Category: Stock Market

The Electro Optic Systems Holdings Ltd (ASX: EOS) share price is surging on Tuesday after the company unveiled another contract win.

The update supports the view that the business has moved into a new phase of growth.

At the time of writing, the defence tech’s shares are up 8.26% to $9.44, as investors digest the latest news.

A meaningful US Army contract

According to the release, EOS announced it has secured a US$22 million (around A$33 million) contract to supply Remote Weapon Systems (RWS) for a major US Army ground combat platform. The agreement is with General Dynamics Land Systems, one of the US military’s largest prime contractors.

The work will be delivered over the next two years and includes hardware, development, spares, and training. Manufacturing will take place at EOS’ facility in Alabama, further strengthening its US footprint and deepening relationships with tier-1 defence partners.

While the contract may be small in dollar value, it represents an important step. EOS technology will be deployed on a frontline US Army platform, increasing the likelihood of repeat orders and wider adoption as programs scale up.

Backlog keeps building

Importantly, today’s announcement adds to an already expanding order book. EOS confirmed its unconditional contract backlog now stands at more than $400 million, up sharply from late 2024.

Based on current schedules, most of that backlog is expected to convert into revenue between 2026 and 2027, providing the company with far greater visibility than it has ever had before.

Diversification across products and regions

Another key change in the EOS story is diversification. The company now generates demand across multiple regions, including North America, Europe, Australia, and the Middle East.

Its core Remote Weapon Systems, like the R400 and Slinger, continue to gain traction, while counter-drone capability has moved from future planning to urgent procurement. At the same time, EOS remains one of the few companies globally with a deployable, export-approved high-energy laser weapon system. And that breadth gives EOS multiple pathways to grow, rather than relying on a single program or geography.

EOS share price Foolish Takeaway

Today’s move reflects rising confidence that EOS has moved beyond its earlier development phase.

A growing backlog, proven technology in service, and deeper ties to the US defence ecosystem are reshaping how the market now views the business.

If execution continues and pipeline opportunities convert, the current share price may still be playing catch-up.

In my view, EOS shares sitting below $10 could be a thing of the past in 2026.

The post Why EOS shares are jumping on Tuesday appeared first on The Motley Fool Australia.

More reading

• My 5 top stocks to buy in 2026
• What’s next on the horizon for EOS? Why I think 2026 could be massive
• Why 4DMedical, Develop Global, EOS, and Maas shares are racing higher today
• EOS shares take off on $32m US weapons deal
• Top brokers name 3 ASX shares to buy today

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 are 1.35% higher in Tuesday afternoon trade, at $45.68 a piece. Over the past month, the shares have jumped 12.42% and are now trading 14.3% higher than they were in January. 

The Australian metals and mining giant has received a lot of attention from investors and analysts this month. It also frequently makes the list of most-traded shares among CommSec clients.

What happened to BHP shares in 2025?

There have been a few ups and downs, but BHP shares have gradually climbed higher throughout 2025, recouping losses incurred throughout the previous year. The share price has fluctuated, although not wildly. Over the past 52 weeks, BHP shares have traded anywhere between $33.25 and $45.98.

The miner is closely aligned with global commodity prices, which have generally risen in 2025, particularly for copper.

This week, the copper price has reached its highest levels in nearly five months. This is thanks to tight supply conditions and optimism about strong demand from long-term infrastructure projects. 

“Prices on the LME are on track for their strongest annual gain since 2009, supported by persistent mine disruptions and historically low treatment and refining charges, underscoring stress in the copper concentrate market,” Trading Economics said.

The metal has now gained more than 30% since the start of the year, comfortably outpacing the broader market.

Copper is a central material for the global energy transition and is also used in electric vehicles. It is also a critical component in AI data centres due to its conductivity and efficiency in power distribution and cooling. 

And as the world’s largest copper producer, BHP has strongly benefited from this year’s market shift.

What else drove BHP shares higher?

But the copper price isn’t the only thing to boost BHP shares this year. The mining giant has reported strong production figures throughout the year, although its earnings and profit performance have been mixed.

In early December, the miner announced that it had struck up a new US$2 billion infrastructure agreement with Global Infrastructure Partners (GIP), an investment group owned by BlackRock. 

Under the arrangement, a new trust will be set up. BHP will own and control 51% and GIP will hold the remaining 49%. The project is due for completion by the end of FY26, subject to approvals.

Is BHP a buy, sell, or hold for 2026?

Analysts are mostly neutral on the stock and its outlook next year. TradingView data shows that 11 out of 16 analysts have a hold rating on BHP. The remaining six analysts have a buy or strong buy rating.

The average target price for BHP shares is $45.37, which implies a 0.53% downside from the share price at the time of writing. I think I’d sit tight for now.

The post Are BHP shares a buy, sell or hold for 2026? appeared first on The Motley Fool Australia.

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• Guess how much $10,000 invested in these VanEck ASX ETFs a year ago is worth today?
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• Buying Rio Tinto, Fortescue and BHP shares? Here’s Westpac’s sobering 2026 iron ore price forecast
• 5 top ASX dividend shares I would buy with $5,000
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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 recommended BlackRock. 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.

Commonwealth Bank of Australia (ASX: CBA) shares are $161.23 apiece, up 1.88% on Tuesday.

Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is 1.12% higher.

It’s been a tale of two halves for CBA shares in 2025.

The highlight of the first half was the CBA share price reaching a historical high of $192 in late June.

In the second half came the fall, ending a sensational run that began all the way back in November 2023.

The net result: CBA shares are up 4.89% in the year to date compared to a 7.27% bump for the ASX 200.

Meanwhile, in 2H CY25, the other three major ASX 200 bank shares have risen strongly and reached record highs last month.

The ANZ Group Holdings Ltd (ASX: ANZ) share price went to $38.93 and Westpac Banking Corp (ASX: WBC) shares reached $41.

The National Australia Bank Ltd (ASX: NAB) share price touched $45.25.

Blackwattle Large Cap Quality Fund portfolio managers Joe Koh and Elan Miller say CBA shares remain overvalued.

In their latest update, the fundies said:

While CBA is a very high-quality company, valuation has been extreme both from a price-to-earnings as well as price-to-book perspective.

The Fund still believes that the valuation of CBA remains stretched by both an historical and a relative basis.

The fundies also think CBA is losing some of its competitive edge.

We are also of the view that the core advantages CBA has historically enjoyed is slowly being eroded by increased competition.

Both Macquarie Group Ltd (ASX: MQG) and Westpac have been very aggressive at writing mortgage loans and the deposit base being eroded as savers look for better return on their deposits.

CBA has also seen their cost growth exceed revenue growth.

While the Large Cap Quality Fund owns CBA shares, the managers have implemented their mandate maximum underweight position.

This positioning helped the fund outperform its benchmark index, the S&P/ASX 200 Total Return Index, by 0.17% last month.

Our decision to be at our mandate maximum underweight in CBA allowed us to benefit from the underperformance of the financials and CBA in particular.

The S&P/ASX 200 Financials Index (ASX: XFJ) declined by 7.42% in November.

What’s next for CBA shares?

Commonwealth Bank will release its 1H FY26 results and announce its interim dividend on 11 February.

The ex-dividend date for the interim dividend will be 18 February. The record date will be 19 February.

CBA will pay the dividend to investors on or about 30 March.

The post CBA shares down 16% since peak amid core advantages ‘slowly being eroded’ appeared first on The Motley Fool Australia.

More reading

• Why these ASX ETFs could be better than buying CBA shares
• 5 ASX shares I’m avoiding this week
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• The Commonwealth Bank has called it! Interest rates to rise in the new year, but how soon?
• These shares have bigger dividend yields (and more upside) than CBA shares

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

A Christmas bonus has a funny way of disappearing.

One minute it is sitting in your account, the next it is gone on presents, food, and things you barely remember buying.

If you want to make yours count, you could put it to work straight away in a handful of high-quality ASX exchange traded funds (ETFs).

Rather than trying to pick the perfect stock to buy, you can focus on a large group of businesses that can compound quietly for years.

Here are three top ASX ETFs that could be buys if a Christmas bonus landed in your account.

iShares S&P 500 ETF (ASX: IVV)

If I could only choose one ETF, this would be very hard to look past. The iShares S&P 500 ETF gives exposure to 500 of the largest and most influential stocks in the United States.

Its portfolio spans technology, healthcare, consumer goods, mining, and financials, with holdings including Microsoft (NASDAQ: MSFT), Apple (NASDAQ: AAPL), Nvidia (NASDAQ: NVDA), Walmart (NYSE: WMT), and McDonald’s (NYSE: MCD). What makes this ETF especially appealing is its balance. While the big tech names often grab the headlines, a large part of the fund is made up of steady, cash-generating businesses that have been compounding earnings for decades.

Betashares Australian Quality ETF (ASX: AQLT)

Another ASX ETF that could be worth considering is the Betashares Australian Quality ETF.

It takes a more selective approach by focusing on ASX shares with strong balance sheets, reliable earnings, and attractive returns on equity.

Its holdings include household names such as BHP Group Ltd (ASX: BHP), Wesfarmers Ltd (ASX: WES), Telstra Group Ltd (ASX: TLS), Macquarie Group Ltd (ASX: MQG), and Commonwealth Bank of Australia (ASX: CBA).

A good thing about this ETF is that it leans into quality rather than hype. These are companies that have survived multiple economic cycles and still managed to grow shareholder value.

For a Christmas bonus, this fund offers a sensible way to back Australian shares that are built to last.

It was recently recommended by analysts at Betashares.

Betashares Asia Technology Tigers ETF (ASX: ASIA)

To add some extra growth potential, you could look at exposure to Asia’s technology leaders. The Betashares Asia Technology Tigers ETF provides access to some of the region’s most powerful companies.

This includes Tencent Holdings (SEHK: 700), Taiwan Semiconductor Manufacturing Company (NYSE: TSM), Alibaba Group Holding Ltd (NYSE: BABA), and Samsung Electronics.

With Asia’s middle class continuing to expand, digital adoption accelerating, and the region playing a critical role in global supply chains, especially in semiconductors and e-commerce, this Asian tech sector looks well-placed for long-term growth.

It is no surprise then that it was recently recommended by analysts at Betashares.

The post The ASX ETFs to buy if you got a Christmas bonus appeared first on The Motley Fool Australia.

More reading

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• The ETF portfolio I’d build if I never wanted to watch markets again
• Why these ASX ETFs could be better than buying CBA shares
• Where to invest $250 in ASX ETFs this month
• Guess how much $10,000 invested a year ago in these global ASX ETFs is worth today

Motley Fool contributor James Mickleboro has positions in Betashares Capital – Asia Technology Tigers Etf. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Apple, Macquarie Group, Microsoft, Nvidia, Taiwan Semiconductor Manufacturing, Tencent, Wesfarmers, and iShares S&P 500 ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Alibaba Group and has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has positions in and has recommended Macquarie Group and Telstra Group. The Motley Fool Australia has recommended Apple, BHP Group, Microsoft, Nvidia, Wesfarmers, and iShares S&P 500 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Energy shares remain a popular hunting ground for ASX dividend investors. Two names that often get mentioned are Woodside Energy Group Ltd (ASX: WDS) and Whitehaven Coal Ltd (ASX: WHC).

Both pay dividends, but the quality and consistency are not the same.

Here’s how they compare heading into the end of December.

One stock is paying investors properly

If income is the goal, then Woodside stands out by a long shot.

At current prices, Woodside is offering a dividend yield of around 7%, fully franked. That’s supported by semi-annual payments of roughly 82 cents per share and a dividend policy that returns a meaningful portion of profits to shareholders.

That level of income puts Woodside well ahead of most large ASX stocks, especially at a time when yields are under pressure and investors are being more selective.

Whitehaven sits at the other end of the spectrum. Its dividend yield is closer to 2%, based on recent payouts.

The coal producer has paid fully franked dividends this year, including a 6-cent final dividend and a 9-cent interim dividend. However, the total cash returned to shareholders is modest compared to Woodside.

Two very different energy companies

The gap in dividends largely reflects the different businesses behind them.

Woodside is a global oil and gas producer with long-life LNG assets and exposure to international energy markets. Its earnings move with oil and gas prices, but its dividend policy is designed to smooth that volatilityover time.

The share price has come under pressure recently, including a sell-off following the surprise announcement of CEO Meg O’Neill’s departure. Even so, broker forecasts continue to point to steady cash generation and the ability to maintain dividends into 2026.

Whitehaven’s recent share price performance has been stronger, with the stock up around 25% in 2025 after improved execution and favourable coal pricing.

However, the issue is sustainability. Coal markets are volatile, heavily influenced by global pricing, regulation, and long-term demand trends. That uncertainty shows up in Whitehaven’s dividend history, which has been far less consistent over time.

How solid are these businesses?

Woodside’s cash flows are backed by diversified production and long-term contracts, which give it more flexibility when energy markets move around. Even with management changes, the business continues to generate the cash needed to fund dividends.

Whitehaven is profitable and well-run, but its future payouts remain closely tied to coal prices and policy decisions across key export markets. That makes dividend planning much harder for income investors.

So which dividend stock wins in December?

If your priority is income right now, Woodside Energy looks like the stronger choice.

It offers a higher yield, full franking, and a clearer path to ongoing dividends supported by cash flow.

Whitehaven has delivered strong share price gains at times, but its dividend yield is lower and more exposed to commodity cycles.

For investors building income portfolios, Woodside stands out as the more reliable dividend stock heading into 2026.

The post Better dividend stock in December: Woodside or Whitehaven? appeared first on The Motley Fool Australia.

More reading

• $5,000 to spare? I’d buy these 5 ASX 200 shares before the end of 2025
• 5 things to watch on the ASX 200 on Monday
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• Why Boss Energy, Paragon Care, Treasury Wine, and Woodside shares are falling today
• Woodside shares tumble on shock CEO exit

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.

The Scentre Group Ltd (ASX: SCG) share price is in focus after the company announced Australian Retirement Trust (ART) will acquire a 19.9% stake in Westfield Sydney for $864 million. Scentre will retain an 80.1% interest and remain property, leasing, and development manager.

What did Scentre Group report?

• ART to acquire 19.9% of Westfield Sydney for $864 million
• Transaction price reflects June 2025 book value and a 4.69% capitalisation rate
• Scentre retains 80.1% ownership post-transaction
• Westfield Sydney drew over 33 million customers and generated $1.1 billion in sales during 2024
• Settlement of the transaction is expected in early February 2026

What else do investors need to know?

This deal follows Scentre Group’s recent move to jointly venture 50% of Westfield Chermside in Brisbane with Dexus funds, signalling the group’s strategy to introduce fresh third-party capital. Scentre has now announced approximately $2.2 billion in new capital through joint ventures during 2025.

Including previous sales of Westfield Sydney’s office towers, Scentre Group has now realised about $2.4 billion in total value from the precinct. The company’s remaining 80.1% share of Westfield Sydney is now valued at $3.5 billion, almost four times its capital investment since acquiring the asset.

What did Scentre Group management say?

Scentre Group CEO Elliott Rusanow said:

We are very pleased to establish a new strategic partnership with Australian Retirement Trust. Westfield Sydney is an iconic destination located in the heart of Sydney’s CBD, visited by more than 33 million customers each year and generating total business partner sales in excess of $1.1 billion… Introducing new capital, through joint venturing our assets, forms a key part of our long-term strategic plan.

What’s next for Scentre Group?

Scentre Group is focused on executing its long-term strategy of partnering on its key destinations to unlock value and introduce new capital. Management expects settlement of the ART transaction in early February 2026, while the group continues managing and developing its 42 Westfield destinations.

The company’s plan remains centred on creating attractive, vibrant places for both customers and business partners, while aiming to grow returns for securityholders through innovative partnerships and ongoing development.

Scentre Group share price snapshot

Over the past 12 months, Scentre Group shares have risen 21%, outperforming the S&P/ASX 200 Index (ASX: XJO) which has risen 7% over the same period.

View Original Announcement

The post Scentre Group brings new partner into Westfield Sydney in $864m deal 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 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. 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.

Knowing which ASX 200 shares to avoid can be just as important as knowing which ones to buy.

With that in mind, let’s take a look at three popular ASX 200 shares that experts are tipping as sells, courtesy of The Bull. Here’s what they are saying:

PLS Group Ltd (ASX: PLS)

Bell Potter has named PLS Group, formerly known as Pilbara Minerals, as an ASX 200 share to sell.

While it is a fan of the lithium miner, it believes that its recent share price rally has taken it into dangerous territory. Especially if lithium prices don’t rebound as quickly as some expect. It said:

Formerly Pilbara Minerals, this lithium miner’s operational performance remains sound. Despite a strong balance sheet and long term tailwinds from electric vehicles and energy storage, lithium supplies exceed demand in the short term and overshadow any catalysts. The recent share price rally has run stronger than most sharemarket experts expected, with the stock still pricing in a cyclical rebound. Downside risk remains if lithium prices stay lower for longer.

QBE Insurance Group Ltd (ASX: QBE)

Bell Potter has also named insurance giant QBE as an ASX 200 share to sell.

It is feeling cautious about the company’s outlook given how premium growth is moderating and claim costs are rising. The broker explains:

This insurance giant has recently delivered a strong performance, which included solid returns on equity and a disciplined underwriting approach. However, forward looking conditions appear more mixed. Premium growth is moderating, and rising claims costs in a higher inflation environment may start to erode margins. Also, in our view, the stock’s re-rating during the past year potentially limits upside. Most of the good news has been priced into the stock, so investors may want to consider cashing in some gains.

Suncorp Group Ltd (ASX: SUN)

Finally, another insurer that has been named as a sell is Suncorp.

Shaw & Partners is feeling bearish due to its insurance risk exposure. And while its shares have pulled back recently, it thinks investors should continue to keep their powder dry. The broker said:

The insurer announced it had received more than 10,000 claims by November 26 in response to recent severe storms in New South Wales and Queensland. The net cost to Suncorp is expected to be about $350 million, according to earlier terms of assessment. About 5000 claims related to motor damage and a further 5000 claims involved homes. Frequent buy-back updates don’t offset insurance risk exposure. The shares have fallen from $21.82 on August 22 to trade at $17.505 on December 18.

The post Experts name 3 ASX 200 shares to sell now appeared first on The Motley Fool Australia.

More reading

• Is it too late to buy surging ASX lithium shares like Mineral Resources and Liontown?
• Forget Pilbara Minerals shares, this ASX lithium stock could be better
• Suncorp shares tread water as investors digest 2026 dividend timeline
• Buy, hold, sell: Flight Centre, Suncorp, and Zip shares
• Investing in a higher-for-longer world and the ASX sector built to cope

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 no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

One of the most dramatic trends on investment markets this year has been the seemingly unstoppable rise of gold, and by extension, ASX gold miners. The precious metal has gone from about US$2,640 an ounce to this week’s record high of US$4,426 over just 2025 to date.

That gain of approximately 67.65% means that gold has eclipsed almost every asset over the past 12 months, including both ASX and US stocks.

This gold price gain has, naturally, resulted in a boom for ASX gold stocks. Miners like Newmont Corporation (ASX: NEM), Perseus Mining Ltd (ASX: PRU), West African Resources Ltd (ASX: WAF) and Vault Minerals Ltd (ASX: VAU) have seen their shares explode this year. Newmont stock, to illustrate, is currently up 163.8% since 1 January.

As a result of this modern-day gold rush, ASX investors might expect to receive a dividend bonanza from their ASX gold shares. After all, that’s what we saw from iron ore miners like Fortescue Ltd (ASX: FMG) and BHP Group Ltd (ASX: BHP) in 2022 when iron ore was going through the roof at the time.

Yet far from the 5-8% dividend yields we saw from BHP and Fortescue back in 2022, gold miners are offering much less today. Perseus Mining stock, for instance, currently trades on a yield of 0.92%.

Evolution Mining Ltd (ASX: EVN) offers investors 1.53%, while Northern Star Resources Ltd (ASX: NST) comes in above average with its 2.05% yield.

Gold miners tend to be more sensitive to the underlying price of their commodity than iron ore stocks do. As such, the triple-digit gains we have seen in many ASX gold stocks this year have played a significant part in blunting those yields.

Why don’t ASX gold miners pay high dividends at record prices?

But even taking this into account, gold miners still tend to offer far lower levels of income than other mining stocks. So why might this be?Well, it probably comes down to the difficult economics of gold mining.

To illustrate, let’s compare a gold miner like Northern Star Resources to Fortescue.

In its 2025 full-year results from August, Fortescue informed investors that it enjoyed an average price of US$84.79 for every dry metric tonne of iron ore that it sold over FY2025. That compares to an average cost of extraction of US$17.99 per wet metric tonne.

That implies a gross profit margin of 78.78% per tonne

Meanwhile, Northern Star reported a cost of US$2,163 for every ounce of gold that it mined in FY2025. It managed to achieve an average sale price of US$3,922 per ounce over the same period. That’s a gross margin of 44.85%.

So even in the midst of a gold boom, Northern Star is only able to enjoy a gross margin of almost half that of Fortescue. And that’s with Fortescue in the midst of a tough iron ore market.

With that low margin, a gold miner is simply unable to spin off the levels of free cash flow to fund bumper dividends in the same way that a low-cost iron ore miner like Fortescue can. This brutal math is why gold miners are probably never going to be strong dividend payers in the same vein as other ASX mining shares. It’s a different story with those capital gains that ASX gold stocks have enjoyed this year, though.

The post At record prices, why don’t ASX gold miners pay high dividends? appeared first on The Motley Fool Australia.

More reading

• Perseus Mining upsizes debt facility, boosting liquidity for growth
• Gold has just smashed record highs and these 3 ASX 200 mining stocks are riding the wave
• Guess how much $10,000 invested in these VanEck ASX ETFs a year ago is worth today?
• 5 things to watch on the ASX 200 on Tuesday
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Sebastian Bowen has positions in Newmont. 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.

Having a bit of exposure to the small side of the market can be a good thing for a portfolio if your risk tolerance allows it.

You only need to look at the performance of the S&P/ASX Small Ordinaries index to see this.

It is up 22% year to date, whereas the S&P/ASX 200 index is only up 7.4%.

But which small cap ASX stocks could be worth considering? Let’s take a look at two that Morgans is positive on. They are as follows:

Atturra Ltd (ASX: ATA)

The first small cap ASX stock that Morgans has been looking at is Attura.  It is a technology company providing a range of enterprise advisory, consulting, IT services, and solutions to local government, utilities, education, defence, federal government, financial services, and manufacturing industries,

It recently revealed the immediate termination of a fixed term contract with an Australian public sector body. While this is disappointing, Morgans believes that significant share price weakness since the announcement has created an opportunity for investors. It said:

ATA have announced a contract dispute which will negatively impact its FY26 and its 1H26 result. Management commented that “Atturra does not have a history of disputes or termination of material contracts and views this as a one-off occurrence. ATA’s balance sheet remains strong, and the Company sees no ongoing impact from this purported termination.” We agree and see this as a largely one-off event. We reduce our forecasts in line with guidance which lowers our TP to 80cps (was 95cps).

Morgans has an accumulate rating and 80 cents price target on its shares. This implies potential upside of 21% for investors over the next 12 months.

PeopleIn Ltd (ASX: PPE)

Another small cap ASX stock that Morgans is positive on is PeopleIn. It is a workforce solutions company servicing over 4,000 businesses.

It focuses on high-demand and defensive employment sectors including engineering, trades and labour, food services and agriculture, technology, finance, corporate services, education and defence.

Morgans was pleased with the company’s decision to divest businesses and believe it will create higher quality earnings. It explains:

PPE has now divested two businesses as it, refocuses on its core competencies, being Queensland infrastructure, food and agriculture, defence and professional services. Whilst the divestments have been opportunistic and at healthy earnings multiples, the impact has been dilutionary to EPS. Offsetting the lower EPS, the residual business should prove higher quality (and higher growth), as the business looks beyond what is approaching cyclically low earnings.

To this end, we continue to see earnings growth driving share price appreciation through FY27/28, with any turnaround unlikely to be visible until 4QFY26. Hence, we reiterate our Speculative Buy rating with a $1.10/sh price target.

Morgans has a speculative buy rating and $1.10 price target on its shares. This implies potential upside of 25% over the next 12 months.

The post Morgans names 2 small cap ASX stocks to watch appeared first on The Motley Fool Australia.

More reading

• At record prices, why don’t ASX gold miners pay high dividends?
• Down 56% in 2025, are Treasury Wine shares a good buy for 2026?
• Bell Potter names the best ASX 200 growth shares to buy in 2026
• Prediction: Xero stock is going to double in 2026
• From gold to copper and lithium: Mining stocks are on a tear and these 4 ASX ETFs tell the story

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

Treasury Wine Estates Ltd (ASX: TWE) shares are marching higher today.

Shares in the S&P/ASX 200 Index (ASX: XJO) global wine company closed yesterday trading for $4.95. In early afternoon trade on Tuesday, shares are changing hands for $5.035 apiece, up 1.7%.

For some context, the ASX 200 is up 0.8% at this same time.

As you’re likely aware (or should be if you read the headline!), today’s outperformance is not par for the course for Treasury Wine shares this year.

Despite today’s welcome boost, shares in the ASX 200 wine stock remain down 55.5% year to date.

Those losses will have only been modestly eased by the 40 cents per share in partly franked dividends Treasury Wine paid to eligible stockholders over the year. The ASX 200 stock trades on a trailing dividend yield of 7.9%.

So, after this horror year, is the company now a good buy for 2026?

Should you buy Treasury Wine shares today?

Bell Potter Securities’ Christopher Watt recently ran his slide rule over the Aussie wine company (courtesy of The Bull).

“This global wine giant owns the premium Penfolds brand, among other labels,” Watt said.

As for the big decline in Treasury Wine shares, he noted, “The share price recently plunged after TWE downgraded earnings.”

Watt explained:

The company now expects earnings before interest and tax (EBIT) to range between $225 million and $235 million in the first half of fiscal year 2026. Prior EBIT consensus was $334 million.

Indeed, even at the higher end of its revised guidance, investors will have taken note that Treasury Wine’s first-half earnings forecast is down a sharp 30%.

“We are currently experiencing category weakness in the US and China, two of our key growth markets, which will impact our business performance in the near-term,” Treasury Wine CEO Sam Fischer said.

But Watt noted that management isn’t sitting on its laurels.

He said:

The company is taking action to restore channel distribution and is actively reducing inventory levels across China and the United States. The shares have fallen from $7.88 on July 1 to trade at $4.80 on December 18.

Despite that steep sell-down, Watt isn’t quite ready to pull the trigger yet, issuing a hold recommendation on Treasury Wine shares.

According to Watt:

TWE has a strategy, but a recovery will take time. At these price levels, patient investors can hold as the transition towards luxury wine remains a long-term positive. The stock carries calculated risk, so investors should continue to monitor news developments.

The post Down 56% in 2025, are Treasury Wine shares a good buy for 2026? appeared first on The Motley Fool Australia.

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