yield of almost 12%.

How can Adairs shares fund these large dividends?

Profit growth is predicted for FY24 and FY25.

In the 2024 financial year, Adairs could generate earnings per share (EPS) of 30.5 cents and then achieve 32.9 cents per share in the 2025 financial year.

The ASX 300 share already sells large amounts of furniture and homewares in Australia and New Zealand. But it’s aiming for more than $1 billion in sales, after achieving $564.6 million in FY22.

With its three brands of Adairs, Mocka, and Focus on Furniture, it thinks it can achieve that goal in five years.

With its Adairs brand, new and upsized stores could achieve 5% growth per annum of retail floor space. It’s also aiming to grow its (paid) membership by 5% to 10% per annum. The company also wants to improve its omnichannel offering for customers and expand its product range.

Mocka, its online furniture business, wants to expand significantly in Australia. The goal is to increase brand awareness in Australia, expand its range, and add a physical presence in stores. This could be a great way to build synergies between Mocka and the ASX 300 share’s furniture stores.

Adairs recently acquired Focus on Furniture. It wants to build the business by rolling out at least 30 more stores nationally. It’s also aiming to improve the shopper experience in-store and online, increase brand awareness, and expand its product range.

Cheap Adairs share price valuation

I think the ASX 300 share is very attractively priced. According to Commsec estimates, it’s valued at nine times FY24’s estimated earnings. This seems cheap to me for a business expecting growth in the coming years.

The post Guess which ASX 300 share is forecast to pay a dividend yield of 11% in FY24 appeared first on The Motley Fool Australia.

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More reading

• 3 ASX 200 shares I own for big dividends in 2023
• Buy these cheap ASX dividend shares: Goldman Sachs
• Here’s how I’ll be investing my money in ASX shares in 2023
• 23 ASX shares to buy in 2023 – brokers
• How I’d invest $10,000 in ASX shares if I was starting from scratch in 2023

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

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There were numerous businesses that suffered during the 2022 share market decline amid high inflation and rising interest rates. However, I think that there are some ASX exchange-traded funds (ETFs) that could rebound.

Some parts of the market fell harder than others. While tech shares suffered significantly, businesses that ranked well on ‘quality’ metrics also dropped significantly.

But, with inflation in the US starting to drop, some of those quality businesses could start producing. As reported, the US consumer price index dropped by 0.1% in December.

I think these two leading ASX ETFs could be great buys if inflation keeps cooling:

VanEck MSCI International Quality ETF (ASX: QUAL)

This ETF dropped 17% during 2022, compared to a 7% drop for the S&P/ASX 200 Index (ASX: XJO).

That’s quite a drop for a portfolio of businesses that are only included if they do well on key fundamentals including a high return on equity (ROE), earnings stability, and low financial leverage.

It’s invested in a portfolio of around 300 companies that are diversified across geography, sectors, and economies.

While past performance is not a guarantee of future performance, the ETF has outperformed the global share market (MSCI World ex Australia Index) by an average of close to 3% per annum over the prior five years.

Some of the biggest positions include Microsoft, Alphabet, Apple, Home Depot, Johnson & Johnson, and Visa.

VanEck Morningstar Wide Moat ETF (ASX: MOAT)

This ASX ETF dropped around 7% in 2022 — its decline was similar to the ASX 200.

However, this ETF’s portfolio construction is a bit different compared to the first investment I mentioned.

The idea is that the Morningstar analyst team looks at hundreds of US businesses judged to have ‘wide economic moats’. This refers to the competitive advantages that a business has.

Competitive advantages can come in a number of different forms such as brand power, patents, cost advantages, and so on. The analyst team only considers a business for this portfolio if they believe that the competitive advantage will almost certainly endure for the next decade and, more likely than not, for the subsequent decade as well.

Businesses are only chosen for the portfolio if they are seen as trading at “attractive prices relative to Morningstar’s estimate of fair value”.

Past performance is not a guarantee of future returns but over the past five years, the ASX ETF has returned an average of 13.5% per annum.

I really like this ETF and believe it could be one of the most consistent-performing ETFs over the next few years because of its investment methodology.

The post I think these two ASX ETFs are great buys as inflation cools appeared first on The Motley Fool Australia.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. 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 Alphabet, Apple, Home Depot, Microsoft, and Visa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Johnson & Johnson and has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Alphabet, Apple, and VanEck Morningstar Wide Moat ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Over several decades, Warren Buffett’s Berkshire Hathaway has beaten the market with some incredible gains.

The good news is that so much is known about Buffett’s investment style that it is easy for investors to replicate his strategies with ASX shares.

And while this doesn’t mean you’re guaranteed to generate the same level of returns as the Oracle of Omaha, it certainly puts you in a position to grow your wealth over the long term.

With that in mind, here are a couple of ways you can invest like Warren Buffett with ASX shares:

Long term focus

Buffett is well-known for taking a long-term perspective when making investments. Rather than make short-term trades, he buys shares “on the assumption that they could close the market the next day and not reopen it for five years”.

This allows investors to benefit from compounding. This is something that Buffett benefits from today, with an estimated 90% of his wealth being generated after his 65th birthday.

Stressing the importance of compounding, Buffett’s partner in crime at Berkshire Hathaway, Charlie Munger, once commented:

The first rule of compounding: Never interrupt it unnecessarily.

Buy wonderful ASX shares at a fair price

Rather than chasing after the latest hot stock, Buffett looks for wonderful companies that are trading at fair prices. Wonderful companies are those that have strong competitive advantages and are run by competent management. He famously quipped:

It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.

In respect to competitive advantages or moats, Buffett spoke about how important it is for a company to have one in his 2007 letter to shareholders. He explained:

A truly great business must have an enduring “moat” that protects excellent returns on invested capital. The dynamics of capitalism guarantee that competitors will repeatedly assault any business “castle” that is earning high returns. Therefore a formidable barrier such as a company’s being the lowcost producer (GEICO, Costco) or possessing a powerful world-wide brand (Coca-Cola, Gillette, American Express) is essential for sustained success. Business history is filled with “Roman Candles”, companies whose moats proved illusory and were soon crossed.

Overall, if you follow Buffett’s strategy, I believe you have a good chance of generating solid returns over the long term with ASX shares.

The post I would follow Warren Buffett’s advice when buying ASX shares in 2023 appeared first on The Motley Fool Australia.

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• What do IAG shares have in common with Warren Buffett?
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Berkshire Hathaway. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2023 $200 calls on Berkshire Hathaway, short January 2023 $200 puts on Berkshire Hathaway, and short January 2023 $265 calls on Berkshire Hathaway. The Motley Fool Australia has recommended Berkshire Hathaway. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The leading investors from Wilson Asset Management (WAM) have shared two compelling S&P/ASX 300 Index (ASX: XKO) shares on their radar.

WAM operates several listed investment companies (LICs). Some, like WAM Leaders Ltd (ASX: WLE), focus on larger companies.

Meanwhile, WAM Capital Limited (ASX: WAM) targets “the most compelling undervalued growth opportunities in the Australian market”.

But does WAM have a claim of stock-picking pedigree? The WAM Capital portfolio has delivered an investment return of 14.8% per annum since its inception in August 1999. That’s before fees, expenses, and taxes. This gross return outperformed the All Ordinaries Total Accumulation Index (ASX: XAOA) return of 8.2% per annum over the same timeframe.

With that in mind, here are the two ASX 300 shares WAM Capital has outlined in its recent monthly update.

Maas Group Holdings Ltd (ASX: MGH)

WAM describes Maas as a leading independent Australian construction materials, equipment, and services provider focused on the civil, infrastructure, and mining end markets.

The fund manager pointed out that last month, the company announced an on-market share buyback of up to 10% of Maas Group Holdings’ shares on issues within the next 12 months. Management is trying to increase shareholders’ return on equity (ROE).

WAM pointed out that last month the company announced its acquisition of Victorian integrated construction materials business Dandy Premix was completed for $85 million.

This acquisition will “establish a significant presence in the construction materials market in Victoria, which has a good growth outlook underpinned by continuing strong construction and infrastructure spend”.

The fund manager concluded its thoughts on the ASX 300 share:

We remain positive on the future outlook of Maas Group Holdings and look forward to the progress in its acquisition of the commercial development site in Newcastle, New South Wales.

Johns Lyng Group Ltd (ASX: JLG)

This ASX 300 business is an integrated building services group delivering building and restoration services across Australia and the US.

Last month, WAM noted Johns Lyng gave a business update, announcing its executive director and group chief operating officer Lindsay Barber sold four million shares, representing around 31% of his shareholding of the business.

WAM noted the Johns Lyng share price fell after that announcement but the fund manager remains “confident in Mr Barber’s commitment to his role as well as in the company’s ability to maintain its earnings guidance for FY23″.

Johns Lyng said that it expects FY23’s sales revenue to grow by 15.2% to $1.03 billion. Earnings before interest, tax, depreciation and amortisation (EBITDA) is expected to grow by 26% to $105.3 million in FY22.

The post 2 of the most compelling ASX 300 shares to buy this month: fund manager appeared first on The Motley Fool Australia.

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More reading

• 5 profitable ASX shares you probably have never heard of
• Leading brokers name 3 ASX shares to buy today
• Guess which ASX 200 director just sold off $27 million worth of their company’s shares
• Why AGL, Invictus Energy, Maas, and Mach7 shares are pushing higher today
• Why BWX, City Chic, Domain, and John Lyng shares are sinking today

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

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