Category: Stock Market

Are you on track with your retirement planning journey? As we enter a new financial year, our super contributions are worth checking to ensure we’re prepared.

Superannuation plays a crucial role in Aussies’ retirement savings strategy. Exploring average contributions across different age groups gives us valuable insights into retirement readiness.

In this article, I examine the average annual super contributions for individuals aged 45-49, 50-54, and 55-59. Please note that the averages used below are my calculations using FY22 data from the Australian Taxation Office (ATO).

Average annual contributions by age group

Based on the data, the average superannuation contributions for different age groups are as follows.

Age group	Employer	Personal	Other	Total
40-44	$7,306	$954	$309	$8,569
45-49	$7,418	$1,500	$456	$9,374
50-54	$7,264	$2,495	$671	$10,430
55-59	$6,897	$5,027	$879	$12,803

Ages 45 to 49: Increasing awareness of retirement planning

For individuals aged 45-49, the total average annual contribution for FY22 was $9,374, which included employer contributions of $7,418 and personal contributions of $1,500.

There has been an increase in personal contributions compared to the 40-44 age group, indicating growing awareness and proactive steps towards retirement planning.

Age 50 to 54: Heightened focus on retirement

The average annual contribution for this age group rises to $10,430. This includes employer contributions of $7,264, personal contributions of $2,495, and other contributions of $671.

It is worth noting that at this stage, contributions from employers have started to fall, reflecting changes in employment status and the transition to retirement. On the other hand, individuals are exploring various avenues to boost their superannuation, including salary sacrifice and other voluntary contributions.

Age 55 to 59: Intensive retirement preparation

For this older age group, the average annual contribution significantly increased to $12,803, including employer contributions of $6,897 and personal and other contributions of $5,027 and $879, respectively.

Reduced employer contributions could be due to various factors, such as changes in employment status or reduced working hours as individuals transition towards retirement.

The high total contributions reflect a comprehensive approach to retirement savings, combining employer, personal, and other contributions to build a robust retirement fund.

Are you increasing personal contributions enough?

An increasing number of people are making additional personal contributions to their superannuation through salary sacrifice, showing they understand the importance of saving more for retirement.

As the table below demonstrates, not only are more individuals making personal contributions as they get older, but the average amount of these contributions is also increasing.

Age group	% of people making personal contribution	Average annual personal contribution
40-44	10%	$9,099
45-49	13%	$11,462
50-54	17%	$15,109
55-59	21%	$23,884

The significant increase in personal contributions, especially through salary sacrifice, highlights a proactive approach to retirement savings. For instance, 21% of individuals aged 55-59 are making personal contributions, with an average contribution of $23,884.

While employer contributions form the bulk of superannuation savings, personal contributions are becoming increasingly important. This shift underscores the importance of individual efforts in securing a comfortable retirement.

Foolish takeaway

The average annual super contributions for individuals by age group highlight a growing focus on retirement savings. Many individuals are now taking proactive steps to bolster their superannuation through personal contributions, which tend to grow with age.

The post What is the average annual superannuation contribution for 45, 50, and 55? appeared first on The Motley Fool Australia.

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Motley Fool contributor Kate Lee 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 originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Nvidia (NASDAQ: NVDA) has reached record highs over the last year as it has become the poster child for a boom in the artificial intelligence (AI) market. Since the start of 2023, the chipmaker’s stock has skyrocketed 174%, while quarterly revenue and operating income have climbed 93% and 149%. Wall Street has rallied behind Nvidia as it has achieved a majority market share in AI graphics processing units (GPUs) just as demand for the chips has soared.

Uncertainty about how long Nvidia can keep up its bull run weighed on its stock toward the end of June and the start of July when it fell as low as $118 per share after hitting a high of $135 per share just days before. However, its share price rebounded on July 3, rising 4% as the slump proved temporary.

Meanwhile, the company still has plenty to be bullish about. Nvidia has years of dominance in the chip market under its belt, suggesting its role in AI is unlikely to dissipate any time soon. The chipmaker also has new product launches in the works that will likely continue to boost sales and earnings to retain its lead in the retail chip market.

Here’s why Nvidia stock could help you become a millionaire over the long term.

Nvidia has a long history of success in the chip market

Nvidia initially made a name for itself by carving out a dominating role in video games. The company was one of the first to begin selling chips to the consumer market, with gamers using its GPUs to build high-powered gaming PCs. Nvidia’s success in the industry has seen its desktop GPU market share rise from 65% in 2014 to 88% in the first quarter of 2024.

A lead in gaming chips perfectly positioned the company to gain a dominant role in data-center GPUs and, eventually, AI. In fact, according to IoT Analytics, Nvidia is responsible for more than 90% of the data-center GPU market. Many of these data centers have become crucial to the development of the AI market, powering platforms like Amazon Web Services, Microsoft‘s Azure, and OpenAI’s ChatGPT.

Nvidia has managed to retain its dominance in GPUs in different sectors across tech despite the persistence of companies like Advanced Micro Devices and Intel. For instance, while Nvidia has added more than 20 points to its desktop GPU market share over the last decade, AMD’s has actually fallen from 33% to 12%. Meanwhile, Intel briefly had a 4% share in Q1 2023, which has since dwindled to 0%.

The best is yet to come

We’re only about a year into the recent boom in AI, suggesting developers have barely scratched the surface of what’s possible with the generative technology. As the market progresses, chip demand is only likely to continue rising. Meanwhile, Nvidia is leveraging its lead to steer the industry in its favor and challenge its competitors.

In 2024, Nvidia transitioned to a yearly release schedule for new chips when a two-year cycle was previously the market standard. The shift forced AMD and Intel to follow suit. As a result, Nvidia is gearing up to launch its Blackwell line chips, the company’s next generation of AI training processors. CEO Jensen Huang noted at the announcement, “The Blackwell architecture platform will likely be the most successful product in our history and even in the entire computer history.”

A leading reason for Nvidia’s success is the software platform accompanying its AI chips, which it calls its Compute Unified Device Architecture (CUDA). Developers worldwide have grown accustomed to this ecosystem, with switching akin to how a user of Apple‘s iPhone might feel about switching to a Samsung phone. Consequently, Nvidia’s competitors will likely face an uphill battle trying to gain traction in AI.

Data by YCharts.

Moreover, the data in the table above shows the significant financial lead Nvidia has achieved over its competitors. Since last July, Nvidia’s operating income and free cash flow have skyrocketed far higher than AMD or Intel’s, indicating Nvidia is far more capable of continuing to invest in its business and retain its market dominance.

Despite recent growth, Nvidia’s price/earnings-to-growth (PEG) ratio sits at less than one, indicating its stock remains a value. Alongside nearly unrivaled dominance in the budding AI market, Nivida is a screaming buy this July and a stock that could make you a millionaire with the right investment. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Could Nvidia stock help you become a millionaire? appeared first on The Motley Fool Australia.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Dani Cook 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 Advanced Micro Devices, Amazon, Apple, Microsoft, and Nvidia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Intel and has recommended the following options: long January 2025 $45 calls on Intel, long January 2026 $395 calls on Microsoft, short August 2024 $35 calls on Intel, and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has recommended Advanced Micro Devices, Amazon, Apple, Microsoft, and Nvidia. 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) coal stocks could be set for more outperformance, as a dearth of wind Down Under led to a resurgence in coal-fired power in the June quarter.

While the coal miners are putting in a mixed performance today, they’ve broadly been a tear over the past year.

What kind of a tear?

Well, over the past 12 months, the ASX 200 has gained 11.3%.

Here’s how these ASX 200 coal stocks have performed over this same period (excluding some very juicy dividend payouts):

• New Hope Corp Ltd (ASX: NHC) shares are up 5.4%
• Whitehaven Coal Ltd (ASX: WHC) shares are up 35.5%
• Stanmore Resources Ltd (ASX: SMR) shares are up 59.3%
• Yancoal Australia Ltd (ASX: YAL)* shares are up 54.9%

(*Note: Yancoal is not an ASX 200 coal stock just yet. But with its market cap now at $9.7 billion, compared to $3.5 billion for Stanmore, I expect it will join the benchmark index in an upcoming quarterly rebalance.)

More turbines, less wind power

Despite the construction of more windmills, the June quarter saw a big decline in wind-driven electricity delivered to the Aussie market.

According to UNSW senior research associate Dylan McConnell (courtesy of The Australian Financial Review), wind power generation across the National Electricity Market (NEM) plunged 19.8% over the quarter just past.

But in good news for ASX 200 coal stocks, if not for Australia’s net zero ambitions, coal power went the other way, up 6.5%.

Commenting on the uptick in coal-fired electricity, Global Power Energy’s Geoff Eldridge said:

Coal and gas outputs have generally increased, reflecting a continued reliance on traditional energy sources to maintain grid reliability. Meanwhile, renewable energy sources such as utility wind and utility solar have faced declines due to seasonal challenges.

Independent consultant Matthew Rennie added, “Renewables are neither being built as quickly as we need them to be nor is transmission being constructed as quickly as required.”

What are the experts saying about ASX 200 coal stocks?

With renewable sources lagging in the race to provide reliable baseload power in Australia and much of the developing world continuing to roll out new coal-fired power plants, the demand picture for thermal coal remains solid over the medium term.

ASX 200 coal stocks are also likely to see strong ongoing demand for the higher-quality coking or metallurgical coal they dig from the ground.

In fact, Morgan Stanley lists metallurgical coal as its top commodity pick. According to the AFR, the broker forecasts coking coal prices will hit US$290 per tonne by the end of 2024, up 15% from current levels.

That bullish forecast is based on an expected rebound in demand from India, the world’s most populous nation. However, supply disruptions have also occurred, as several major coal mines — including Anglo American‘s (LSE: AAL) Grosvenor metallurgical coal mine in Queensland — have been shuttered following underground fires.

Morgan Stanley has an overweight rating on Yancoal and Whitehaven shares.

Glenmore Asset Management portfolio manager Robert Gregory is also bullish on the outlook for ASX 200 coal stocks and some of the smaller miners.

According to Gregory:

The really attractive part about all these coal stocks is that even at a reasonably low point in the price cycle, they’re still generating very material profits and paying dividends.

So the set-up is really positive in that when we get a recovery in coal prices, which I think is inevitable at some stage, then they’re poised to produce some very good earnings and hopefully get a re-rating as well.

The post ASX 200 coal stocks in focus as wind power fades to a breeze 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.

With the new financial year underway, Australian investors are wondering whether now is the right time to buy ASX shares.

It was a great year for global stock markets, especially in the technology sector, driven by the race to develop artificial intelligence (AI).

Investors can gain exposure to ASX and international shares through two highly diversified exchange-traded funds (ETFs). The first is the iShares Global 100 ETF (ASX: IOO) for exposure to international stocks, and the second is the Vanguard Australian Shares Index ETF (ASX: VAS).

The question remains: Is now the right time to buy, or should you hold off? Here’s what the experts think.

Lazard’s insights: a compass for investors

Lazard Asset Management’s midyear commentary is a gold mine of investment wisdom.

In what is sound advice, chief strategist Richard Temple recommends investors maintain a long-term perspective when buying ASX shares despite potential short-term volatility.

Specifically, Temple highlights the technology sector’s resilience and growth potential, which are driven by large tailwinds from AI.

However, Temple also cautions that the AI industry’s rapid growth may not be sustained without producing strong returns on investment.

In my view, the tech-AI juggernaut can only be sustained if the customers buying these goods and services realise a return on investment.

Put simply, CEOs and CFOs of large companies will not just continue to pour money into AI investments if there is no evidence that the capital deployment is paying off.

Lazard further suggests that, while the U.S. markets might face limited upside due to high valuation levels, international and Australian markets – where IOO and VAS are significant players â€“ could see more robust growth.

Non-US markets are trading on much less demanding valuation multiples and are likely to benefit from accelerating growth while US growth decelerates. Moreover, non-US companies typically are more exposed to floating-rate debt, which should benefit them disproportionately as the ECB and other non-US central banks ease before the Fed.

Performance highlights of ASX and global shares

After a challenging start, the year turned out to be excellent for purchasing ASX shares. This trend was also observed with their global counterparts, especially in the US.

The performance of the IOO and VAS ETFs highlights this. Below, you can see each’s performance, including a brief explanation of each fund’s advantage. (Keep in mind this is not an endorsement for these ETFs, or to buy any ASX shares in them):

1. iShares Global 100 ETF:
   • Diversification: IOO offers exposure to top global companies, ensuring participation in global growth dynamics beyond the Australian market.
   • Tech-Heavy Portfolio: With significant stakes in technology, IOO could be positioned to benefit from tech sector growth, which is especially pertinent as digital transformation accelerates.
2. Vanguard Australian Shares Index ETF:
   • Broad Exposure: VAS tracks the S&P/ASX 300 Index (ASX: XKO), offering a comprehensive slice of the Australian market.
   • FY24 Performance: VAS reported a solid 7.4% capital growth and a 3.9% distribution return, culminating in a total return of 11.3% for the year, excluding franking credits.

Investing in ETFs like IOO and VAS lets you buy ASX shares in one portfolio. For IOO, the tech-heavy focus is a double-edged sword; rapid growth potential exists, but so does volatility in market downturns.

Meanwhile, VAS provides a stable reflection of the Australian economy, which is valuable for those seeking domestic exposure. However, it’s important to note that the ASX indices are heavily weighted to resources/mining and banking.

Lazard’s final thoughts: buy now or wait?

According to Lazard’s market commentary, investors should brace for continued volatility and recognise long-term growth opportunities.

The emphasis is on staying invested rather than trying to buy ASX shares and time the market, a strategy that aligns with the historical performance of ETFs like IOO and VAS. This also avoids tax issues with rapidly buying and selling ASX shares.

Strategist Temple says that the market’s view is “shifting to lower short-term interest rates and reduced earnings on cash” and that many investors are hesitant to buy riskier assets “at or near record-high market levels”.

My view is that the best approach is to allocate capital away from cash to riskier assets while identifying those “risky” assets that are less correlated to the most expensive parts of the global equity market (e.g., tech and AI leaders) and instead invest in areas of the market that have more unrecognised upside going forward.

Buy ASX shares for the long-term

The decision to buy ASX shares now or later ultimately hinges on your risk tolerance, investment horizon, and financial goals. ETFs like IOO and VAS could offer robust pathways to growth, albeit with inherent market risks.

Regardless, considering a long-term investment approach is key if you’re inclined towards long-term gains. As such, Temple says market timing is less important.

Overall, the lesson of history is that owning equities over time is among the best investment options, but it is important to be fully invested through the cycle and to not try to time the markets. In fact, one recent analysis indicated that over the 20 years from 2003 to 2022, investors who missed the 10 strongest up-days in the US equity market forfeited over half of the total return from the entire investment period.

As always, remember your own personal risk tolerances and consult professional advice when necessary.

The post Should I buy ASX shares now or wait? See what Lazard says 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 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.

CSL Ltd (ASX: CSL) shares could be a great option for growth investors right now.

That’s what one leading broker is saying, describing the biotherapeutics giant as representing “healthy growth at a reasonable price.”

What is the broker saying about CSL shares?

According to a note out of Bell Potter, its analysts believe that the relative underperformance of CSL shares since 2020 has created an attractive buying opportunity for investors.

This is because it believes CSL has now broken through its COVID headwinds and is about to enter a period of strong and sustainable growth. It said:

CSL presents an attractive buying opportunity. CSL has been in a holding pattern since 2020, and for good reason. COVID hit the business with higher collection costs for plasma, depressing margins. We anticipate the start of a margin recovery phase for CSL, driving above-market earnings growth over the next few years.

Despite the above, the broker highlights that its shares are still trading on a lower than normal price to earnings (PE) ratio and at a discount to peers Cochlear Ltd (ASX: COH) and Fisher & Paykel Healthcare (ASX: FPH) on growth-adjusted multiples. Bell Potter explains:

CSL trades at a 12-month forward PE of ~28x, representing a discount to its 10-year average of ~31x and a substantial discount to its 5 year average of ~35x. With consensus expecting mid-teen earnings growth over the next few years, CSL trades on a PEG ratio of 1.7x, which looks attractive vs large cap peers COH and FPH that trade on PEG ratios of 3.7x and 2.5x respectively. Given the company’s proven quality and growth prospects, we believe significant upside remains.

More reasons to be positive

Another reason to be positive according to the broker is CSL’s significant investment in research and development (R&D) each year. It sees scope for its R&D to underpin stronger than expected earnings growth. It adds:

CSL’s annual investment of US$1.3 billion to US$1.4 billion in R&D fuels a robust pipeline of new products, solidifying its position as a market leader in innovation. Successful launches of these products can drive earnings growth, which is not fully reflected in consensus.

Finally, Bell Potter also highlights that the company’s margins could be better than many expect in the near future. It feels this could also force consensus earnings upgrades. The broker adds:

We believe CSL has the potential to improve margins faster than anticipated, suggesting the next few years could be marked by earnings upgrades.

In light of the above, Bell Potter thinks that now is the time to snap up CSL shares for the long term.

The post CSL shares: ‘Healthy growth at a reasonable price’ appeared first on The Motley Fool Australia.

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

As the S&P/ASX 200 Index (ASX: XJO) drifts almost 1% lower over the last month of trade, one ASX 200 stock is separating itself from the pack in FY25.

HMC Capital Ltd (ASX: HMC), an alternative asset manager traditionally known for its holdings in real estate and finance, has announced a strategic acquisition today.

While the announcement isn’t market-sensitive, it builds on the momentum the ASX 200 stock established in FY24. As discussed in my recent analysis, HMC Capital was one of the top-performing Australian real estate investment trusts (REITs) last financial year.

Here’s a closer look at the upcoming transaction’s details.

ASX 200 stock pivoting to energy

HMC announced on Monday it has committed to an investment of up to $50 million over three years into StorEnergy Pty Ltd, a battery storage company.

The move extends the ASX 200 stock’s recent entry into the renewable energy market. Traditionally, the company – which manages more than $12.5 billion of client assets – has expertise in real estate assets. As such, this is quite the leap sideways.

However, as part of its Energy Transition platform, HMC aims to “assemble a 15GW development portfolio across the energy value chain…”

This includes renewable energies such as wind, solar, battery, and bio-fuels, it says.

According to the ASX 200 stock, StorEnergy develops and operates “utility-scale battery energy storage systems (BESS)”.

It currently holds a 1.4GW development portfolio valued at approximately $2 billion. These projects are reportedly near existing grid infrastructure, which HMC thinks could be an advantage.

The investment includes an initial tranche of an unspecified amount, with additional commitments planned over the next three years depending on various milestones.

Following the investment, the ASX 200 stock will own a majority stake in StorEnergy. It is expected to close by early July 2024.

What did management say?

Looking ahead, HMC says it is preparing a campaign to raise a potential $2 billion for its Energy Transition Platform.

Regarding this current investment, HMC’s head of Energy Transition, Angela Karl, expressed optimism about the partnership with StorEnerg. Karl highlighted synergies and the asset’s “potential to be scaled significantly” as part of HMC’s growth plans.

CEO and managing director David Di Pilla highlighted the strategic significance of the investment, noting:

Our investment in StorEnergy represents an exciting step in the establishment of HMC Capital’s Energy Transition platform, something we have both the ambition and capability to develop into the National Champion for Australia’s decarbonisation.

HMC share price snapshot

HMC has started the new year in the green. The ASX 200 stock is up 0.48% at $7.29 at the time of writing and has lifted more than 50% in the past 12 months.

The post Which ASX 200 stock is breaking into battery tech with $50 million? 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 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.

Investors who have owned Macquarie Group Ltd (ASX: MQG) and Commonwealth Bank of Australia (ASX: CBA) shares have enjoyed the benefits of positive long-term investments.

CBA is known as the biggest bank in Australia, and it has an impressive position in the Australian home lending space.

Macquarie’s business has four different segments: asset management, investment banking, commodities and global markets (CGM), and a retail bank providing banking and loans.

But let’s compare the ASX bank shares in three different areas – valuation, dividend yield and potential growth — to find out which is a better buy right now.

Macquarie and CBA share price valuation

The price/earnings (P/E) ratio isn’t everything, but the earnings multiple can tell us if one business is trading more expensively than another within the same sector. Or, the change in a company’s own P/E ratio can tell us if it’s cheaper or more expensive than it used to be.

Using the estimates from the broker UBS, the Macquarie share price is valued at 19x FY25’s estimated earnings and 18x FY26’s estimated earnings.

In comparison, the CBA share price is valued at close to 22x FY25’s estimated earnings and 21x FY26’s estimated earnings.

On the above numbers, Macquarie shares are trading more expensively than CBA shares.

Potential growth

CBA’s operational activities focus largely on lending to households and businesses in Australia and New Zealand. The bank has been pushing to grow its business lending, which was 1.1x the overall Australian system for the three months to March 2024. However, CBA’s home lending was only 0.7x the system.

CBA and many of the domestic ASX bank shares are currently suffering from high levels of competition in the sector. This is impacting net interest margin (NIM) and limiting growth. CBA’s quarterly cash net profit was down 5% year over year to around $2.4 billion.

In contrast, Macquarie is growing its market share and challenging the major players. I’ll also point out that Macquarie makes a significant amount of its earnings internationally. The company has the option to allocate attention and capital to whichever market it thinks it can make the best returns from.

Macquarie has also been looking to tap into areas like renewable energy, which is a big area of potential investment in the coming years as the world looks to decarbonise.

According to UBS, Macquarie’s earnings per share (EPS) are expected to grow by 33% between FY25 and FY28. However, CBA’s EPS is only expected to grow by 4% between FY25 and FY28.

I think Macquarie shares offer much more earnings growth potential, so I’d buy shares of the investment bank over CBA shares.

Dividend yield

Capital growth could account for the majority of future returns for both businesses, but the dividend return is also an important part of the picture.

According to the independent forecasts on Commsec, owners of CBA shares are expected to receive a fully franked dividend yield of just under 3.6% in FY25 and just over 3.6% in FY26.

Owners of Macquarie shares are projected to receive a partially franked dividend yield of 3.4% in FY25 and 3.7% in FY26. Macquarie’s projected superior earnings growth could lead to a better dividend yield.

The post Are Macquarie or CBA shares a better buy? appeared first on The Motley Fool Australia.

More reading

• Forget CBA and buy these ASX dividend stocks
• ASX 200 bank shares ‘don’t appear overly expensive’ compared to global peers: UBS
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• Would Warren Buffett buy CBA shares today?
• Why did CBA shares jump 27% in FY24?

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended 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.

The BHP Group Ltd (ASX: BHP) share price is sliding today.

Shares in the S&P/ASX 200 Index (ASX: XJO) mining giant closed Friday trading for $44.39. In late morning trade on Monday, shares are changing hands for $43.82 apiece, down 1.3%.

That sees the big Aussie miner trailing the benchmark, with the ASX 200 down a lesser 0.4% at this same time.

It’s not just the BHP share price that’s underperforming though. Fortescue Metals Group Ltd (ASX: FMG) shares are down 1.9%, while Rio Tinto Ltd (ASX: RIO) shares are down 1.5% at this same time.

Here’s why the ASX 200 miners are battling headwinds today.

Why is the BHP share price underperforming on Monday?

Most of the selling pressure impacting BHP, Rio Tinto, and Fortescue today appears to be due to the 3% decline in the iron ore price over the weekend. After defying bearish expectations and climbing for most of the first week of July, the iron ore price dipped back to just over US$110 per tonne.

The reason once more looks to be driven by concerns that China’s sluggish, steel-hungry property markets have yet to regain any solid growth traction. Coupled with news of growing iron ore stockpiles at China’s largest ports, iron ore traders have been favouring their sell buttons.

With iron ore counting as BHP’s biggest revenue earner, the BHP share price is joining in that sell-down today.

Indeed, over the half-year to 31 December, the miner reported earnings before interest, taxes, depreciation and amortisation (EBITDA) of US$9.7 billion from its iron ore division alone.

In its half-year report, released on 20 February, BHP estimated it will produce between 254 million and 264.5 million tonnes of iron ore in FY 2024.

So any pull back in demand from China, the world’s biggest consumer of iron ore, is going to have an impact on the BHP share price.

The miner addressed its own cautious outlook for Chinese iron ore and other commodity demand earlier this year, stating:

The Chinese economy has been volatile since the zero-COVID policy was eased in December 2022…

Throughout the year authorities have acknowledged that additional policies will be needed to support China’s economic recovery. For the balance of FY24 and into FY25, the key question remains how effective the policy push will be. Until we see greater coherence between the policies and their effective implementation, our outlook will remain cautious and conditional.

With today’s intraday moves factored in, the BHP share price is down 13% in 2024 but remains up 3% over 12 months.

The post Why is the BHP share price starting the week with a whimper? 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.

Encounter Resources Ltd (ASX: ENR) shares are catching the eye of investors on Monday.

At one stage, the ASX mining share was up as much as 26% to a new high of 92 cents.

The niobium explorer’s shares have eased back a touch since then but remain up 16% to 85 cents at the time of writing.

Why is this ASX mining share surging?

The catalyst for today’s gain has been the release of drilling results from the Aileron project in Western Australia.

According to the release, aircore drilling has intersected further shallow, high-grade mineralisation at the West Arunta-based project.

At the Crean target, continuous near-surface carbonatite was intersected across the four aircore drill lines completed to the west of previous drilling. Previously reported assay results from the most western aircore drill line returned shallow high-grade niobium mineralisation.

Management notes that mineralisation at Crean is strongest on the two western sections. Pleasingly, it remains open to the west. As a result, the aircore drill rig has now returned to Crean to complete 200m spaced drill lines to extend this high-grade, near surface mineralisation further to the west.

Over at the Emily target, as a reminder, fifteen widely spaced reverse circulation holes were completed by the ASX mining share late last year. Emily is centred on a magnetic low on the Endurance Fault, which is northwest of the world class Luni discovery owned by WA1 Resources Ltd (ASX: WA1).

Management advised that 10 of the 15 reconnaissance holes intersected carbonatite. The carbonatite at Emily is variably anomalous in niobium and rare earth elements (REE) with shallow, high-grade niobium-REE intersected in two adjacent holes 400m apart.

Its latest aircore drilling tested the north-south extent mineralisation intersected previously. The good news is the first assays received from Emily returned shallow, high-grade niobium-REE mineralisation north and south of there. Additional aircore drilling at Emily will be completed in July/August to establish strike extent of the high-grade mineralisation identified.

The ASX mining share’s executive chairman, Will Robinson, commented:

Aircore drilling is defining new belts of shallow niobium-REE carbonatite hosted mineralisation in the West Arunta. Highly enriched, near surface mineralisation has now been intersected at both the Crean and Emily targets which are located on separate structures at Aileron, over 10km apart. The aircore rig is currently completing further drill sections at the western end of Crean and will then return to Emily and Green.

The post This ASX mining share is surging 26% on ‘high-grade’ drilling results 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 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.

AMP Ltd (ASX: AMP) shares have not performed well compared to the S&P/ASX 200 Index (ASX: XJO). In the 12 months to 30 June 2024, AMP shares fell by 2.6%, as shown on the chart below, while the ASX 200 rose by 7.8%. Therefore, the ASX financial share underperformed by over 10%.

Of course, it’s important to note that AMP’s financial year follows the calendar year, so while the Australian 2024 tax year is over, AMP still has another six months of its FY24 to go.

AMP has been facing headwinds in recent times from banking competition and a shifting environment in the financial advice space. Analysts are not expecting a spectacular recovery for the company, but have suggested it could see profit slowly climb.

Before considering the outlook for the next 12 months or so, let’s review the latest financial updates from AMP.

Earnings recap

In the FY23 result, which was released in February 2024, AMP said its underlying net profit after tax (NPAT) grew by 6.5% to $196 million. It also paid a 2023 final dividend per share of 2 cents.

AMP Bank said its underlying NPAT was $93 million, down from $103 million in FY22. The decline was due to a weaker net interest margin (NIM) compression and growth moderation. Its platforms’ underlying NPAT of $90 million was higher than FY22’s $65 million. The advice underlying net loss was $47 million, an improvement of 30.9%.

In mid-April, the business revealed its quarterly update for the three months to March 2024.

It said AMP Bank’s total loan book was $23.5 billion at March 2024, down from $24.4 billion in the fourth quarter of 2023. AMP Bank total deposits grew to $21.4 billion, up from $21.3 billion in the 2024 fourth quarter.

Platforms net cash flows were $201 million, up 32% year over year. North inflows from independent financial advisers (IFAs) increased 22% year over year to $544 million. Platforms assets under management (AUM) increased to $74.3 billion, up from $71.1 billion in the fourth quarter of 2023.

AMP also said its superannuation and investments AUM increased to $54.1 billion, up from $51.9 billion in the fourth quarter of 2023, with net cash outflows reducing to $371 million (down from $610 million of net cash outflows in the first quarter of 2023).

Finally, New Zealand wealth management net cash outflows were $5 million, while AUM increased to $11.2 billion.

Outlook for FY24 and FY25 for AMP shares

At the time of the 2024 first quarter update, AMP Chief Executive Alexis George said:

We are navigating the headwinds faced by AMP Bank by carefully managing our loan and deposit books, to help address margin pressures. We are making good progress on the development of our digital small business and consumer bank offer, launching in Q1 25, to lessen funding risks over the medium term by broadening the customer base and introducing a compelling transaction account offer that will help diversify and build deposits.

Our wealth management businesses, Platforms, Superannuation & Investments and New Zealand, benefited from the positive investment markets, while in Australia pension payments increased as we continue to see the impact of the lifting of minimum drawdown limits that came into effect in July 2023.

In terms of projections, UBS forecasts AMP to make a net profit of $220 million in FY24 and pay a dividend per share of 5 cents.

The broker predicts AMP’s net profit can rise by 15% to $253 million in FY25. According to UBS, AMP shareholders are forecast to receive a dividend per share of 7 cents in FY25.

UBS calls AMP shares a sell, with a price target of 98 cents.

The post Is the FY25 outlook compelling for AMP shares? appeared first on The Motley Fool Australia.

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