Category: Stock Market

The Electro Optic Systems Holdings Ltd (ASX: EOS) share price is back in positive territory on Tuesday.

Earlier in the session, the stock fell before buyers stepped in.

At the time of writing, EOS shares are up 1.61% to $8.18, after dropping as low as $7.87 in morning trade.

Today’s volatile move follows a fresh update from the defence technology company. It includes new US defence orders and a revised timeline for its closely watched South Korean Apollo laser contract.

Here’s what investors need to know.

New US orders add revenue support

According to the release, EOS announced that its US defence systems division has secured two new contracts worth a combined US$12 million (about $17 million).

The first is a US$5 million contract to develop and deliver remote weapon systems (RWS) to the US Army.

Manufacturing and development work will take place in Huntsville, Alabama, with EOS saying the program is expected to help guide future production efforts tied to critical US Army programs.

The second is a US$7 million order for Northrop Grumman’s Angostic Gun Truck, a counter-drone application used by the National Guard.

EOS said it has previously supplied RWS into this program and described the latest order as the result of an ongoing collaboration and evolving market demand.

Both contracts are expected to be delivered during 2026, providing near-term revenue visibility from the company’s US growth pipeline.

South Korea timeline shifts after contract manufacturing change

The bigger strategic update came from EOS’ South Korean conditional Apollo high energy laser contract.

The company said discussions with Goldrone during February and March led both parties to agree on a shared action plan that changes the proposed manufacturing setup.

Instead of using EOS’ Singapore facility, the revised structure now centres on building the first unit in South Korea.

As a result, management now expects the conditional US$80 million agreement to convert into an unconditional contract during the second quarter of 2026. That said, the company noted there is still no certainty this will occur.

This revised timeline may help explain today’s mixed share price action, given the market had previously been focused on a March milestone.

Volatility remains high

Today’s intraday swing highlights how reactive EOS shares remain to contract milestones.

The stock recently tested below $8 again, reaching $7.87 this morning before rebounding back above that level. This keeps the recent support zone around $8 in focus after several similar pullbacks over the past few weeks.

Technical indicators continue to point to consolidation. The relative strength index (RSI) remains in the low 40s, while bollinger bands indicate the stock is still trading near the lower half of its recent range.

Foolish bottom line

Today’s update gives EOS fresh US defence revenue and extends the path toward its Korean Apollo laser opportunity.

However, the revised second-quarter timeline for Goldrone means investors are still likely to stay focused on contract conversion milestones.

In the meantime, the $8 level remains the key technical area to watch.

The post EOS shares rebound after a surprise twist in its South Korean laser deal appeared first on The Motley Fool Australia.

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• What is Bell Potter saying about DroneShield and EOS shares this week?
• Why EOS shares are tumbling 11% today as investors weigh a key defence catalyst
• Why are these 2 defence stocks tumbling today?
• Down another 5% today: Is the party finally over for the EOS share price?
• Can EOS shares break a new all-time high again?

Motley Fool contributor Aaron Teboneras 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 Electro Optic Systems. 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 tumbled 0.9% in morning trade on Tuesday. At the time of writing, the shares are changing hands at $49.97 a piece.

Despite today’s decline, BHP shares are up 9.2% for the year to date, and they’re 31% higher than this time last year.

Earlier this month, BHP shares spiked 18% to an all-time high of $59.25 after the mining giant reported an impressive half-year earnings result. 

But the uptick wasn’t sustainable, and the share price sank just as quickly as it jumped. Several announcements and market updates are acting as strong headwinds for the miner’s stock. 

So, if you’re looking to add the mining stock to your portfolio, here are some things you should consider.

3 reasons to buy BHP shares

1. BHP is a premier blue chip

BHP is widely recognised as a premier blue-chip stock with a huge market capitalisation and a strong operational history. The company is a cyclical, rather than a defensive stock. While cyclical stocks are closely tied to the broader economic cycle, they often outperform during periods of economic recovery.

2. Reliable dividend payments 

BHP is a reliable, high-yield dividend stock that often yields around 4% to 6%, fully franked. It has a long history of regular dividend payments dating back to 2006. As a major diversified miner, it maintains dividend payouts even when commodity prices fluctuate thanks to its low-cost operations. 

3. Analysts tip an upside ahead

According to Market Index data, analysts currently have a buy rating on BHP shares. At the time of writing, the share price is tipped to climb another 9.3% to $55.09 a piece over the next 12 months.

3 reasons to sell BHP shares

1. Geopolitical uncertainty

Soaring geopolitical uncertainty, as the US and Israeli war against Iran continues to intensify, has frightened investors and raised concerns about the outlook and expectations for commodities. This directly impacts investor confidence and, therefore, BHP’s share price.

2. Investment return concerns for some projects

There have been reports this month that suggest that BHP’s Queensland coal operations are facing fresh investment challenges. Management told workers that its Queensland mines can no longer compete for investment and that the company was receiving no returns from projects. This type of news raises concerns about BHP’s overall operational efficiency and profitability.

3. Leadership uncertainty

In mid-March, BHP announced that its CEO, Mike Henry, is stepping down after six and a half years in the role. The mining giant reported that Brandon Craig will become its new CEO and Director on the 1st of July. Given that the appointment doesn’t come into effect for three more months, it could drive more share price volatility. 

The post BHP shares: 3 reasons to buy and 3 reasons to sell appeared first on The Motley Fool Australia.

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• 3 reasons to buy BHP shares today
• ASX 200 mining shares rebound after March sell-off creates opportunities

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

ARN Media Ltd (ASX: A1N) shares are under pressure once again after the radio company’s former star Jackie O filed a wrongful termination lawsuit against it, claiming she is owed at least $82.2 million.

This follows a lawsuit lodged last week by her former on-air partner, Kyle Sandilands, who is also arguing his contract was wrongfully terminated.

Major legal headache

The lawsuits could be ruinous for the company, with each aggrieved party employed under a $100 million contract that stretched out to 2034.

The lawsuits spring from an on-air falling out between the pair on The Kyle and Jackie O Show, after which Jackie O – real name Jacqueline Henderson – refused to go back on air with Sandilands.

Ms Henderson, at the time, ARN said, gave notice that she “cannot continue to work with Mr Kyle Sandilands.”

ARN Media said then that it had terminated its agreement with Henderson, while offering her the possibility of another show on the network.

The company said in its statement to the ASX on Tuesday that Ms Henderson had now formally filed a suit against it.

The company added:

In summary, the applicants claim that the termination of Ms Henderson’s contract constituted adverse action. Ms Henderson sent a ‘Complaint Letter’ to Commonwealth Broadcasting Corporation which noted that Ms Henderson “cannot continue to work with Mr Kyle Sandilands” and made psychosocial health and safety and bullying complaints in relation to the conduct of Mr Kyle Sandilands on and prior to 20 February 2026. It is alleged that the Complaint Letter involved the exercise or proposal to exercise workplace rights, and that the contract was terminated because of that exercise or proposed exercise, in alleged contravention of section 340 of the Fair Work Act 2009 (Cth). It is also alleged the termination of her contract amounted to a repudiation of that agreement.

ARN said Ms Henderson was claiming compensation of “at least” $82.25 million, plus a pecuniary penalty.

ARN said it disputes the claims and intends to defend the proceedings.

The company added:

Given the early stage of the matter, ARN is unable to reliably estimate the outcome or any potential financial impact.

Shock jock aggrieved

Sandilands’ claim, filed last week, did not include a dollar figure; however, it did ask for “specific performance of two contracts”, with the quantum likely to be in a similar range to Henderson’s.

ARN said Sandilands is claiming that, “the termination of Mr Sandilands’ contract was invalid on the basis they allege that there was no act of serious misconduct or breach of contract, and that the termination was unconscionable under the Australian Consumer Law”.

Taken together, if successful, the two legal claims would dwarf the size of ARN Media, which was last valued at $90.8 million. The company’s shares were 3.5% lower at 28 cents on Tuesday morning.

The post The Kyle and Jackie O saga continues, with a massive new legal claim filed appeared first on The Motley Fool Australia.

More reading

• Which media company’s shares are on the slide after big legal news?
• ARN Media has torn up Kyle Sandilands’ contract – so how much could it cost them?

Motley Fool contributor Cameron England 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.

The ASX share market is throwing up a lot of potential buying opportunities. I think there are a few Australian stocks that are simply too good to ignore if someone had $8,000 to invest (or a different figure).

It’s not often that some of the most compelling businesses trade at extremely low prices.

We saw great prices during 2022 and 2023 as high inflation caused concerns about economic conditions and rising interest rates. It seems the same thing is happening again, which I believe will be a great opportunity to buy and hold these Australian stocks for the long term.

Pinnacle Investment Management Group Ltd (ASX: PNI)

Pinnacle says it’s an investment business that is growing a diverse family of world-class investment management businesses (affiliates).

Along with holding stakes in these affiliates, Pinnacle provides seed funding, global institutional, retail distribution, and “industrial-grade” middle office and infrastructure services.

By doing this, Pinnacle enables the investment professionals to focus on delivering investment returns for clients.

Pinnacle has a growing portfolio, which includes Aikya, Antipodes, Coolabah Capital, Firetrail, Hyperion, Life Cycle, Metrics, Pacific Asset Management, Resolution Capital, and more.

For a business that has a large chunk of its earnings linked to funds under management (FUM) performance, it’s understandable why the Pinnacle share price has declined during this period. But the fall of more than 20% this year seems like an overreaction.

Pinnacle’s affiliates have a strong collective track record of outperforming their benchmarks over the long term, and they also have a history of attracting net inflows from clients. This has helped drive the underlying net profit (excluding performance fees) of Pinnacle over the long term. I believe FUM growth will return (or continue) after this period.

With the current market pessimism, I think this is a great time to look at the Australian stock while it’s trading at under 20x FY26’s estimated earnings, according to CMC Invest.

Lovisa Holdings Ltd (ASX: LOV)

Another business I think would be a great buy during this market volatility is Lovisa, a retailer of affordable jewellery that has a global store network.

The business has built an impressive market position and continues to grow at an impressive rate.

Its financial growth and store rollout are two of the main reasons to consider this Australian stock, in my view, along with the fact that the Lovisa share price has dropped more than 25% this year, making the valuation much more appealing.

Excluding its new start-up business Jewells, Lovisa reported in HY26 that revenue grew by 22.7%, with comparable store sales growth of 2.2%. Underlying operating profit (EBIT) increased by 20.4%, and net profit increased 21.5% despite the fact that the company is investing significantly in long-term growth.

Its global store count increased by 152 (or 16%) year over year to 1,095. Store growth is happening in numerous countries, including Australia, South Africa, China, Vietnam, the UK, Zambia, Ireland, Spain, France, Germany, the Netherlands, the USA, Canada, and Mexico.

As long as the Australian stock continues to deliver positive comparable store sales growth, I think the store rollout will be a positive for both total revenue and long-term profit margins.

I’m not expecting the new Jewells business to become a major contributor to the company, but it may have a promising future if it can reach a certain scale.

The Lovisa share price is currently valued at 24x FY26’s estimated earnings, according to CMC Markets. This seems like a very promising time to invest, in my view.

The post 2 strong Australian stocks to buy now with $8,000 appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in Pinnacle Investment Management Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Lovisa and Pinnacle Investment Management Group. The Motley Fool Australia has positions in and has recommended Pinnacle Investment Management Group. The Motley Fool Australia has recommended Lovisa. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Metallium Ltd (ASX: MTM) share price is gaining ground again on Tuesday after the company released a major update.

Investors are responding positively, sending the shares 5.36% higher to 59 cents in morning trade.

Even with today’s gain, the stock remains down 47% in 2026. That highlights the big swings investors have seen this year, after the stock has risen around 270% over the past 12 months.

Given the stock was halted on Monday pending this announcement, today’s move is likely to draw even more attention to the update.

Here’s what the market is reacting to.

10-year deal adds another key milestone

According to the ASX announcement, Metallium’s wholly owned US subsidiary, Flash Metals USA, has signed a 10-year initial agreement with Indium Corporation.

The deal covers gallium, germanium, indium, copper, tin, gold, and other critical metals recovered from e-waste and industrial scrap using the company’s Flash Joule Heating technology.

The pricing is tied to market-based formulas, giving investors a clearer view of how recovered metals could contribute to revenue as the Texas plant ramps up.

The agreement also adds a long-term customer as the company continues expanding its US operations.

This follows January’s binding Glencore feedstock supply deal, which secured raw material supply for the Texas site.

Texas growth plans remain in focus

The agreement gives Metallium further exposure to metals that remain in strong demand across semiconductors, defence equipment, AI infrastructure, and advanced electronics.

Gallium and germanium have become increasingly important as Western countries look to reduce reliance on overseas supply chains.

Management also said the deal aligns with broader US efforts to rebuild domestic refining capacity and strengthen critical mineral supply chains.

The Texas expansion remains a key reason behind the stock’s strong 12-month gain.

The company recently said it expects three Flash Joule Heating units to be operating together by June, with processing volumes set to increase through the second half of 2026.

Even so, the Metallium share price has continued to see-saw in recent months as larger-scale production builds.

Foolish Takeaway

The gain suggests investors wanted another clear sign that the company is turning its technology into commercial sales.

A 10-year deal with a well-known US customer marks another solid milestone for the company as it works toward larger operations in Texas.

With the stock still well below its 2026 highs, the move higher shows the market is still reacting strongly to progress on contracts and production growth.

Metallium has a market capitalisation of about $412 million, with 736.8 million shares outstanding.

The post This ASX stock just landed a 10-year US deal and investors are buying in appeared first on The Motley Fool Australia.

More reading

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• This innovative ASX metals company could deliver more than 100% upside: broker

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

It is not always comfortable buying ASX growth shares during periods of market volatility.

In fact, it often feels easiest to buy them when prices are rising and confidence is high. The story sounds better, the outlook feels clearer, and momentum is on your side.

But that is usually not when the best long-term opportunities appear.

After the recent pullback in global markets, I find myself looking at growth shares a little closer. Because this is often when sentiment and fundamentals start to diverge.

When great ASX growth shares are marked down

One thing I have noticed over time is that high-quality ASX growth shares rarely stay cheap for long.

But they do get sold off.

Sometimes it is because of rising interest rates. Sometimes it is macro uncertainty. And sometimes it is simply a shift in market mood.

Businesses like Wisetech Global Ltd (ASX: WTC), TechnologyOne Ltd (ASX: TNE), and Life360 Inc. (ASX: 360) have all seen their share prices pull back despite continuing to execute operationally.

That disconnect is what I find interesting.

Because if the long-term outlook remains intact, a lower share price can quietly improve future return potential.

The trade-off never really disappears

That said, I do not think growth investing suddenly becomes easy just because prices fall.

The trade-off is always there.

You are often paying a premium for companies that are expected to grow strongly into the future. That means expectations matter. Execution matters. And sentiment can shift quickly.

Even after a correction, many growth shares are not cheap in a traditional sense.

But I think that misses the point slightly.

For me, the question is less about whether a stock looks cheap today and more about whether the business can be meaningfully larger and more profitable in five or ten years.

Why I think this environment is interesting

What makes the current environment stand out to me is the combination of uncertainty and structural growth.

On one hand, there are still macro concerns floating around. Interest rates, artificial intelligence (AI) concerns, global growth fears, and market volatility have not disappeared.

On the other hand, many of the long-term drivers behind growth companies remain intact.

Digital transformation is still ongoing. Healthcare innovation continues. Enterprise software adoption is not slowing down.

That tension can create opportunities.

Not obvious ones. Not risk-free ones. But opportunities to build positions in businesses that might otherwise always feel just out of reach.

How I would approach it

If I were looking at ASX growth shares today, I would focus on building positions gradually.

Adding over time helps smooth out volatility and removes the pressure of needing to get the timing exactly right.

I would also stay selective.

Not every company that falls is a good opportunity. For me, it comes back to quality. Strong balance sheets, clear competitive advantages, and a track record of execution.

That is what gives me confidence to hold through the inevitable ups and downs.

Foolish takeaway

Growth investing never really feels easy, and that is probably a good thing.

Right now, I think we are in one of those periods where high-quality ASX growth shares are being viewed with a bit more caution.

For long-term investors, that can be an opportunity because the gap between sentiment and long-term potential may be starting to open up again.

The post Is now the perfect time to buy ASX growth shares? appeared first on The Motley Fool Australia.

More reading

• 3 ASX tech stocks that belong in every long-term portfolio
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• Got $5,000 to invest? Here are 2 ASX tech stocks to buy today
• 2 ASX shares highly recommended to buy: Experts

Motley Fool contributor Grace Alvino 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 Life360, Technology One, and WiseTech Global. The Motley Fool Australia has positions in and has recommended Life360 and WiseTech Global. The Motley Fool Australia has recommended Technology One. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Challenger Ltd (ASX: CGF) share price is in focus today after the company welcomed APRA’s new capital framework for longevity products, due to start from July 2026. Challenger expects the move will lower required capital and reduce risk for lifetime income product providers.

What did Challenger report?

• APRA finalised changes to capital settings for longevity product providers, effective 1 July 2026
• Reforms expected to lower required capital and cyclical risk for Challenger
• Challenger to detail business impacts at Investor Day on 26 May 2026
• Challenger Life remains Australia’s largest provider of annuities

What else do investors need to know?

Challenger has welcomed APRA’s reforms, saying they represent the biggest changes for longevity product providers in a generation. The company believes these changes will help develop Australia’s retirement income market as more Australians enter retirement each year.

Challenger operates both a fiduciary funds management division and an APRA-regulated Life division. The business remains firmly focused on providing customers with financial security in retirement.

What did Challenger management say?

Managing Director and Chief Executive Officer Nick Hamilton said:

We strongly welcome APRA’s reforms, which represent the biggest changes for providers of longevity products in a generation. For Challenger, it will lower the levels of required capital and cyclical risks to our capital position during times of market stress, while maintaining policyholder security.

What’s next for Challenger?

Challenger plans to work through the details of the new capital standards and will provide more information about their impact at its upcoming Investor Day in May 2026. The company continues to advocate for policy changes that support retirees’ financial confidence and improve the sustainability of lifetime income products.

Investors can expect further updates as Challenger refines its approach in light of these regulatory changes, helping position the business for the future.

Challenger share price snapshot

Over the past 12 months, Challenger shares have risen 38%, outperforming the S&P/ASX 200 Index (ASX: XJO) which has risen 8% over the same period.

View Original Announcement

The post Challenger shares in focus as APRA unveils new capital rules appeared first on The Motley Fool Australia.

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Motley Fool contributor Laura Stewart 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 Challenger. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial summary of the company announcement. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.

S&P/ASX 200 Index (ASX: XJO) gold stock West African Resources Ltd (ASX: WAF) is marching higher today.

West African Resources shares closed yesterday trading for $3.05. In late morning trade on Tuesday, shares are swapping hands for $3.09 apiece, up 1.3%.

For some context, the ASX 200 is down 0.2% at this same time, while the S&P/ASX All Ordinaries Gold Index (ASX: XGD) is down 0.3%.

Here’s why West African shares are outperforming today.

(* Note, all figures below in US dollars unless otherwise specified.)

ASX 200 gold stock lifts on record production outlook

West African shares are outperforming today after the unhedged gold miner released its production guidance for calendar year 2026 and its 10-year production outlook.

As for the year ahead, the ASX 200 gold stock forecasts production of 430,000 ounces to 490,000 ounces of gold. The high end of that guidance represents a 63% increase from the 300,000 ounces of gold West African produced in 2025.

The company expects to produce this gold at an all-in sustaining cost (AISC) of $1,900 per ounce.

And with plans to increase its gold resources and extend mine lives, the miner is aiming to drill some 100,000 metres across its Sanbrado and Kiaka assets, both located in Burkina Faso, in 2026.

Amid strong operations, West African Gold said it is also considering share buybacks or declaring a maiden dividend in 2026.

“2026 is set to be a record production year for WAF as we will see a full year of operation from Kiaka for the first time, and another solid year of production from Sanbrado is expected,” West African Gold CEO Richard Hyde said.

What’s ahead for West African Gold shares?

Looking to the decade ahead, the ASX 200 gold stock released an updated Resources, Reserves and 10‐year production outlook.

West African’s Reserves increased to 7 million ounces of gold, while its Mineral Resources increased to 13.7 million ounces of gold.

Over the 10 years from 2026 to 2035, the miner expects to produce 5.3 million ounces of the yellow metal. Annual gold production is forecast to peak at 596,000 ounces in 2030.

And Hyde noted that those production figures could ramp up following ongoing exploration.

He said:

We see potential to improve annual production further through our ongoing drilling programs where we plan to drill more than 100,000 metres annually targeting extensions at M5 South underground, beneath M5 North open-pit and Toega underground.

Despite the March retrace following the onset of the Iran war and resulting decline in global gold prices, shares in the ASX 200 gold stock remain up 32% in 12 months.

The post Guess which ASX 200 gold stock is lifting off today on record breaking news appeared first on The Motley Fool Australia.

More reading

• West African Resources: 2026 production guidance forecasts record gold output
• 2 ASX gold miners to buy for solid share price gains, according to Barrenjoey
• Here are the top 10 ASX 200 shares today
• Why Challenger, Meeka Metals, Vulcan Energy, and West African Resources shares are rising today
• Why is this $3 billion ASX 200 gold stock leaping higher on Tuesday?

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

Passive income gets talked about a lot in investing circles.

The idea is simple. Build a portfolio, collect dividends, and let your money do the work for you.

But I think it is worth asking a more honest question.

Is it actually achievable in a meaningful way, or is it just a nice concept on paper?

Where the income really comes from

When people talk about passive income on the ASX, they are usually talking about dividends.

And to be fair, Australia is a strong market for that.

Companies like Commonwealth Bank of Australia (ASX: CBA), Telstra Group Ltd (ASX: TLS), and Transurban Group (ASX: TCL) have built reputations for returning cash to shareholders over time.

There are also ETFs like the Vanguard Australian Shares High Yield ETF (ASX: VHY), which package that income focus into a single investment.

On the surface, it can look relatively straightforward. Buy income-generating assets and collect the distributions.

But I think the reality is a bit more nuanced.

The capital requirement is often underestimated

One thing that stands out to me is how much capital is usually required to generate meaningful income.

For example, a portfolio yielding around 4% would generate $4,000 per year from a $100,000 investment.

That is not insignificant, but it is also not life-changing for most people.

To generate $40,000 per year at that same dividend yield, you would be looking at a $1 million portfolio.

That is where the challenge becomes clearer.

Passive income from shares is achievable, but it typically sits at the end of a long period of saving and investing, not at the beginning.

Yield is only part of the story

Another thing I think is important is not to focus solely on yield.

High dividend yields can sometimes signal risk rather than opportunity.

If a company is paying out a large portion of its earnings, it may have less flexibility to reinvest in growth or to navigate tougher conditions.

That is why I think a mix is best.

Some income-focused holdings, but also businesses that can grow their earnings over time. Because growing earnings can lead to growing dividends.

And that is where the real compounding effect starts to show up.

Building toward it over time

Personally, I do not think of passive income as something you switch on.

I think of it as something you build toward.

In the earlier stages, the focus might be more on growth. Increasing the size of the portfolio.

Over time, as the portfolio becomes larger, income naturally becomes more meaningful, even without dramatically changing the strategy.

That shift tends to happen gradually, almost without noticing at first.

Foolish Takeaway

Passive income from ASX shares is absolutely achievable.

But I think it is important to frame it realistically.

It usually requires time, consistency, and a meaningful amount of capital. It is less about finding the perfect high-yield stock and more about building a portfolio that can grow and generate income over many years.

The post Is passive income from ASX shares really achievable? appeared first on The Motley Fool Australia.

More reading

• The Kyle and Jackie O saga continues, with a massive new legal claim filed
• 2 strong Australian stocks to buy now with $8,000
• This ASX stock just landed a 10-year US deal and investors are buying in
• Is now the perfect time to buy ASX growth shares?
• Challenger shares in focus as APRA unveils new capital rules

Motley Fool contributor Grace Alvino has positions in Commonwealth Bank Of Australia and Transurban Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Transurban Group. The Motley Fool Australia has positions in and has recommended Telstra Group and Transurban Group. The Motley Fool Australia has recommended Vanguard Australian Shares High Yield ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

KMD Brands Ltd (ASX: KMD) has revealed it made a net loss for the first half and will raise NZ$65.3 million at a steep discount to its current trading price, while its shares will remain in a trading halt for now.

The company, which owns the Rip Curl and Kathmandu brands, placed its shares in a trading halt on Wednesday last week while it sought to finalise the capital raise, which The Australian reported was initially seeking to raise NZ$100 million.

Capital raise details revealed

The company this morning said it would raise NZ$65.3 million at a 69.2% discount to its last trading price on the New Zealand Stock Exchange, where its shares last changed hands for NZ19.5 cents.

KMD said it would raise NZ$6.8 million from institutional shareholders and another NZ$58.5 million from current shareholders in a fully underwritten offer.

The company has asked that its shares remain suspended from trade while it finalises the institutional tranche of the new share offer.

Sales up but books in the red

On the operational front, the company published its first-half results, with group sales up 7.3% to NZ$505.4 million, but the company posted a net loss of NZ$13.1 million.

Kathmandu was the standout performer for the group in terms of revenue increase, with sales up 12.3% and EBITDA improving from a NZ$12.8 million loss to a NZ$2.4 million loss.

Rip Curl sales were up 4.6% while EBITDA fell 13% to NZ$20.5 million.

KMD Brands Chief Executive Brent Scrimshaw said regarding the result:

Since launching our Next Level strategy, we have accelerated the pace and quality of execution and returned each of our brands to growth in a short timeframe. Strong early progress has been made against our key initiatives, giving us further conviction in our potential. We’re particularly encouraged by the improved performance of Kathmandu, which has delivered double-digit same store sales growth for the first time in over two years. It’s also pleasing to see consumers responding positively to our accelerated product freshness, flow and assortment, along with a renewed focus on innovation. While Rip Curl has navigated more volatile global trading conditions, we remain confident that the brand’s repositioning will drive long-term growth and youthful energy, connected to the next generation of core surf and beach consumers.

The company had net debt at the end of January of NZ$94 million.

On the outlook, KMD said Kathmandu had continued its recent sales momentum in the first six weeks of the second half, “with the key Autumn and Winter trading periods still to come”.

The company added:

Rip Curl and Oboz wholesale order books for 2H FY26 are in line with last year, with the Europe and North America summer season to come. Gross margin expansion is anticipated YOY in 2H FY26, reflecting actions taken to offset the US tariffs, and cycling specific clearance of inventory in the second half of last year.

Oboz is the company’s footwear division.

KMD’s Australian-traded shares last traded at 15.5 cents, valuing the company at $110.3 million.

The post KMD Brands shareholders to be stung with a hugely discounted capital raise appeared first on The Motley Fool Australia.

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Motley Fool contributor Cameron England 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.