Category: Stock Market

AMP Ltd (ASX: AMP) has revised its end-of-year forecast for the S&P/ASX 200 Index (ASX: XJO) from 7,900 points to 8,100 points.

The upgrade follows the ASX 200 cracking the 8,000 mark for the first time on Monday.

The market benchmark reset its all-time record high again yesterday when it reached an intraday peak of 8,083.7 points.

On Thursday, the market is down 0.33% to 8,031.7 points at the time of writing.

The market wobbled today on news of a minute rise in the unemployment rate last month, which prompted new speculation about the Reserve Bank’s next move on interest rates.

Let’s see what AMP chief economist Dr Shane Oliver has to say about the ASX 200’s path from here.

‘Roundaphobia’ may charge up market exuberance

AMP expects the ASX 200 to rise in value by 6.7% (excluding dividends) in 2024, finishing the year at about 8,100 points.

Its original forecast, published in May, was for the ASX 200 to finish at about 7,900 points.

In a blog, Dr Oliver said the upgrade reflected “prospects for lower interest rates globally and eventually in Australia boosting the growth outlook next year”.

He added that the ASX 200 pushing through a big round number was psychologically significant for investors. He said this milestone may inject “roundaphobia” exuberance into the market, with more investors feeling inspired to invest and thereby possibly pushing the benchmark’s value higher.

3 factors driving the ASX 200 higher

Dr Oliver explained there were three factors that drove the ASX 200 to its new record high this week.

1. Renewed optimism about interest rate cuts in the United States

Last Friday, we got the news that the US consumer price index (CPI) fell 0.1% between May and June. That put the annual rate at 3%, which was reportedly the lowest figure in more than three years.

Dr Oliver said:

A US rate cut is now fully priced in for September with nearly three cuts priced in by year end. This follows cuts in Switzerland, Sweden, Canada and Europe.

Lower interest rates offer the prospect of better global growth in 2025 and they also help improve share market valuations. This has further boosted global shares, pulling Australian shares up.

2. What happens in the US will eventually happen to the ASX 200

Better prospects of a rate cut in the US have lifted hopes that the Reserve Bank will not raise rates here.

Dr Oliver said:

Consequently, we have seen money market expectations swing from around 70% probability of another hike by year end a few weeks ago to now just 16%.

This has further helped boost interest sensitive Australian shares.

3. Signs of rotation from tech to cyclical shares

Dr Oliver said there were signs of a rotation from tech shares, which typically offer higher long-term growth potential, to value shares and cyclical stocks.

ASX 200 value and cyclical shares are more likely to benefit from rate cuts and any associated economic growth.

Dr Oliver said:

This has been most evident in the US with a resurgence in small caps, with the Russell 2000 small cap index up more than 11% in the last week, but it may also benefit the relatively cyclical Australian share market.

Despite these three positive factors, Dr Oliver warned of a “volatile and more constrained outlook” ahead.

‘High risk of correction’ in August/September

Dr Oliver said an ASX 200 share correction may occur in August/September, which may present buying opportunities for investors.

Dr Oliver said:

But given risks around valuations, near term growth and geopolitics, we anticipate a volatile and more constrained outlook with a high risk of a correction in the August to September period, particularly if investors factor in the more negative economic implications of a Trump victory.

He clarified that August/September was historically a seasonally weak period for the market.

The post ASX 200 to finish 2024 higher than expected: AMP appeared first on The Motley Fool Australia.

More reading

• Is the FY25 outlook compelling for AMP shares?
• Why AMP says share markets ‘can continue to rally’ in FY25
• Do the dividends from AMP shares come fully franked?
• Here are the top 10 ASX 200 shares today

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 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.

ASX uranium shares are experiencing a tough week. At the time of writing, all but one of the major uranium stocks is in the red.

Despite market-sensitive announcements for only one company, it hasn’t stopped investors from selling down the sector today. Here’s the performance on Thursday at the time of writing:

• Paladin Energy Ltd (ASX: PDN): down 3.83%, at $12.92
• Deep Yellow Ltd (ASX: DYL): down 4.73%, at $1.31
• Boss Energy Ltd (ASX: BOE): down 1.92%, at $3.84
• Bannerman Energy Ltd (ASX: BMN): down 1.63%, at $3.02
• Peninsula Energy Ltd (ASX: PEN): flat, at 11 cents apiece

Whilst it’s been relatively quiet from the companies’ ends, it’s worth noting that the energy regulator has potentially ruled out nuclear as the country’s energy solution.

The Australian Energy Market Operator (AEMO) has chimed into the debate, and its comments could be one reason investors appear spooked today. Let’s take a look.

AEMO’s stance on nuclear power

Whilst not market-sensitive in any way, comments by Daniel Westerman, chief executive of the AEMO, could be one factor contributing to the decline in ASX uranium shares today.

According to its website, AEMO’s role is to “manage the electricity and gas systems and markets across Australia, helping to ensure Australians have access to affordable, secure and reliable energy”.

Speaking at the Clean Energy Summit on Tuesday, Westerman waved off nuclear power as a potential solution to Australia’s energy needs. He cited costs and timing as the main reasons.

Even on the most optimistic outlook, nuclear power won’t be ready in time for the exit of Australia’s coal-fired power stations.

And the imperative to replace that retiring coal generation is with us now.

He labelled nuclear power as “comparatively expensive” and impractical for replacing coal-fired generators in the near term. This may have ramifications on ASX uranium shares.

With coal plants shutting down faster than anticipated, the push for renewable energy sources – like wind and solar – could be the preferred path.

Westerman said AEMO doesn’t determine whether one type of energy supply is “good or bad” but is “focused on finding the least-cost path to reliable and affordable energy for Australian consumers”.

Apparently, this path of least resistance doesn’t include nuclear. This outlook could diminish the near-term prospects for uranium shares.

ASX uranium shares in focus

The overall sentiment in the uranium market has been shaky. Despite some positive developments, including potential supply constraints due to new tax policies in Kazakhstan, investor confidence remains fragile.

Deep Yellow is the only ASX uranium share that actually announced something today. The company posted its presentation from the Noosa Mining Investor Conference.

In it, the company touted its “significant exploration upside” and “significant production capacity”. It also discussed the case for uranium as “critical for a clean energy future”.

Time will tell if this statement is to be true or not.

Foolish takeout

Some might think the recent dip in ASX uranium shares presents a buying opportunity, especially if they believe in the long-term potential of nuclear energy.

However, the market remains highly volatile, and the political and regulatory situation regarding energy security does not help. As always, stay informed.

The post Why are ASX uranium shares having a week to forget? appeared first on The Motley Fool Australia.

More reading

• Why Deep Yellow, DroneShield, Mount Gibson Iron, and Praemium shares are falling
• These ASX stocks could rise ~30% to 45%
• Why GR Engineering, Infratil, Paladin Energy, and WiseTech shares are falling today
• Here are the top 10 ASX 200 shares today
• Why did ASX uranium shares like Boss Energy have such a bumper day?

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 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 S&P/ASX 200 Index (ASX: XJO) dived 0.18% immediately after the latest unemployment data was released by the Australian Bureau of Statistics (ABS) on Thursday.

The data revealed a less than 0.1% rise in the unemployment rate to 4.1% in June in seasonally adjusted terms. This compares to an unemployment rate of 4% in May, 4.1% in April, and 3.8% in March.

The ASX 200 was already down 0.12% for the day when the jobs data was released at 11.30am AEST.

The index initially fell a further 0.18% in the first 10 minutes after the data was released. ASX 200 shares then rebounded and recovered almost all of that loss by midday.

Then they spiralled down again, losing 0.22% by 12.30pm. Then up they went again.

Overall, the ASX 200 is down 0.23% at the time of writing, which is where it was just before the data came out.

So, why was the market’s reaction to the new jobs numbers so erratic?

ASX 200 topsy turvy after jobs news released

Well, it’s a case of good news/bad news here.

For many months, the market has been waiting with bated breath for any indication that an interest rate cut may be on the cards.

Then, last month’s higher-than-expected inflation numbers prompted speculation that a rate rise may come first. Inflation for the 12 months to May was 4%, up from 3.6% in the 12 months to April. Eek.

So, the market is nervous about interest rates right now.

That brings us to the good news/bad news element of today’s unemployment figures.

The ‘good’ news is that unemployment went up. The reason that is ‘good’ news is because historically, inflation won’t go down without a rise in unemployment.

And everyone wants inflation to go down, because that’s our ticket to interest rate cuts.

So, last month’s small uptick in unemployment represents progress toward lower inflation.

But it’s the pace of progress that is the bad news here.

The unemployment rate lifted by less than 0.1% last month. It’s now back to where it was in April. So, over the past two months, it’s fair to say the jobs market has been incredibly resilient and stable.

Resilient jobs tend to mean businesses are going well. They’re making enough money to retain staff and even hire more. But it also means the progress on bringing inflation down appears to be stalling.

And that is something the Reserve Bank of Australia is concerned about. Governor Michele Bullock has explained on many occasions that if the board feels inflation is not moving sustainably toward the target 2% to 3% band, the board will not hesitate to do what is necessary (i.e., raise rates) to achieve this goal.

The jobs data in detail

Employment rose by 50,200 people — which was twice consensus estimates — and the number of unemployed persons rose by 9,700.

The participation rate rose to 66.9%, which is only 0.1% lower than the historical high of 67% recorded in November 2023.

Bjorn Jarvis, ABS head of labour statistics, said:

The employment-to-population ratio and participation rate both continue to be near their 2023 highs. This, along with the continued high level of job vacancies, suggests the labour market remains relatively tight, despite the unemployment rate being above 4.0 per cent since April.

Jarvis said more people than usual worked reduced hours in June due to illness, and fewer people took annual leave.

He commented:

In June, we continued to see more people than usual working reduced hours because they were sick, similar to what we saw in May.

Around 4.5 per cent of employed people in June could not work their usual hours because they were sick, compared to the pre-pandemic average for June of 3.6 per cent.

However, we also saw less people taking annual leave in June 2024. There were around 12.5 per cent of people working fewer hours because they were on leave, compared with the pre-pandemic average for June of 14.5 per cent.

The underemployment rate fell 0.3% to 6.5%.

What does all this mean?

The labour market is “too strong for inflation to fall”, according to VanEck’s head of investments and capital markets, Russel Chesler (courtesy Australian Financial Review (AFR)).

Chesler said:

It’s a tough pill to swallow, but the reality is that an unemployment figure of at least 4.5 per cent would be needed to cool inflation.

With inflation coming in at 4% in May, Chesler thinks the RBA will have to raise rates to knock inflation back onto a sustainable downward trajectory.

This is the only way to push inflation back into the RBA’s target range. The RBA did not go as hard as other developed economies with rate rises, and we are now seeing this play out with escalating inflation. It’s time for the RBA to rip the band-aid off.

But State Street’s Asia Pacific economist, Krishna Bhimavarapu, maintains her view that the RBA will cut rates in November.

Bhimavarapu said:

The key takeaway is that the unemployment rate increased by a tenth to 4.1 per cent …

We continue to view an August rate hike to be a bad idea, and still think the cash rate will be cut in November.

The big test for the economy will come on 31 July when the second quarter inflation data is released.

The RBA pays much more attention to quarterly inflation data given monthly readings do not cover all goods and services and, thus, are notoriously volatile.

The Reserve Bank’s next board meeting to discuss interest rates is scheduled for 5-6 August.

Energy shares lead the ASX 200 on Thursday

Energy shares are leading the ASX 200 today, with the S&P/ASX 200 Energy Index (ASX: XEJ) up 0.49%.

Woodside Energy Group Ltd (ASX: WDS) shares are up 1.05%, and Santos Ltd (ASX: STO) is up 1% on rising oil prices. Brent crude is up 0.45% at US$85.45 per barrel at the time of writing.

Oil prices are rising due to a larger-than-expected drawdown in US crude inventories, according to Trading Economics.

The post Why did the ASX 200 dip on the latest unemployment figures? appeared first on The Motley Fool Australia.

More reading

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• ASX 200 hits record high, UBS keeps end of year target steady
• 5 things to watch on the ASX 200 on Wednesday
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Bronwyn Allen has positions in Woodside Energy Group. 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.

Exchange-traded funds (ETFs) don’t just provide investors with access to growth stocks or indices. They can also be used to generate income.

For example, listed below are two ASX ETFs that provide investors with access to groups of dividend shares.

Here’s why they could be top options for income investors in the new financial year:

Betashares Australian Top 20 Equity Yield Maximiser Fund (ASX: YMAX)

The first ASX ETF for income investors to look in FY 2025 is the Betashares Australian Top 20 Equity Yield Maximiser Fund.

It aims to generate attractive quarterly income and reduce the volatility of portfolio returns by implementing an equity income investment strategy over a portfolio of the 20 largest blue-chip shares listed on the Australian share market. It does this using something called a covered call strategy.

The fund manager recently recommended the ETF as an option to counter falling dividend yields. It said:

YMAX is an investment option for those seeking quarterly distributions and reduced portfolio volatility. […] Betashares’ range of Yield Maximiser funds use a covered call strategy to offer additional income over and above dividends generated by the portfolio. This approach takes a two-pronged strategy: earning dividends from the underlying stocks and generating income from writing call options on those shares. A covered call strategy performs well in a neutral or gradually rising market, allowing call options to generate income without stocks being called away too often, as has been seen in recent months.

It currently trades with a trailing 12-month dividend yield of 7.8%.

Vanguard Australian Shares High Yield ETF (ASX: VHY)

Another ASX ETF for income investors to look at in FY 2025 is the Vanguard Australian Shares High Yield ETF.

This ETF doesn’t use a covered call strategy. It just focuses on loading up with ASX dividend shares that brokers are forecasting to provide big dividend yields.

But this doesn’t just mean you buy banks and miner. The fund is designed to provide investors with a diverse group of approximately 70 shares and limits how much it invests in any particular industry or company.

At present, you will find companies such as BHP Group Ltd (ASX: BHP), Coles Group Ltd (ASX: COL), Commonwealth Bank of Australia (ASX: CBA), and Transurban Group (ASX: TCL) among its holdings.

The Vanguard Australian Shares High Yield ETF currently trades with a trailing dividend yield of 5%.

The post Buy these top ASX ETFs for income in FY 2025 appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Transurban Group. The Motley Fool Australia has positions in and has recommended Coles 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.

With the S&P/ASX 200 Index (ASX: XJO) hitting a few new all-time highs over the past week, it goes without saying that it’s been a very lucrative period to own many ASX 200 shares in recent months. That sentiment holds if we take a look at Woolworths Group Ltd (ASX: WOW) shares.

Woolworths’s share price performance during the first four months of 2024 was one of the worst it has experienced in years. The ASX 200 supermarket operator started the year at $37.51 a share.

By early May, those same shares had hit a new 52-week low of just $30.12. Not only was that a new 52-week low for Woolworths, but it was also the lowest its shares had traded at since the early days of COVID-19 in May 2020.

Investors reacted with dismay to Woolworths’ half-year earnings in February, which also unfortunately coincided with the abrupt resignation announcement of its outgoing CEO Bradford Banducci.

The result was a steep descent to that four-year low we saw in May. At the time, I wrote about this share price sell-off, concluding that the company was in a rare moment of value and calling the shares a buy over Woolworths’ arch-rival Coles Group Ltd (ASX: COL). I also pointed out that the Woolworths dividend yield, which was north of 3.4% at the time thanks to this share price drop, was unusually high at the time.

But ever since early May, Woolies has been slowly but steadily recovering. Today, Woolworths shares are trading at $35.15 each, up 0.43% for the day thus far. That means that the company is also up a whopping 16.3% or so from that 52-week low we saw in May today.

Check that out for yourself below:

Are Woolworths shares still a buy today?

Anyone who bought this company back in May would be sitting very prettily indeed on a healthy gain right now. But what about investors considering buying in today? Are Woolworths shares still a buy at their current pricing?

Well, those are hard questions to answer.

But we do know something for certain: Woolworths shares offer far less value today than they did two and a half months ago.

Back then, the company was offering a dividend yield of 3.4%. Today, it’s at 2.99%.

Back then, Woolworths shares were trading on an annualised price-to-earnings (P/E) ratio of 20.2. Today, it would be on 23 or so.

If Coles shares were the same ~$16 level they were in early May, I would say they represent better value today. However, Coles has also enjoyed a bit of a recovery in recent months, and today is up to around $17.63 a share.

As such, we have to conclude that both companies don’t really represent a compelling buying opportunity today. Sure, in my view, Woolworths shares aren’t overvalued. They aren’t at the near-$40 pricing we were seeing last year.

However, it’s still hard to call the company a screaming buy. If I owned Woolworths shares today, I wouldn’t be selling. But if I were looking to buy in, I’d probably wait for a better entry point.

The post Have ASX investors missed their chance to buy Woolworths shares? appeared first on The Motley Fool Australia.

More reading

• Buy Coles and this quality blue chip ASX 200 share in July
• Up 12% from 52-week lows, is Woolworths stock still a buy?
• Wesfarmers vs Woolworths: Which are the best ASX shares to buy today?
• Buy Coles and these ASX 200 dividend stocks in July
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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 positions in and has recommended Coles Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Superannuation funds had an above-average year in FY24, with the average balanced fund returning 7.2% and the average growth fund returning 9.4% in the twelve months to May 31, 2024.

This compares to five-year averages of 5.1% and 6.7%, respectively. With these kinds of returns, investors might be wondering where their funds are actually invested.

Some super members have done the digging and are unhappy with some of the results found in various super funds’ environmental, sustainability and governance (ESG) investing options.

The funds are now facing accusations of ‘greenwashing’, with AustralianSuper at the centre of the controversy.

Superannuation funds in the spotlight

Despite promising ethical investments as part of its ‘Socially Aware’ product, AustralianSuper has been found investing in coal, oil, and gas industries, according to The Australian Broadcasting Corporation.

The reporting notes that the fund’s latest financial disclosures, which list its holdings as at the end of December, show it has invested members’ savings in the shares of petrol retailer and distributor Ampol Ltd (ASX: ALD) and resources player Mineral Resources Ltd (ASX: MIN).

An AustralianSuper member was shocked to discover that his Socially Aware option was invested in these fossil fuel companies.

He believed his superannuation was ‘ethically’ invested, only to find a supposed loophole that allowed investments in property, infrastructure, and direct loans to coal, oil, and gas companies. Huh?

According to AustralianSuper, it only screens Australian and international shares for its Socially Aware option – not other asset classes like fixed income, the ABC reports.

All the investments in question are classified as ‘credit’, or direct loans to companies, in the form of corporate bonds, that provide fixed income to investors. Per the ABC:

AustralianSuper’s financial disclosures show it has been lending members’ funds to fossil fuel companies around the world, including Indonesian coal miner Adaro, Canadian oil and gas company Baytex and US-based Magnolia Oil and Gas.

“It looks like greenwashing”, the member said, adding that he has taken his complaint to the Australian Securities and Investment Commission (ASIC).

Regulatory reactions

ASIC deputy chair Sarah Court said the regulator had looked into the matter, but did not find sufficient evidence to prove that AustralianSuper misled its members.

Court acknowledged the concerns about the wording of AustralianSuper’s policies but said there still wasn’t enough flesh to put on the skeleton to form a case.

We think these statements on AustralianSuper’s website go pretty close to crossing a line for investors.

On this occasion, we found it didn’t cross that line into being misleading.

The fund reportedly plans to announce changes to its investment policies following a separate ABC investigation showing it held more than $26 million worth of shares in companies involved in nuclear weapons.

Superannuation doubling down on fossil fuels

It would appear this trend has been in situ for some time. Environmental advocacy group Market Forces crunched the numbers in May.

It found that Australia’s largest 30 super funds had doubled their investments in “high-emitting companies” over the past two years.

The total investment reached $39 billion. Meanwhile, clean energy investment from super funds decreased to $7.7 billion.

It created a “climate wreckers” index to track the exposure of superannuation funds to the high-emitting names. UniSuper was on top, with $2.2 billion exposure to this index.

Meanwhile, Commonwealth Super and MLC had more than $1 billion exposure each.

AustralianSuper had $9.8 billion of funds invested in these companies. But, this made up just 9.7% of its total funds under management. It made up more than 10% of the others.

The report also found that Woodside Energy Group Ltd (ASX: WDS) could make up to 20% of AustalianSuper’s investment value.

What’s the path forward?

While this controversy relates to ESG-style products, Superannuation funds face a challenging path ahead, regardless of what happens with these accusations.

Investors are also opting to manage their own super more and more. As reported by my colleague Bronwyn, a recent survey found there are more than 616,000 self-managed super funds (SMFs) in Australia.

This came as more than 18,000 SMSFs were set up in 2023. SMSFs could also give more investor optionality in certain cases, adding to the appeal.

The question now is what this means moving forward. After a decent year in returns, will most investors support a shift away from the current regime?

Only time will tell what this means for the superannuation industry.

The post ‘Looks like greenwashing’: Accusations brought against superannuation funds appeared first on The Motley Fool Australia.

More reading

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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 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.

No investor is immune to making a mistake. I’ve certainly had my fair share over the years. However, no other mistake is likely as expensive as my decision on DroneShield Ltd (ASX: DRO) shares — a miscalculation that cost my portfolio $29,612.

The counter-drone technology company is among the top gainers within the S&P/ASX All Ordinaries Index (ASX: XAO) for the past year’s return.

While the benchmark is up 11%, Australia’s only publicly listed drone defence pure-play is a mind-boggling 467% higher.

My $29,612 mistake on DroneShield shares

I nabbed 17,522 DroneShield shares in April 2020 for 11 cents apiece — an investment worth about $1,930 at the time. At the end of yesterday’s session, the DroneShield share price stood at $1.83, nearly 17 times higher than my purchase price.

Shouldn’t I be jumping for joy after buying DroneShield shares at 11 cents if they’re now $1.83?

Yes, if I still owned them…

The problem is that I sold the lot — not for $1.00 per share, not even 50 cents. No, I sold out completely when the share price hit 14 cents, taking home a profit of $525.66 before tax. Don’t spend it all at once, right…

I left $29,612 on the table by selling my DroneShield shares too soon.

Why did I sell? In short, the temptation of a quick gain. I knew DroneShield was a speculative investment at the time. So when the share price raced ahead 27% only a couple of months after initially investing, I thought a $525 profit in the hand sounded pretty good.

Unfortunately, this type of short-term thinking is precisely what prevents compounding. As Warren Buffett said, “If you aren’t willing to own a stock for 10 years, don’t even think about owning it for 10 minutes.”

Greed can hurt in both directions

What’s the lesson from my DroneShield shares mishap?

It shows that greed doesn’t need a declining share price for it to be costly. Imagine the accumulative forgone gains among investors who sold Apple Inc. (NASDAQ: AAPL) before 2019 merely because the profits were too alluring to pass up.

Investing decisions should be rooted in rational assessments of a company’s value. If you’ve done the legwork to conclude the business is worth $100 per share and it’s valued at $20, an increase to $30 shouldn’t prompt a sale.

Selecting good companies is half the battle as an investor. The other half is being rational and avoiding psychological traps.

So before cashing in any shares, ask yourself: Am I selling because it makes sense or because of greed?

You might just dodge a do-over of my $29,612 DroneShield shares mistake.

The post DroneShield shares taught me a $29,612 lesson. Stick to your guns appeared first on The Motley Fool Australia.

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Motley Fool contributor Mitchell Lawler has positions in Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Apple and DroneShield. The Motley Fool Australia has recommended Apple. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The S&P/ASX 200 Index (ASX: XJO) is having a subdued session on Thursday. At the time of writing, the benchmark index is down 0.2% to 8,039.7 points.

Four ASX shares that are not letting that hold them back are listed below. Here’s why they are rising today:

Accent Group Ltd (ASX: AX1)

The Accent Group share price is up almost 10% to $2.15. Investors have been buying this footwear retailer’s shares following the release of a trading update. Accent revealed that it expects to report EBIT (before one-offs) in the range of $123.2 million to $125.2 million for FY 2024. This would mean a 9.8% to 11.2% decline year on year. Analysts at Bell Potter were forecasting Accent to deliver EBIT of $124.6 million for the year, so the company could yet outperform expectations despite the tough economic environment. Accent achieved like for like sales growth of 4.2% during the second half.

Dusk Group Ltd (ASX: DSK)

The Dusk Group share price is up 30% to 76.5 cents. This has also been driven by the release of a trading update this morning. The specialty retailer of home fragrance products revealed that its performance improved markedly during the second half. This culminated in positive sales growth of 0.4% for the last five weeks of the financial year. Management advised that its improved sales performance in the second half reflects the implementation of various strategic initiatives.

Evolution Mining Ltd (ASX: EVN)

The Evolution Mining share price is up over 3% to $4.11. Investors have been buying this gold miner’s shares following the release of its quarterly update. During the fourth quarter, Evolution Mining reported record quarterly group cash flow $230 million, which was up 171% on the previous quarter. Evolution also reported a 14% increase in gold production to 212,070 ounces and a 13% reduction in its all-in sustaining cost to $1,275 per ounce.

Zip Co Ltd (ASX: ZIP)

The Zip share price is up 9% to $1.75. This follows the completion of the buy now pay later provider’s capital raising and the release of its quarterly update. In respect to the former, Zip was able to raise $217 million (before costs) via an equity placement at just $1.56 per new share. This represents a discount of just 2.8% to its last close price. These funds will be used for the early repayment of Zip’s existing corporate debt facility and associated exit fee. Zip didn’t have any problems raising the funds after impressing investors with strong growth in the fourth quarter. It is likely this performance that is really driving its shares higher today.

The post Why Accent, Dusk, Evolution Mining, and Zip shares are pushing higher today appeared first on The Motley Fool Australia.

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

S&P/ASX 200 Index (ASX: XJO) gold stock Evolution Mining Ltd (ASX: EVN) is racing ahead of the benchmark today.

Evolution Mining shares closed yesterday trading for $3.98. In late morning trade on Thursday, shares are changing hands for $4.14 apiece, up 4.0%.

For some context, the ASX 200 is down 0.1% at this same time.

As you can see on the chart below, this now sees the Evolution Mining share price up a stellar 33.0% over the past six months.

Here’s what’s boosting the ASX 200 gold stock again today.

ASX 200 gold stock lifts on record cash flow

Investors are snapping up Evolution Mining shares following the release of the miner’s quarterly update covering the three months ending 30 June.

Highlights included a 14% increase in quarterly gold production to 212,070 ounces. Copper production was broadly in line with the prior corresponding quarter at 20,318 tonnes.

And the ASX 200 gold stock is likely catching some tailwinds after reporting a 13% decline in All-in Sustaining Cost (AISC), which dropped to $1,275 per ounce (US$842/oz).

This helped Evolution achieve record quarterly cash flow of $230 million, up 171% from the $85 million reported in the March quarter. Net mine cash flow also notched a new quarterly record, leaping 74% to $242 million, equivalent to $1,170 per ounce.

As for the balance sheet, the company had cash holdings of $403 million as at 30 June, after paying out $40 million to cover the interim dividend. That’s up 87% from the $215 million cash reported on 31 March.

And gearing improved to 25%, down from 33% on 30 June 2023.

Evolution also reported that full-year cash flow came in at $367 million. Gold production was 716,700 ounces, with copper production of 67,862 tonnes, at an AISC of $1,477 per ounce (US$975/oz).

Evolution will release its FY 2024 full-year financial results and guidance for FY 2025 on 14 August.

What did management say?

Commenting on the results sending the ASX 200 gold stock charging higher today, Evolution Mining CEO Lawrie Conway said, “We had an outstanding June quarter with sector leading cash generation and low costs which showcase the quality of our portfolio.”

Conway added:

We achieved multiple records at an operational level, and I am particularly pleased that June was the strongest month of the quarter which builds momentum moving into FY25. This result is a credit to our team.

Evolution vice president discovery, Glen Masterman separately addressed the exploration drilling results at Ernest Henry, noting these returned exceptional results for the ASX 200 gold stock from extensional drilling to the Bert orebody.

According to Masterman:

Drilling results from Bert continue to reinforce the significant growth options at Ernest Henry. Located adjacent to the north wall of the pit, Bert represents a potential production target that could be mined independently of the underground materials handling system.

We are excited about the opportunity to extend the mineralisation footprint at Bert with further drilling to be completed during FY25.

The post Why is this ASX 200 gold stock smashing the benchmark again today? 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 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 artificial intelligence (AI) stock surge that started in 2023 has created some fortunes.

Over in the United States, companies like Nvidia Corp (NASDAQ: NVDA) and Microsoft Corporation (NASDAQ: MSFT) have been major beneficiaries since entering the AI foray. Both stocks are up 144% and 19% this year to date, respectively.

Life360 Inc (ASX: 360) is another AI stock riding the wave, but right here on the ASX in Australia.

Life60 shares are trading more than 120% higher this year to date, offering investors comparable gains to Nvidia. They are currently swapping hands at $16.70 apiece at the time of writing.

As AI continues to revolutionise various industries and with many shares still rallying, it begs the question of whether it is still worth buying Life360 to capitalise on the AI stock surge. Here’s what the experts think.

Why consider this ASX AI stock?

Life360 shares were a major ASX performer in FY24, rallying more than 115% in that period. With the backdrop of AI driving positive sentiment, many brokers are still bullish on the AI stock.

According to CommSec, the consensus of analyst estimates is that it is a strong buy. Here are the main reasons brokers say to buy Life360 shares.

1. Adoption of its technology

The company is leveraging AI to enhance safety and connectivity for families worldwide through its mobile app of the same name.

The app provides real-time location updates, safety alerts while driving, and rapid emergency responses. It doesn’t take great imagination to see the benefits of this feature.

And this hard-to-replicate business advantage is pulling through to Life360’s financials. Revenues increased by 15% year over year in Q1, reaching US$78.2 million. This growth was driven by a jump in premium subscriptions and reduced churn rates The company put this down to the expansion of its safety features.

Bell Potter analysts are optimistic about Life360 due to the potential expansion of the technology. It recently retained its buy rating on the AI stock with a price target of $17.75. It believes the company has the potential to leverage its large and growing user base to enter and disrupt new markets.

2. Data collection possibilities

The app helps track children, elderly individuals, and those with special medical needs. This broad user base provides valuable data that can be used to fuel AI-driven innovations.

Morgan Stanley analysts see vast data collection capabilities as a competitive advantage for Life360. The company’s subscriber base is around 66 million users, which is a tonne of a lot of insights.

The thinking is that Life360 can glean unique and actionable insights from these data points. Data is like digital gold in the modern age, so it’s not surprising to see Morgan Stanley’s posture so upright on this with the AI stock.

Solaris Investment Management’s chief investment officer, Michael Bell, also praised Life360’s growth, highlighting that the app has more than 2 million paying circles, ahead of expectations.

3. Future outlook

It’s worth noting that Life360 is exploring monetisation opportunities through advertising.

Following its acquisition in 2021, the integration of Tile within the core Life360 subscription model could drive higher conversion rates and lower churn over time. This could also support subscription revenue growth.

Goldman Sachs analysts project the same outlook and estimate that Life360 is exposed to a total global addressable market (TAM) of US$12 billion. In a May note, it saw significant opportunities for the AI stock to expand its product suite and grow average revenue per paying circle (ARPPC).

The broker notes that Life360’s subscription business trades at a discount to global peers despite its superior growth outlook.

It rates Life360 a buy:

The company is now scaling margins and earnings rapidly off a low base, with attractive unit economics and potential structural profitability tailwinds on the horizon from a reduction in effective app store fees.

Life360’s Subscription business currently trades at a discount to global subscription app peers when adjusting for its superior growth outlook.

We see scope for re-rating as Life360 demonstrates operating leverage, ongoing subscription growth and user monetisation via ads. We are Buy rated on Life360.

Is this AI stock a buy?

Life360’s innovative use of AI, robust financial performance, and significant growth potential could make it an attractive option for investors looking to profit from the AI stock surge. Brokers are bullish, and the stock continues its ascent in FY25.

However, as with any investment, it’s essential to consider your risk tolerance and investment goals. While Life360 appears poised for continued growth, there’s no certainty it will get there. Investors should always weigh the potential rewards against the risks and seek professional advice when necessary.

The post Should I buy Life360 shares to profit from the AI stock surge? appeared first on The Motley Fool Australia.

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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 positions in and has recommended Goldman Sachs Group, Life360, Microsoft, and Nvidia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has recommended Microsoft and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.