Category: Stock Market

ASX dividend shares with large dividend yields could be particularly appealing right now due to the RBA’s multiple rate cuts this year.

Returns on cash in the bank have been significantly reduced, so businesses that can offer a yield that’s significantly above what term deposits can provide look particularly appealing.

Both of the businesses I’ll highlight have provided guidance for sizable payouts in the year ahead. Let’s get into them.

Charter Hall Long WALE REIT (ASX: CLW)

The real estate investment trust (REIT) sector can be a good opportunity to find higher-yielding stocks, particularly if they’re trading at a sizeable discount to their underlying net asset value (NAV) – the NAV tells investors how much each share/unit is worth after taking into account all of the property values, the loans, and so on.

The Charter Hall Long WALE REIT has a diversified property portfolio spread across a variety of subsectors, including hotels and pubs, service stations, telecommunication exchanges, data centres, distribution centres, buildings leased to a government entity (such as GeoScience Australia), and more.

I like the diversification it offers, as well as the long-term rental contracts, giving the business significant income security and visibility. It has a weighted average lease expiry (WALE) of around nine years.

In terms of the valuation, its NAV was $4.59 at 30 June 2025, so it’s trading at a discount of around 10% to this.

The ASX dividend share expects to increase its annual payout to 25.5 cents per share in FY26. At the time of writing, that translates into a possible distribution yield of 6.2%.

Centuria Office REIT (ASX: COF)

The office sector of the commercial property world has been through a challenging time due to the significant shift to working from home over the last six years, although some of that change has since unwound.

This dynamic has created a headwind for demand for office space, occupancy, and rental income. I believe the Centuria Office REIT could be undervalued, considering it’s still generating solid rental profits and paying a large distribution.

Management of the business is optimistic about the medium term because of the expectation that higher replacement costs (to build new offices) and office withdrawals for alternate-use will “drastically reduce future supply and reduce the overall market size”.

Centuria Office REIT says these rivers are leading to a rebalancing of office markets and future vacancy rates in many markets where its assets are situated, though there are near-term headwinds.  

The company continues to sign new and renewed leases, helping its occupancy be above 91% as of 30 September 2025 with a WALE of around four years.

It had a NAV of $1.67 at 30 June 2025 – at the time of writing, it was trading at a discount of around 30% to its stated underlying value.

The ASX dividend share expects to pay a distribution of 10.1 cents per unit in FY26. At the time of writing, that translates into a forward distribution yield of 8.5%.

The post 2 ASX dividend shares with yields above 6% 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.

The team at Bell Potter released two reports yesterday, one on ASX All Ords stock Southern Cross Electrical Engineering Ltd (ASX: SXE) and another on Imdex Ltd (ASX: IMD). 

These two companies have risen by more than 40% year to date. 

However, Bell Potter has a hold recommendation on both, and has just reduced its target price following key announcements from both companies.

Here’s what the broker had to say. 

Southern Cross Electrical Engineering

Southern Cross Electrical Engineering is an electrical, instrumentation, communication and maintenance services company.

The ASX All Ords stock is up more than 55% in 2025. 

However yesterday, the company announced it was unsuccessful in its arbitration proceedings claiming against the CPB Dragados Samsung Joint Venture (“CDSJV”). 

What was the arbitration?

The company’s subsidiary Heyday lost its arbitration against the CPB Dragados Samsung Joint Venture relating to claims for additional costs on the WestConnex M5 tunnel project in Sydney. 

The case hinged on strict time-bar clauses, which required claims to be lodged within specific deadlines. Despite substantial scope and schedule changes on the project, Heyday’s remaining claims for about $22m were rejected.

In a report out of Bell Potter yesterday, the broker downgraded this ASX All Ords stock to a hold (previously buy). 

Although the broker did note it does not view the unfavourable arbitration update as a reflection of the company’s current approach to project execution, given an outstanding track-record of project delivery since the dispute occurred and the likely internal response to improve risk management.

We caveat the Hold thesis with our ongoing positive view of the underlying business given the company’s strong orderbook and tender pipeline and favourable structural drivers.

The broker also downgraded its target price to $2.35. 

It appears Bell Potter now sees the stock as fairly valued, as it closed yesterday at $2.39 each. 

Imdex

The company is an Australian mining equipment and technology company operating globally.

Its technology includes drilling optimisation products, cloud-connected rock knowledge sensors, and data and analytics to improve the process of identifying and extracting mineral resources.

Its share price has risen more than 40% since the start of the year.

The company recently announced its acquisition of Advanced Logic Technology S.A. and its subsidiary Mount Sopris Instruments Inc. 

These companies specialise in borehole geophysical imaging solutions, imaging probes and accompanying visualisation and data processing software.

Bell Potter believes the acquisitions strengthen IMD’s earth science and digital analytics capabilities, but value creation depends heavily on achieving meaningful revenue growth from the acquired assets.

Value accretion from the ALT and MSI acquisitions is dependent on meaningful incremental revenue generation over the three year period post deal completion.

The broker has lowered its price target to $3.60 (previously $3.90) and maintained its hold recommendation on this ASX All Ords stock. 

From yesterday’s closing price of $3.40, this indicates an upside of 5.88%. 

The post Why did Bell Potter just lower its view on these two ASX All Ords stocks? appeared first on The Motley Fool Australia.

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• 5 things to watch on the ASX 200 on Tuesday

Motley Fool contributor Aaron Bell 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 Imdex. The Motley Fool Australia has recommended Southern Cross Electrical Engineering. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

On Monday, the S&P/ASX 200 Index (ASX: XJO) started the week with a disappointing decline. The benchmark index fell 0.6% to 8,565.2 points.

Will the market be able to bounce back from this on Tuesday? Here are five things to watch:

ASX 200 expected to rise

The Australian share market looks set to rise on Tuesday despite a poor start to the week on Wall Street. According to the latest SPI futures, the ASX 200 is poised to open the day 23 points or 0.25% higher. In late trade in the United States, the Dow Jones is down 0.65%, the S&P 500 is 0.4% lower, and the Nasdaq has fallen 0.3%.

Oil prices charge higher

It could be a good session for ASX 200 energy shares Karoon Energy Ltd (ASX: KAR) and Santos Ltd (ASX: STO) after oil prices charged higher overnight. According to Bloomberg, the WTI crude oil price is up 1.35% to US$59.33 a barrel and the Brent crude oil price is up 1.3% to US$63.20 a barrel. This was driven by supply concerns following an attack on a Black Sea terminal.

Collins Foods half year results

Collins Foods Ltd (ASX: CKF) shares will be on watch today when the quick service restaurant operator releases its half year results. A strong result is expected from the KFC operator, with management guiding to “year-on-year FY26 Group underlying NPAT (post AASB 16) growth in the low to mid-teens” on a percentage basis. KFC Australia same store sales are expected to increase 2.1% during the first half.

Hold Imdex shares

Imdex Ltd (ASX: IMD) shares are a fairly valued according to analysts at Bell Potter. This morning, the broker has retained its hold rating on the mining product technology solutions provider’s shares with a trimmed price target of $3.60 (from $3.80). It said: “Our Target Price is lowered to $3.60/sh after applying a higher WACC 8.7% (previously 7.8%). Value accretion from the ALT and MSI acquisitions is dependent on meaningful incremental revenue generation over the three year period post deal completion. For example, achieving 25% of the incremental revenue share earn-out cap (our base case) should deliver an implied acquisition multiple of 7.1x (EV / FY28 EBITDA), less than IMD’s 9.6x (in FY28). Implied upfront valuation multiple is closer to 20.6x FY26 EBITDA.”

Gold price rises

ASX 200 gold shares Evolution Mining Ltd (ASX: EVN) and Ramelius Resources Ltd (ASX: RMS) could have a decent session on Tuesday after the gold price pushed higher overnight. According to CNBC, the gold futures price is up 0.4% to US$4,271.5 an ounce. Gold hit a six-week high on increased US rate cut bets.

The post 5 things to watch on the ASX 200 on Tuesday appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Collins Foods. 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 Imdex. The Motley Fool Australia has recommended Collins Foods. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

If you are on the lookout for some new portfolio additions in December, then read on!

That’s because analysts have just given their verdict on three popular ASX shares, courtesy of The Bull. Here’s what they are saying about these shares:

Aristocrat Leisure Ltd (ASX: ALL)

The team at Medallion Financial Group is positive on this gaming technology company and has named it as a buy.

It highlights that its share buyback program signals management confidence in value creation. It said:

Aristocrat remains a high quality global gaming leader with strong intellectual property, dominant market share in North American gaming operations and a large base of recurring digital revenue supporting its long term resilience. Its $750 million share buy-back program adds support to earnings and signals management confidence in value creation. The company generated revenue growth of 11 per cent in full year 2025 when compared to the prior corresponding period. Net profit after tax was up 9.4 per cent.

Commonwealth Bank of Australia (ASX: CBA)

As with almost every broker, Medallion isn’t recommending investors buy Australia’s largest bank. It has named CBA as an ASX share to sell.

Although it acknowledges its quality, it feels that its shares are expensive at 25 times earnings and with a below average dividend yield. It said:

While the CBA remains a solid business over the long term, the share price looks expensive at current levels. Recently trading on a price/earnings ratio of about 25 times and a modest dividend yield of about 3.15 per cent, its valuation sits well above global peers.

Also, the company recently suffered its worst sell-off in four years following the release of first quarter results in fiscal year 2026, which flagged higher operating costs, a weaker net interest margin (NIM) and a lower-than-expected common equity tier 1 capital ratio of 11.8 per cent, which is still above the Australia Prudential Regulation Authority minimum of 10.25 per cent.

Life360 Inc. (ASX: 360)

Finally, Medallion is a fan of this location technology company. However, it isn’t enough to rate Life360 shares as a buy just yet.

It has named it as a hold but also recommends investors accumulate this quality growth stock while they are down. It said:

Life360 is the leading family safety and location sharing platform across the US, UK and Australia. It operates a capital-light, highly scalable subscription model with growing ad partnerships. Despite recent share price weakness tied to investor concerns about its $US120 million acquisition of Nativo amid a rotation out of technology stocks into defensive companies, the business fundamentals of Life360 remain strong.

Revenue is growing at an impressive pace, subscriber numbers continue to accelerate and management has upgraded full year guidance. We view current share price levels as an attractive opportunity to at least hold or accumulate a quality growth business with a long runway ahead.

The post Buy, hold, sell: Aristocrat, CBA, and Life360 shares appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Life360. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Life360. The Motley Fool Australia has positions in and has recommended Life360. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

There’s a certain group of ASX dividend stocks that I’d be willing to buy in any market environment, whether the economy is booming or challenging.

A resilient business can continue growing its operating earnings, and a defensive ASX dividend stock is capable of continuing to deliver passive income to investors.

I’d be very happy to buy Rural Funds Group (ASX: RFF) shares right now and virtually any time.

Pleasing yield

Most income investors are probably looking for a strong dividend yield, so let’s take a look at how big the passive income could be in FY26.

Rural Funds owns a portfolio of farmland across Australia, which generates an attractive level of rental income. The business is able to use the rental profits to pay distributions to investors every quarter.

The business expects to pay a distribution of 11.73 cents per unit in the 2026 financial year. This translates into a forward distribution yield of approximately 6%, at the time of writing.

While that’s not the biggest yield on the ASX, it’s more than a term deposit, and there’s potential growth of payouts in the future.

Rising operating earnings for the ASX dividend stock

The leases that ASX dividend stocks have signed with tenants have rental growth built in, with those increases either linked to inflation or fixed annual rises.

While that rental growth is not rapid, it provides investors with positive tailwinds for rental earnings to grow.

Rural Funds is also able to put money towards increasing the rental potential of its land, whether that’s through improving the productivity of the land or changing the type of agriculture produced on that land (such as the Maryborough and Riverton farms being used for macadamia plantings).

With a weighted average lease expiry (WALE) of 13.9 years, the business has rental income locked in for the long term.

It’s expecting to grow its adjusted funds from operations (AFFO) – the net rental profit – by another 1.7% in FY26, and I’m expecting that growth rate to increase in the coming years as the ASX dividend stock’s investments are completed.  

Large NAV discount

I think it’s appealing to buy an asset-focused business like a real estate investment trust (REIT) when it’s trading at a cheaper price compared to its underlying value.

Every six months, Rural Funds tells the market what its adjusted net asset value (NAV) is. It’s adjusted to take into account the market value of the water rights that it owns.

At 30 June 2025, the business reported an adjusted NAV of $3.08. At the time of writing, it’s trading at a discount of 36%, which I think is very appealing and makes today a good time to buy.

The post I’d buy this ASX dividend stock in any market appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in Rural Funds 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 positions in and has recommended Rural Funds Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

It has been a lucrative period to have been invested in the stock market over the past three years. Both the ASX and the American markets have delivered bumper returns since late 2022. ASX exchange-traded funds (ETFs) that track these indexes prove it.

To illustrate, the iShares Core S&P/ASX 200 ETF (ASX: IOZ), a simple ASX 200 index fund, has returned 12.97% per annum since 31 October 2022.

The US markets have done far better, though. The iShares S&P 500 ETF (ASX: IVV) has returned an average of 21.4% over that same timespan. That’s exceptional, given that this index’s long-term average is about 7.5% per annum.

However, there is one ASX ETF that has put these funds to shame.

It is known as the Global X FANG+ ETF (ASX: FANG).

Over the three years to 31 October, this ASX ETF has delivered not a 20% or 30% return per annum. Not even 40%.

Its average rate of return has been an astounding 54.24% per annum. This astronomical rate of return would have been enough to turn $10,000 into roughly $36,700 over that three-year span.

So how has this high-flying ASX ETF done it?

FAANGing to the top

Well, FANG is a fund that only holds ten stocks within it. By contrast, the ASX 200 ETF holds, well 200, and the S&P 500 fund, 500.

Those ten stocks are special, though. As you can probably gather from the name, they include all five members of the old ‘FAANG’ club – Facebook (now Meta Platforms), Apple, Amazon, Netflix and Google (now Alphabet).

In addition to these five stocks, FANG also holds Broadcom, CrowdStrike, NVIDIA Corp, ServiceNow and Microsoft.

Microsoft and NVIDIA are members of the ‘Magnificent 7’ club that FAANG has morphed into. Meanwhile, Broadcom is a chipmaker and software stock. ServiceNow operates in the cloud-based business software space, and Crowdstrike is a leader in cybersecurity.

As you can imagine, all of these companies have enjoyed a phenomenal few years, thanks to the boom in interest in AI-related companies.

To illustrate, Broadcom stock is up approximately 645% since early December 2022. Some other notable winners include Crowdstrike (up 311%), Meta Platforms (up 425%) and, of course, NVIDIA (up a massive 948.5%).

Given that all ten of these FANG stocks have been unbridled winners, it’s no surprise to see the ETF deliver such breathtaking gains.

So is this ASX ETF a screaming buy?

Well, that’s the trillion-dollar question. There’s no doubt that FANG’s ten holdings are some of the best and most profitable companies in the world, and many will probably continue to be for years to come. However, that doesn’t mean this ETF will continue to grow at 50%-plus every year going forward. A majority of its holdings are now worth more than US$1 trillion, and in many cases, far higher than that. There comes a point when companies simply cannot sustain growth rates due to sheer size.

This ETF is also heavily exposed to the US tech sector. It is highly concentrated and may be punished if the now-positive sentiment turns against tech shares.

It is difficult to judge what kind of future this ASX ETF holds in store for its investors. I would be surprised if it continues to see anything close to its recent blazing performance in the years ahead. But then again, it’s not hard to make the case that it represents a stake in some of the world’s top businesses. Investors should keep in mind that FANG represents a very narrow bet on a narrow range of companies, and judge the risks and potential rewards for themselves.

The post Screaming buy? This ASX ETF has returned 54% a year since 2022 appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has positions in Alphabet, Amazon, Apple, Meta Platforms, Microsoft, and Netflix. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Amazon, Apple, CrowdStrike, Meta Platforms, Microsoft, Netflix, Nvidia, ServiceNow, and iShares S&P 500 ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Broadcom 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 recommended Alphabet, Amazon, Apple, CrowdStrike, Meta Platforms, Microsoft, Netflix, Nvidia, ServiceNow, 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.

A recent report from VanEck Australia suggests that after two down years for healthcare stocks, emerging tailwinds could spark a rebound. 

The report said healthcare stocks have lagged over this period, mostly due to potential US policy effects on the growth rates for biopharma, healthcare plans, and medical technology firms.

The tide is turning

According to VanEck, over the past two years, healthcare stocks underperformed relative to the broader market. 

This is despite catalysts such as innovation and progress in weight-loss drugs.

However, the ASX ETF provider said the tide could now be turning. 

Recently, there has been some clarity on healthcare policies, increased M&A activity, as well as interest from investors who are rotating back into defensive growth and quality earnings due to the volatile macro environment.

Additionally, recent earnings season results from Q3 in the US shows over 80% of reported healthcare companies have “surprised to the upside”, and price reactions post earnings have also been positive. 

Looking ahead, the long-term structural growth drivers, including ageing populations, chronic disease management, med-tech adoption, and digital health, remain present.

Emerging tailwinds 

VanEck pointed towards changing policy in the US as one emerging factor set to benefit the sector. 

It said there has been renewed clarity on US drug pricing policy following the Pfizer–Trump administration agreement. 

The agreement included exchanging Medicaid cost cuts for tariff relief. 

The ETF provider said this has lowered market fears of sweeping “most-favoured-nation” (MFN) mandates that would have pressured pricing across the sector. 

Pfizer, Merck, and Johnson & Johnson all experienced price rises after the announcement due to improved sentiment toward the sector.

VanEck believes the sector is now trading at a relative value to the broader market. 

With macro uncertainty at the forefront of investors’ minds, many are rotating toward defensive growth, benefiting healthcare broadly and many investors are targeting those companies with quality characteristics and/or wide moats.

How to target global healthcare stocks

Healthcare stocks are relatively underexposed on the ASX compared to sectors like financial (Big four banks) and materials (mining giants). 

This means Aussie investors are often looking overseas to tap into healthcare markets.

The team at VanEck believes long-term structural trends supporting the sector could make it an ideal time to gain exposure to international healthcare stocks, including: 

• The combination of global population growth and ageing demographics.
• Increasing prevalence of chronic diseases, which will continue to drive up the demand for healthcare.
• Increasing expenditures in emerging economies that need to close the gap to match the levels of spending in developed economies, as their growing and increasingly wealthy populations will demand it.

For investors looking for diversification into global healthcare stocks, there are several ASX ETFs offering focussed exposure to this sector. 

Investors may consider: 

• Vaneck Vectors Global Health Leaders ETF (ASX: HLTH) – Gives investors exposure to a diversified portfolio of the largest international companies from the global healthcare sector.
• iShares Global Healthcare ETF (ASX: IXJ) – Made up of more than 100 global equities in the healthcare sector.
• BetaShares Global Healthcare ETF – Currency Hedged (ASX: DRUG) – Aims to track the performance of the largest global healthcare companies (excluding Australia). 

Another option for investors looking for overweight to the sector, with a broader fund, could consider Vaneck Vectors Morningstar World Ex Australia Wide Moat ETF (ASX: GOAT).

It has a 25.7% allocation to the healthcare sector within a portfolio of attractively priced international ‘wide moat’ companies with sustainable competitive advantages.

The post Is there a turnaround coming for healthcare stocks? appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Bell 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.

I’m a big believer that investing in ASX shares can make a world of difference in someone’s long-term personal finances and wealth overall.

Investing in the right companies could make a world of difference to how much our portfolio is worth in five or ten years from now.

The three ASX shares I’ll highlight are exciting opportunities, in my view, and I’m optimistic of significant returns in the coming years.

Nexgen Energy (Canada) CDI (ASX: NXG)

Energy could be one of the challenging areas for the world to contend with in the coming decade, as coal power generation reduces, but energy demand increases because of data centres and AI.

Nuclear energy could be the answer for a number of countries, particularly places like the US, as well as certain European and Asian countries.

Nexgen owns a project in Canada where it’s developing the Arrow deposit, which is expected to become one of the world’s largest and lowest-costing uranium projects.

In the coming years, I think there’s a fair chance uranium prices will increase as energy demand rises. Even at today’s prices, the ASX share could make significant cash flow once the project is operational and justify a higher Nexgen share price.

VanEck MSCI International Quality ETF (ASX: QUAL)

I believe that the best businesses are likely to deliver the strongest returns over the long term because of their ability to compound earnings, leading to compounding shareholder returns.

There are a variety of ways to judge whether a business is high quality or not. The QUAL ETF aims to invest in 300 of the best companies in the world.

The fund looks for three factors to decide if a business has world-leading quality: a high return on equity (ROE), stable (and growing) earnings, and low debt levels.

Thanks to that combination of elements, the QUAL ETF has returned an average of 16.5% per year over the last five years. While past performance is not a guarantee of future returns, a similar sort of return over the next five years could double an investor’s money.

With the holdings from a variety of countries and sectors, I think it ticks the diversification box effectively.

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

This ASX share is one of the leading options for a combination of dividends and capital growth, in my opinion.

It owns a portfolio of assets, with both listed and unlisted businesses, including telecommunications, resources, swimming schools, agriculture, credit, industrial property, building products, and plenty of other areas.

The company’s existing portfolio can achieve growth over time as those businesses deliver on their plans. Soul Patts regularly makes additional investments with its portfolio, adding further growth for the company.

Its portfolio of assets generates an impressive level of cash flow each year, which enables the company to reward investors with a growing dividend, using a majority of the funds, and reinvest the remainder in additional opportunities.

A combination of a growing portfolio and rising dividends (from the cash flow) is a winning combination and could help our wealth building and annual cash flow. That’s exactly how I’m using my Soul Patts holding.

The post Buying these 3 ASX shares could change your life appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in VanEck Msci International Quality ETF and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This ASX 200 stock has taken a beating recently. The share price of SEEK Ltd (ASX: SEK) tumbled with 11.8% in the past month to $24.14 at the time of writing.

Over the past year, this ASX communications share has fallen 7.7%, underperforming the S&P/ASX 200 Index (ASX: XJO) which has risen 1.4% over the same period.

SEEK’s drop raises a timely question. Does the weakness offer a buying opportunity or is it a warning for investors?

Pricing power

SEEK remains a leading online employment marketplace across Australia, New Zealand and parts of Asia. That position gives the company scale advantages and pricing power. Beyond job ads and talent-search databases, SEEK invests in education, career development and employment-related technology to broaden its growth opportunities.

There are a few clear reasons behind the recent slump of this popular ASX 200 stock. In FY 2024, SEEK’s earnings declined due to reduced ad volumes and a major write-down of its China-based investment. The combination of poor macroeconomic conditions, the decreased hiring demand and lingering fallout from prior expansion missteps seem to have spooked investors.

In its core markets Australia and New Zealand, the ASX share recently reported a 14% drop in job advertisements, leading the revenue in this region to drop 4% year-on-year.

Recent slump as a turning point?

However, not all the commentary is negative. Several brokers and fund managers argue the recent weakness could mark a turning point. They believe SEEK still dominates employment classifieds in its core markets, retains pricing power and seems to have tightened cost control.

Some analysts view the recent slump as more cyclical than structural. Other market-watchers highlight SEEK’s improved structural profitability of this ASX stock. Its return on equity (ROE) is modest – around 9% – but stable. The underlying free cash flow also remains intact, which could reward long-term investors.

During a recent AGM-presentation the board of the ASX 200 stock told investors that, despite the economic uncertainty, it remains confident in the resilience of its core businesses. The group continues to diversify its revenue streams, especially in high-growth regions across the Asia-Pacific region.

What’s next for the ASX stock?

Analyst consensus remains positive with most brokers recommending SEEK as a (strong) buy. The average 12-month price target is $30.35, with a range roughly between $22.60 and $33.50.

Macquarie Group Ltd (ASX: MQG) is more bullish on the ASX 200 stock than most other brokers. Analysts of the top broker recently rated the communications share a ‘buy’ and they expect its fundamentals to improve.

Macquarie has set a price target of $32.50, which suggests a potential 34% increase over the next 12 months.

The post Down 12% past month, is it time to buy this popular ASX 200 stock? appeared first on The Motley Fool Australia.

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Motley Fool contributor Marc Van Dinther 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.

I’m trying to fill my portfolio with ASX shares that are going to be worth more in the coming years. That’s a big part of the allure of owning businesses – they can go up in value over time.

I own a range of investments, some of which deliver sizeable passive income each year. The two recent buys I want to tell you about definitely fit into the ASX growth share category, though they do also pay a small dividend yield.

While they’re not significant positions in my portfolio (yet), I’m planning to invest more in the coming months, particularly if the software ASX share stays at the current valuation (or becomes even cheaper).

VanEck Morningstar Wide Moat ETF (ASX: MOAT)

This has been one of my preferred exchange-traded funds (ETFs) for a long time, and now I’ve finally started a position.

It typically owns a portfolio of around 50 names from the US share market, which are viewed by Morningstar analysts as businesses with long-term economic moats.

An economic moat describes the competitive advantages a business possesses, which can take various forms, such as brand power, intellectual property, cost advantages, switching costs, or network effects.

The MOAT ETF only invests in these businesses when it seems like their economic moat is more likely than not to last at least 20 years. This means investors can invest in the fund for the long term with confidence.

On top of that, the fund only invests in these competitively advantaged businesses if they believe the target company is trading at a good value.

The investment strategy has led to the fund returning an average of more than 15% per year over the last decade. Past performance is not a guarantee of future returns, of course, but I believe the MOAT ETF can continue to perform strongly in the coming years.

TechnologyOne Ltd (ASX: TNE)

I have admired TechnologyOne for a long time and slightly regret not investing in the ASX share sooner. However, I took the opportunity to buy after its fall in November.

The enterprise resource planning (ERP) software business continues to demonstrate attractive aspects.

Its core business continues to grow strongly, with a net revenue retention (NRR) rate of 115% in FY25. That means the business made 15% more revenue from its existing client base than the prior year. Growing at 15% per year means revenue doubles in just five years.

The ASX share invests around a quarter of its revenue into research and development to help justify subscribers such as local councils, universities, and companies paying more for (improved) software.

The NRR growth, plus ongoing customer wins, means its annual recurring revenue (ARR) is rising quickly. It has a goal to reach $1 billion of ARR by FY30, with the UK playing an important role in its growth plans. In FY25, UK ARR surged 49% with strong growth in both the local government and higher education segments.

TechnologyOne is also expecting its profit before tax (PBT) margin to increase in the coming years, thanks to its operating leverage, which I believe will enhance its bottom line and drive the TechnologyOne share price upward at a pleasing pace in the years ahead.

The post These are my latest 2 ASX share buys and I’m planning to buy more appeared first on The Motley Fool Australia.

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• ASX 200 tech shares fight back after 10 weeks of decline

Motley Fool contributor Tristan Harrison has positions in Technology One and VanEck Morningstar Wide Moat ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Technology One. The Motley Fool Australia has recommended Technology One and VanEck Morningstar Wide Moat ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.