Category: Stock Market

Her Majesty, Queen Elizabeth II, seemed to define and typify an age so completely, that, despite her age and the length of her reign, her death has still come as something of a shock.

A war-time Princess who stayed at her father’s side, a Queen whose first British Prime Minister – the first of fifteen – was Winston Churchill, and the face and name of the Commonwealth for my entire lifetime and all but a few years of my parents’ lifetimes, too.

She was a calm, gracious, constant and steadying force. 

The Monarchy is, of course, an institution, rather than a person, yet Queen Elizabeth’s time on the throne was so long, and during such momentous societal change, that it’s truly hard to separate one from the other.

And she was universally loved and respected – by Britons, Australians and even by those outside the British Commonwealth. She was, at once, a wise and thoughtful stateswoman and yet we felt a personal connection of sorts; at least as much as is possible with someone you don’t know, and whose life and ours is about as different as can be imagined.

Which, perhaps, was her secret – she was able to personify charm and warmth, even while being distant and apart.

Mostly, she will be remembered for a life of service. 

It may, perhaps, be best summarised in this line from Her Majesty’s first televised address, on 1957:

“I cannot lead you into battle. I do not give you laws or administer justice. But I can do something else. I can give you my heart and my devotion to these old islands and to all the peoples of our brotherhood of nations.”

And she did.

It was a die cast in 1947, in a famous radio speech:

“I declare before you all that my whole life, whether it be long or short, shall be devoted to your service and the service of our great imperial family to which we all belong.”

And it was.

Queen Elizabeth’s passing is remarkable, for many reasons. For the closeness many felt to her. For her reign’s – and her life’s – longevity. For the constancy her presence afforded to our lives, and to our public institutions.

It is a loss that will be felt, deeply, in many different ways, today and in the weeks and months ahead.

The little girl born Elizabeth Alexandra Mary Windsor couldn’t have known the course her life would take,

But it was a life well lived.

Thank you, Your Majesty.

Vale, Queen Elizabeth II.

The post Vale Queen Elizabeth II appeared first on The Motley Fool Australia.

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• ASX better buy: Temple & Webster or Kogan shares?
• Why has the A2 Milk share price leapt 17% in a fortnight?
• 2 ASX growth shares that analysts say have 40%+ upside
• Here’s what analysts are saying about the Betmakers share price
• Down 8% in a month, could Rio Tinto shares be worth digging into?

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Some of the ASX’s biggest stars in 2020 were e-commerce businesses, which experienced unprecedented demand as COVID pulled forward online penetration rates.

This saw Temple & Webster Group Ltd (ASX: TPW) and Kogan.com Ltd (ASX: KGN) shares soar to lofty heights, only to slink back down as ASX online retailers lost their shine.

Let’s take a look at which of these two popular ASX e-commerce shares could be a better buy.

Compare the pair

Before I present a bull case for each company, here’s a quick summary of how these two ASX e-commerce shares stack up across some headline metrics.

As you can see, even though Kogan generates substantially more revenue, Temple & Webster’s superior gross margins mean that more dollars filter through to gross profit.

	Kogan	Temple & Webster
Market capitalisation	$380 million	$670 million
FY22 revenue	$719 million	$426 million
FY22 revenue growth	-8%	31%
FY22 gross profit	$184 million	$193 million
FY22 gross margin	26%	45%
FY22 adjusted EBITDA	$19 million	$16 million
FY22 net profit after tax	-$35 million	$12 million

The case to add Kogan shares to your cart

The simplest bull case for Kogan is that shares have been oversold. The Kogan share price has been slashed by 59% this year. It’s currently sitting at $3.55, a painful 86% lower than the all-time high of $25.10 it reached in October 2020.

In hindsight, it’s easy to see the market lapped up the COVID hype and got well and truly carried away.

But Kogan shares have fallen so far from grace that they’re now down more than 50% compared to pre-COVID levels.

This is despite the retailer bringing in $280 million more revenue and having 2.4 million more customers compared to FY19. But crucially, what hasn’t grown is the company’s bottom line.

Nonetheless, Kogan’s growth story has long been underpinned by taking a bigger slice of the pie out of a fast-growing market.

The e-commerce tailwind will likely propel the industry for years to come, all the while Kogan’s market share has plenty of room left to run.

NAB estimates that in the 12 months to June 2022, Aussies spent $55.72 billion on online retail, representing 14.5% of total retail sales.

Meanwhile, Kogan’s market share sat at just 2.7% in FY21, up from 2.4% in 2020 and 2.1% in FY19.

Temporary blip

Management took a bet that COVID-accelerated demand would be the new normal. Kogan has since candidly admitted it got it wrong, which led to widely reported inventory woes. 

Bulls will argue this was merely a blip and that the long-term growth story remains firmly intact. If not stronger than ever, supported by a growing, loyal customer base and various growth levers at the company’s disposal.

Importantly, the ASX retailer has proven its business model can be profitable and it’s shown potential for operating leverage to kick in.

The company has set an ambitious target of achieving $3 billion of gross sales in FY26, which translates to an annual growth rate of 26%. 

It’s also aiming for one million Kogan First subscribers, which would bolster customer loyalty and repeat purchases while providing a meaningful recurring revenue stream.

If the founder-led management team can deliver on these medium-term goals, without eating into margins, the business could be worth multiples of what it is today.

The case to furnish your portfolio with Temple & Webster shares

Similarly to Kogan, Temple & Webster is benefitting from the shift to online. But the tailwinds blowing at Temple & Webster’s back are arguably stiffer. 

COVID accelerated a lot of growth and saw people shopping for furniture online for the first time. Anecdotally, it’s easy to see Temple & Webster’s rise in prominence as family and friends turn to the company as a destination site for ease and convenience.

But the industry is still in the early stages of online penetration.

The Australian furniture and homewares market lags the online penetration seen in other western countries. In 2021, online penetration was in the range of 15-17% in Australia. But in the UK and US, penetration rates were above 25%.

As we play catch up and more of the market moves online, Temple & Webster, as the largest online player in Australia, is in a prime position to pounce.

In FY22, its market share of the total furniture and homewares market in Australia sat at just 2.3%. That leaves a long runway for growth, especially as the company aims to increase its brand awareness from 61% to 80%.

What else is there to like?

Operationally, Temple & Webster also has a myriad of factors working in its favour.

Importantly, it’s won over consumers, boasting swarms of positive reviews on websites like Trustpilot with ratings higher than its competitors.

The company is known for its expansive range, offering more than 240,000 products from 500 suppliers across 210 categories.

This is made possible by a diverse and reliable supply chain and distribution network. 

Unlike Kogan, Temple & Webster utilises a drop-shipping model for third-party products so it’s largely shielded from inventory risk.

This means that instead of buying all of the products upfront, paying money to store them in warehouses, and dispatching them when a customer makes an order, this is all handled by third parties. Plus, it means that Temple & Webster doesn’t carry the risk of products not being sold.

In FY22, 73% of the company’s sales went through the drop-shipping network. The remaining 27% were higher-margin private label products, where Temple & Webster takes on the inventory risk and fulfils distribution duties.

Operating in the furniture space also comes with advantages over other retail categories. Furniture is a higher margin category compared to, say, consumer electronics and appliances. 

And most of the category is sold under the retailer’s brand rather than the supplier’s. This allows for more catalogue differentiation and means there’s more opportunity for higher-margin initiatives, such as private label products. 

Looking ahead, the company has been ploughing money back into the business to invest in its digital capabilities and expand into new verticals, such as home improvement and trade and commercial.

Prudently, the company recently heightened its focus on profitability, upgrading its FY23 EBITDA margins to 3-5%.

Better ASX e-commerce buy

Both Kogan and Temple & Webster are benefitting from the structural shift to e-commerce.

But for me, it’s hard to go past the number one player in a more targeted industry growing at a faster clip. And that player is Temple & Webster.

The current environment will likely continue to be volatile as we battle soaring inflation, rising interest rates, and a precarious housing market.

But taking a long-term view, I’m confident that a sizeable portion of the furniture and homewares market will be online. 

And I believe Temple & Webster is in a strong position to capitalise on its first-mover advantage and gobble up more share of what is already a very big addressable market.

The post ASX better buy: Temple & Webster or Kogan shares? appeared first on The Motley Fool Australia.

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More reading

• About to go shopping? Kogan share price slides 5% amid acquisition rumours
• Why is the Kogan share price smashing the ASX 200 on Friday?
• How I’d invest $20,000 in ASX shares today if I had to start from scratch
• Why Credit Corp, Endeavour, Kogan, and Service Stream shares are dropping
• Wall Street Slumps | Pilbara Minerals stunning profits | Kogan shares look cheap, Altium shares less so…

Motley Fool contributor Cathryn Goh 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 Kogan.com ltd and Temple & Webster Group Ltd. The Motley Fool Australia has positions in and has recommended Kogan.com ltd. The Motley Fool Australia has recommended Temple & Webster Group Ltd. 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 A2 Milk Company Ltd (ASX: A2M) share price is having a nice run of late, up almost 17% over the past fortnight.

Shares of the baby formula company closed Thursday’s session at $5.58 each after fetching $4.79 a share two weeks ago.

A2 Milk is also far outperforming the S&P/ASX 200 Consumer Staples Index (ASX: XSJ). It’s down 0.63% over the same timeframe.

Certainly, the company has posted some significant announcements recently. Let’s have a closer look.

Buying back shares

In its better-than-expected FY22 results, A2 Milk announced it would initiate a $135 million on-market share buyback program.

Share buybacks can sometimes be seen as a signal the company believes its shares are undervalued.

No doubt helping the decision was the significant amount of cash on the company’s balance sheet — $816.5 million.

Positive FY22 results

A2 Milk was upbeat about its FY22 earnings, with the company noting that its top and bottom lines increased significantly.

Net profit after tax (NPAT) surged 42.3% to $103 million, while revenue climbed 19.8% to $1.29 billion.

The company also gave delivered positive outlook for FY23, saying it expects increased demand for its products in China.

Bullish price target from broker

Bell Potter analysts published a note, upgrading A2Milk to a buy rating with a price target of $6.35. That’s an appreciable 13.8% upside on the current share price.

Bell Potter is bullish on the company after it beat its analysts’ forecasts for FY22.

The broker said:

We upgrade our rating from Hold to Buy. If A2M can execute on its strategy to achieve ~NZ$2Bn in FY26e revenues and EBITDA margins in the teens, then it would imply compound double digit EPS growth through to FY26e. Exiting the US, transitioning MVM towards nutritionals or execution of buybacks could accelerate this growth trajectory. Recent easing in dairy (notably SMP) and vegetable oil ingredient forward rates also imply the scope for favourable COGS movements in FY24e.

A2 Milk share price snapshot

A2 Milk’s share price is up 2.2% year to date. It’s fared better than the S&P/ASX 200 Index (ASX: XJO) which has lost 8% over the same period.

The company’s market capitalisation is currently around $4.15 billion.

The post Why has the A2 Milk share price leapt 17% in a fortnight? appeared first on The Motley Fool Australia.

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More reading

• Why is A2 Milk buying back shares?
• Here are the top 10 ASX 200 shares today
• Why did the A2 Milk share price smash the market with a 22% gain in August?
• How do A2 Milk shares stack up against Bubs post-earnings season?
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Matthew Farley 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 A2 Milk. 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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Looking for growth shares to buy? Well, I have good news for you. Listed below are two ASX growth shares that are rated as buys by analysts with major upside potential.

Here’s what you need to know about them:

Life360 Inc (ASX: 360)

The first ASX growth share that has been tipped as a buy is Life360.

It operates in the digital consumer subscription services market, with a focus on products and services for digitally native families. The company’s key product is the incredibly popular Life360 app, which has 40 million+ active users. It offers families features such as communications, driver safety, and location sharing.

Unfortunately, due to operating at a loss, the market has ignored its stellar growth and sold off its shares during the last 12 months. However, the good news is that the team at Bell Potter believe that its cash balance is sufficient to see it through to breakeven.

In light of this, the broker sees the weakness as a buying opportunity for long term and patient investors. Its analysts have a buy rating and $8.25 price target on its shares, which implies potential upside of 45% based on the current Life360 share price.

NextDC Ltd (ASX: NXT)

Another ASX growth share that has been named as a buy is data centre operator NextDC.

As with Life360, NextDC continued its strong growth in FY 2022. This was driven by increasing demand for space in its data centres thanks to the ongoing structural shift to the cloud.

Goldman Sachs believes the company is well-placed to continue this growth for some time to come.  It has previously highlighted NextDC’s “compelling growth profile”, a proven and profitable business model, and digital infrastructure characteristics.

Goldman currently has a buy rating and $14.20 price target on its shares. Based on the current NextDC share price of $9.75, this suggests potential upside of 45%.

The post 2 ASX growth shares that analysts say have 40%+ upside appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Life360, Inc. and NEXTDC Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Life360, Inc. 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 Betmakers Technology Group Ltd (ASX: BET) share price climbed with the market on Thursday.

The betting technology company’s shares rose 1.2% to 42.5 cents.

Though, this makes little difference to its year to date performance. The Betmakers share price is still down almost 50% during this time.

As one of the most shorted shares on the Australian share market, short sellers will certainly be pleased with this.

Is the Betmakers share price a buy?

A couple of analysts have been weighing on the Betmakers share price. The good news for shareholders is that they are positive on the company and believe investors should be buying its shares despite the high level of short interest.

Ben Clark from TMS Capital told Livewire that he is feeling positive on the company due to a strong update from one of its peers and its huge opportunity in the United States. He said:

I think this might be a buy. We’ve just seen a really bullish update from Flutter in the UK, which is the world’s largest sports betting company. What prompted that was that the US sports betting market, which we know has been legalising and opening up, looks like it’s now hit a tipping point. It’s got at least a decade’s growth to go. There was a bit of a scramble amongst the players before we saw these reactions in the market, and I wouldn’t be surprised to see that coming through again. Betmakers are profitable. It doesn’t trade on a crazy PE for a fast-growing small-cap tech stock. So I’d go buy.

This sentiment was echoed by Henry Jennings from Marcus Today, who highlights the company’s attractive position as a platform provider. He commented:

I think this one’s a buy. I think it has got a good pedigree, as Ben says, in terms of the management, Matthew Tripp. Also, Tom Waterhouse is involved as well, so that’s pretty good pedigree there. As Ben says, the US has reached a tipping point on sports betting, and there’s been a lot of money spent on land grabs and everyone trying to get their share of the market. The good thing about Betmakers is it’s kind of agnostic. It’s the platform, the picks-and-shovels, which has worked for many people in the past.

The post Here’s what analysts are saying about the Betmakers share price appeared first on The Motley Fool Australia.

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• Betmakers share price slips despite new $20 million deal

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 Betmakers Technology Group Ltd. The Motley Fool Australia has recommended Betmakers Technology Group Ltd. 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 Rio Tinto Limited (ASX: RIO) share price hasn’t had a good month, down 7.6%.

Shares of the mining giant closed Thursday at $91.86 each, a gain of 2.74% on the day.

S&P/ASX 200 Metals and Mining Index (ASX: XMJ) also closed 2.75% higher, reclaiming some of its recent losses. It’s now down less than 2% over a month.

Some of Rio’s industry peers are also faring worse than the broader index. The BHP Group Ltd (ASX: BHP) share price is down 4.9% over the past month while shares in Fortescue Metals Group Ltd (ASX: FMG) are down 11.45% over the same period.

But one broker believes Rio Tinto could shoot to new heights and there have been some positive developments for the company in the background. Let’s have a look.

The possible upside for Rio Tinto shares

Last Friday, Goldman Sachs held its buy rating with a price target for Rio shares of $121.50. This means a 33% potential upside at the time of writing.

Goldman’s thesis hinges on Rio’s acquisition of Canadian miner Turquoise Hill, the co-owner of the Oyu Tolgoi copper and gold mine in Mongolia. Rio entered into a definitive arrangement agreement to acquire Turquoise Hill on Tuesday.

Goldman said:

If approved the Transaction is expected to close shortly thereafter and will give RIO a 66% interest in Oyu Tolgoi [OT] (vs. the current 34% effective ownership) with the remaining 34% owned by Mongolia, simplifying the ownership structure, and allowing RIO to work directly with the Government of Mongolia to progress the project, while also strengthening RIO’s copper portfolio.

OT is one of RIO’s most important growth assets as, at its current ownership, we estimate the project will double RIO’s earnings from copper to over 25%, will be long life (+40yrs), low cost (1st quartile), has +50% expansion potential, and in our view is under explored.

Rio Tinto offered $C43 per share to purchase the remaining shares of Turquoise Hill last Thursday. The Turquoise board is now encouraging minority shareholders to vote with it to accept Rio’s final offer.

Bullish signs from Chinese commodity imports

On a broader level, recently published Chinese commodity data from Australia and Zealand Banking Group Ltd (ASX: ANZ) shows that China is importing significantly higher amounts of copper and copper ore on a year-over-year basis.

Copper imports increased 26.4% over the period, while copper ore was up 20.4%. The rise in copper imports was said to be led by demand from the energy sector and amid lower prices for the metal.

Meanwhile, iron ore imports contracted 1.32% amid ongoing COVID-19 lockdowns in China.

Rio Tinto share price snapshot

The Rio Tinto share price is down 8.24% year to date. For context, the S&P/ASX 200 Index (ASX: XJO) has also lost around 8% over the same period.

Rio’s market capitalisation is approximately $34 billion.

The post Down 8% in a month, could Rio Tinto shares be worth digging into? appeared first on The Motley Fool Australia.

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Motley Fool contributor Matthew Farley 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 and Life360, Inc. 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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Shares in Westpac Banking Corporation (ASX: WBC) finished up in the green today, up 1.63% despite no price-sensitive news.

Noteworthy, however, was that the Reserve Bank (RBA) hinted it may reduce the size of its future interest rate hikes in an effort to combat inflation.

The Vaneck Australian Banks ETF (ASX: MVB), an index fund tracking the sector, also finished 2% higher on the day.

Inflation ‘surprise’ now understood

In his speech to the Anika Foundation today, RBA Governor Dr Phillip Lowe said the recent lift in inflation had “come as a surprise”.

“A year ago, the RBA was forecasting that inflation over 2022 would be just 1.75%. Now, we are expecting CPI inflation this year to be around 7.75%,” he said.

“This is a very big change and a very large forecast miss.”

Lowe added that the magnitude of the miss-step had led to some “soul searching” from forecasters at the RBA.

Despite the downbeat tone to start the speech, the RBA Governor also said that measurements suggested there was confidence that inflation would return to targets of 2–3% per year. He added:

The Board is committed to doing what is necessary to ensure that inflation returns to target over time. High inflation is a scourge. It damages our standard of living, creates additional uncertainty for households and businesses, erodes the value of people’s savings and adds to inequality.

And without price stability, it is not possible to achieve a sustained period of low unemployment. It is important, therefore, that this current surge in inflation is only temporary and that we once again return to the 2 to 3% range.

The Board is committed to the return of inflation to target.

As he went on, he predicted further interest rate rises, but that, all things being equal, “the case for a slower pace of increase in interest rates becomes stronger” with each subsequent hike.

As to how far the hikes will go, we will have to wait on the economic data.

Nevertheless, the potential weaker outlook on inflation and rising rates was deemed to be a positive for ASX bank shares such as Westpac today.

This could serve as important information in following the sector when looking ahead.

Westpac shares are down 18% in the past 12 months.

The post Westpac shares stepped into the green today amid RBA’s softer tone appeared first on The Motley Fool Australia.

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More reading

• Why is the NAB share price diving more than the other big 4 ASX banks today?
• Why rising rates are a ‘sugar hit’ for ASX 200 bank shares: Macquarie
• When will the RBA stop raising rates? Here’s what Westpac thinks
• 5 things to watch on the ASX 200 on Tuesday
• Why ASX bank shares are more likely to slowly grind lower than crash, despite famed Wall Street bear saying it’s time to short them

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 recommended Westpac Banking Corporation. 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 Life360 Inc (ASX: 360) share price was among the best performers on the ASX 200 index on Thursday.

The location technology company’s shares ended the day 16% higher at $5.69.

Why did the Life360 share price rocket higher?

Investors were bidding the Life360 share price higher today for a couple of reasons.

One was the significant rebound in the tech sector following a strong night on Wall Street NASDAQ index.

This saw the S&P ASX All Technology index have its best day in a while and rise a sizeable 3.2%.

Among the best performers in the sector were beaten down loss-making tech shares like Life360 and Megaport Ltd (ASX: MP1).

What else?

Also giving the Life360 share price a boost was the release of presentation for the Bell Potter Technology Decoded event. That presentation reemphasised the company’s plan to stop be a loss-maker in the near future. It explained:

We expect Life360 to be on a trajectory to consistently positive Adjusted EBITDA and Operating Cash Flow by late CY23, such that we record positive Adjusted EBITDA and operating cashflow for CY24. This trajectory could be further assisted by the positive impact of potential future price changes.

It also worth noting that Life360 expects to end calendar year 2022 with cash of US$65 million after making a loss of US$35 million to US$38 million for the year.

Based on its expectation that its losses will narrow before eventually becoming profitable in 2024, it appears as though the company has the balance sheet strength to see it through to then without requiring a capital raising.

Can its shares keep rising?

According to a recent note out of Bell Potter, its analysts have a buy rating and $8.23 price target on the company’s shares.

Based on the current Life360 share price, this implies potential upside of 45% for investors over the next 12 months.

This could mean that the gains are only just beginning for this tech share.

The post Life360 share price explodes 16% higher amid pathway to profitability appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Megaport share price soars 10% as ASX tech shares trump on Thursday
• Down 49% so far this year, has the Life360 share price been massively oversold?
• Why these 3 ASX shares could be in for a massive boost this month
• 5 things to watch on the ASX 200 on Monday

Motley Fool contributor James Mickleboro has positions in Life360, Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Life360, Inc. and MEGAPORT FPO. The Motley Fool Australia has recommended MEGAPORT FPO. 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 All Ordinaries Index (ASX: XAO) gained 1.81% today, but one ASX mining share lifted a great deal higher.

The Australian Strategic Materials Ltd (ASX: ASM) share price jumped 2.9% to close Thursday’s trading session at $3.19. In earlier trade, it climbed a hefty 7.82% before pulling back.

So, what did this ASX All Ords share report to the market today?

New agreement

Australian Strategic Materials provided an update on its Korean Metals plant. The company’s subsidiary KSM Metals Co Ltd, has signed a binding agreement on the sale of neodymium praseodymium.

The deal sees metal produced at the plant sold to Korean company NS World Co Ltd, which plans to use the neodymium praseodymium to make bonded magnets.

Under the agreement, KSM Metals will sell and deliver up to 10 tonnes of the rare earths metal between September and December.

What did management say?

Commenting on the news, Australian Strategic Materials CEO Rowena Smith said:

Securing the first sale of neodymium praseodymium ingot from our Korean Metals Plant is an
important milestone for ASM. In just over a year, we have taken our Korean Metals Plant from start of construction to commercial production.

This is a remarkable feat of dedication from our team.

Looking ahead, Smith said commissioning and ramp-up at the plant would continue in the second half of this year. She added:

We look forward to securing further sales contracts in the coming months and will update the
market as contracts are finalised.

Smith also presented at the New World Metals Investment series today. In her presentation, she highlighted how the demand for rare earth oxides would soar by 2032.

She highlighted the company’s Dubbo Project in NSW was construction ready with a processing plant on site. The company is exploring zirconium, niobium and hafnium in this project.

Share price snapshot

Despite today’s gains, the Australian Strategic Materials share price is down 74% over the past year and 70% year to date.

In the past month, the company’s share price has fallen 22%.

For perspective, the ASX All Ords Index has fallen 9% in the past year.

Australian Strategic Materials has a market capitalisation of about $456 million based on the current share price.

The post This ASX All Ords mining share is glowing greener today on ‘important milestone’ appeared first on The Motley Fool Australia.

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More reading

• 3 ASX mining shares primed for an ‘exponential’ energy transition: expert

Motley Fool contributor Monica O’Shea 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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When we take a look at the most popular exchange-traded funds (ETFs) on the ASX, there is one clear favourite amongst investors. That is the Vanguard Australian Shares Index ETF (ASX: VAS).

As of 31 July, the Vanguard Australian Shares ETF had just over $11 billion in funds under management. That’s more than double that of the iShares S&P 500 ETF (ASX: IVV), which presently has just over $5 billion in funds under management.

The next closest ASX-based index fund in terms of popularity is the SPDR S&P/ASX 200 Fund (ASX: STW). It currently has roughly $4.5 billion in funds under management.

So what makes the Vanguard Australian Shares ETF so wildly popular that it runs rings around the other ASX ETFs on the market?

Well, it could come down to a few factors.

Why is the Vanguard Australian Shares ETF so popular?

The first is the Vanguard Australian Shares ETF’s unique structure. It remains the only index fund on the ASX boards that covers the S&P/ASX 300 Index (ASX: XKO), rather than the more widely covered S&P/ASX 200 Index (ASX: XJO).

The ASX 300 holds all of the shares that the ASX 200 does. But it also holds an additional 100 or so companies from the smaller end of the market. Perhaps ASX investors enjoy this increased diversification.

This has the byproduct of slightly reducing investors’ exposure to the largest shares on the ASX – your BHP Group Ltd (ASX: BHP)s and the big four banks. As most ASX investors know, banks and miners are the two largest sectors on the ASX. So it’s possible investors appreciate less concentration in these sectors.

There’s also performance to consider.

As of 31 July, the Vanguard Australian Shares ETF has averaged a return of 4.48% per annum over the past three years, and 8.12% per annum over the past five.

In contrast, the SPDR S&P/ASX 200 Fund has returned an average of 4.25% over the past three years, and an average of 7.92% over the past five.

That’s not a huge disparity. But it is probably enough to convince investors that Vanguard’s ASX 300 approach is the right one to take.

Bogle’s legacy

A final factor to consider is the reputation of Vanguard itself. Vanguard is a US-based fund manager. Its late founder Jack Bogle was one of the most respected investors in the world and attracted heavy praise from none other than the legendary Warren Buffett himself.

Bogle set up Vanguard as a not-for-profit entity owned by its investors. As such, it has historically often offered the lowest fees in the ETF industry. Bogle also is widely credited with inventing the index fund itself. As such, for many investors, Vanguard has unbeatable bona fides when it comes to offering ETF products.

So it’s probably a combination of these factors that has led the Vanguard Australian Shares Index ETF to its place at the top of the ASX ETF pile today.

The post Why is the Vanguard ASX 300 ETF (VAS) so popular among investors? appeared first on The Motley Fool Australia.

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More reading

• Is the VAS ETF a good way to get started with investing?
• Could these ASX ETFs soon play a bigger role in Aussie super funds?
• Why are the VAS ETF’s dividends so erratic?
• How does VGS stack up against other ASX index funds?
• 2 ETFs I think would make good additions to most portfolios

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 recommended iShares Trust – iShares Core 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.

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