Category: Stock Market

Buying ASX shares and worried about the potential market impacts of rising inflation?

You’re not alone.

On Wednesday, investors were greeted with some unwelcome news from the Australian Bureau of Statistics (ABS).

Specifically, the ABS revealed that for the 12 months to October, the consumer price index (CPI) was up by 3.8%, rising from the 3.6% 12-month inflation print in September. And trimmed mean inflation, the measure most relied on by the Reserve Bank of Australia, increased to 3.3% from 3.2%.

That news didn’t keep investors from buying ASX shares, though, with the S&P/ASX 200 Index (ASX: XJO) closing up 0.8% on the day.

But with the inflation genie back out of the bottle, the odds of any near-term interest rate cuts from the RBA have all but evaporated. And the chances Aussies will see a rate hike in 2026 have soared.

Will the RBA now raise interest rates in 2026?

Trent Saunders, Commonwealth Bank of Australia (ASX: CBA) senior economist, noted investors buying ASX shares should not expect interest rate relief any time soon.

According to Saunders:

This outcome reinforces our view that interest rates will stay on hold for an extended period. Signs of a pick-up in market services will be of particular concern for the RBA, but the signal from this release is still far from clear.

CBA noted:

The Reserve Bank meets in December and is expected to keep rates steady. But with inflation proving sticky, the tone could turn more towards interest rate hikes, especially if services inflation persists.

Farhan Badami, market analyst at eToro, added:

This pretty much confirms the RBA’s easing cycle might be over before it really started, potentially locking in 3.60% cash rate through mid-2026 at least. If inflation doesn’t get any better, it could even add pressure on the RBA to increase rates.

As for higher rates, UBS and Barrenjoey both said they now expect the RBA will hike interest rates once or twice in the year ahead.

Buying ASX shares in a higher interest rate environment

The jury is still out. But following the fourth consecutive month of rising inflation, investors buying ASX shares would do well to review their current and planned shareholdings today.

While all companies come with their own unique risk and reward profiles, some market sectors tend to perform better than others when borrowing costs increase.

As a general rule, ASX value shares often outperform ASX growth shares during periods of monetary tightening.

So you may want to consider increasing your exposure to consumer staples like Coles Group Ltd (ASX: COL) and Woolworths Group Ltd (ASX: WOW) shares and decreasing exposure to ASX consumer discretionary shares.

A lot of ASX tech stocks – often priced with future earnings in mind – could also come under pressure if the RBA raises interest rates in 2026 as higher rates increase the present cost of investing in those future earnings.

The recently rebounding ASX property stocks could also take a hit under this scenario.

ASX banks stocks, on the other hand, could benefit, as higher rates enable them to improve their net interest margins, so long as the wider economy keeps chugging along.

These are just a few broad investment themes to keep in mind when you’re buying ASX shares in today’s environment.

The post Buying ASX shares? Here’s what to know before the RBA starts hiking interest rates appeared first on The Motley Fool Australia.

More reading

• A Black Friday stock tip for free
• ASX 200 vs US stocks: Where the next decade of big winners may come from
• Is the S&P 500 set for a crash? Here’s my plan for the US stock market
• 5 things to watch on the ASX 200 on Friday
• Here are the top 10 ASX 200 shares today

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

The team at Ord Minnett has been busy running the rule over a number of ASX 300 shares.

Two that have fared well and have been given buy ratings are named below. Here’s what the broker is saying about them:

Mineral Resources Ltd (ASX: MIN)

Ord Minnett was pleased with news that this mining and mining services company has formed a joint venture with POSCO Holdings for its lithium assets.

It notes that the Korean giant will pay US$765 million (A$1.2 billion) in cash for a 30% stake in the joint venture. This values its remaining stakes in the Wodgina and Mt Marion operations at ~$4 billion, versus a consensus valuation of $2.8 billion previously.

It also implies a long-term spodumene price of US$1600 a tonne, which is comfortably above market expectations. Commenting on the ASX 300 share, the broker said;

Breaking the $4 billion down equates to around $20 per Mineral Resources share, up from the prior market valuation of $14 a share. ‍Mineral Resources will still be the operator of Wodgina and Mt Marion as per current deals with US company Albermarle and Hong Kong-based Ganfeng Lithium, neither of which have any pre-emptive rights over the POSCO deal.

Post the deal, we make no changes to our FY26 EPS estimate, but our FY27 forecast falls 17.4% to incorporate the effect of the sale and our FY28 number rises 1.1%. We maintain a price target of $55.00 on Mineral Resources and reiterate our Buy recommendation.

As mentioned above, Ord Minnett has a buy rating and $55.00 price target on its shares. This implies potential upside of approximately 15% from its last close price.

Virgin Australia Holdings Ltd (ASX: VGN)

Another ASX 300 share that Ord Minnett is positive on is airline operator Virgin Australia.

The broker was pleased to see the company reiterate its guidance for growth in revenue per available seat kilometre (RASK) of 3% to 5% in the first half of FY 2026. It notes that this is being “underpinned by strong demand and operational performance.”

As a result, the broker has increased confidence in the company’s outlook. It said:

The trading update gave Ord Minnett confidence the near-term outlook is sound, given Virgin’s hedging program, which incorporates the jet fuel spread, means recent rising fuel prices will have little effect on FY26 earnings. Post FY26, we expect higher fuel costs will be mostly, but not all, offset by management of the RASK metric, i.e. some mix of higher ticket prices and reduced capacity. ‍

Post the trading update, we have nudged our FY26 EPS estimate down 0.3%, while our FY27 and FY28 forecasts are cut by 2.8% and 3.1%, respectively, to incorporate the impact of fuel costs, which leads us to trim our target price to $4.00 from $4.10.

Ord Minnett has a buy rating and $4.00 price target on its shares. This implies potential upside of 32% for investors over the next 12 months.

The post Ord Minnett says these ASX 300 shares could rise 15% to 30% appeared first on The Motley Fool Australia.

More reading

• What is Ord Minnetts’ view on Virgin Australia and BHP shares?
• Why are shares in Aussie lithium producers being sold off today?
• Mineral Resources shares: After a year of outperformance (up 45%), is it still a buy?
• Invested in ASX mining shares? Expert recommends diversity over iron ore concentration
• ASX lithium shares outperform as ASX 200 tumbles to four-month low

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.

Should Australian investors lean more heavily into the S&P/ASX 200 Index (ASX: XJO) or focus their long-term compounding efforts on the giant US sharemarket? 

It is a debate that resurfaces regularly, and the truth is rarely as simple as choosing one over the other.

A better way to frame the decision is to understand the strengths and weaknesses of each market, then build a plan you can stick to for decades.

Two markets, two economic engines

The US market has delivered extraordinary long-term returns, fuelled by world-leading innovation, technology giants with global pricing power, and deeper capital markets. Companies in the S&P 500 Index (SP: .INX) and the NASDAQ-100 Index (NASDAQ: NDX) have historically compounded earnings faster than the typical Australian blue-chip business, and that growth shows up in returns.

By contrast, the ASX 200 leans heavily toward banks, miners, energy, and infrastructure—industries that produce significant cash flow and often return large portions to shareholders. For income-focused investors, the ASX 200’s franking credits and dividend culture offer something the US simply does not replicate.

Neither approach is inherently superior. Both markets have produced exceptional wealth builders over time, and both have delivered long stretches of strong returns. Individual businesses on each side of the Pacific have rewarded investors handsomely, often far outperforming their home index. 

And when you examine the results of consistently investing in broad indices over the past 30 years, the long-run compounding outcomes have been far closer than most assume, particularly for investors who dollar-cost-averaged through multiple cycles. 

All else being equal, disciplined participation has mattered far more than the postcode of the index.

Concentration risk works both ways

A common argument is that the ASX 200 is too concentrated, with banks and resources often making up 40%–50% of the index. That is true, and it introduces its own risks when credit cycles turn or commodity prices weaken.

Yet the US market has its own concentration issue. A small group of mega-cap tech companies now represent more than one-third of the S&P 500. Their valuations sit well above long-run averages, and their weighting means the entire index increasingly behaves like a handful of companies. If expectations stumble, the impact could be meaningful.

The point is simple: both markets carry concentration risk, just in different forms.

Currency matters more 

Australian investors who buy US shares also take on exposure to the AUD/USD exchange rate. That can boost returns in periods when the Australian dollar weakens, but it can also reduce returns if the currency strengthens.

Over decades, currency tends to “wash out”, but it does add another layer of volatility that investors must be comfortable with. For Australians seeking stability or regular cash flow, the home market often remains the simplest foundation.

The real differentiator

Across long timeframes, both the ASX 200 and major US indices have delivered mid-to-high single-digit annual returns. Both include companies that go nowhere and companies that become wealth-compounding machines.

In other words, the market you choose matters far less than the discipline you apply.

The most consistent path to long-term returns is:

• investing regularly
• diversifying across sectors and geographies
• avoiding extreme concentration in one theme or country
• staying invested during corrections
• allowing compounding to do its work

Investors who diversify across Australia and the US are simply widening the pool of potential long-term winners. Some of the strongest opportunities over the next decade may come from Australian healthcare, infrastructure, and technology. Others may come from US AI, cloud computing, or industrial reshoring.

A balanced view 

You do not need to predict which market will outperform. You only need to build a portfolio you can keep contributing to, even when headlines turn negative.

Australian shares can anchor a portfolio with dividends and stability. US companies can add higher-growth potential. Combined, they create a mix that reduces the pressure to pick a winner and increases the odds of achieving long-term goals.

For most investors, it really is a case of horses for courses. Both markets have gems capable of compounding wealth far above the index. A disciplined plan that taps into both gives you the best odds of capturing wealth.

The post ASX 200 vs US stocks: Where the next decade of big winners may come from appeared first on The Motley Fool Australia.

More reading

• Buying ASX shares? Here’s what to know before the RBA starts hiking interest rates
• A Black Friday stock tip for free
• Is the S&P 500 set for a crash? Here’s my plan for the US stock market
• 5 things to watch on the ASX 200 on Friday
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Leigh Gant 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’ve gotta be honest; sometimes the Inspiration Fairy brings lots of great ideas for me to use in my writing.

At other times, well, let’s just say she might have been too busy with Black Friday this week.

Not that I don’t have anything to say – if you’ve read any of my work here, or on Twitter, you’ll know I’m not short of an opinion.

But rather, sometimes it’s hard to have something new, interesting and relevant to offer.

I started three different articles this week. I got a bee in my bonnet about different economic policies and announcements but, while I do think our readers enjoy and value that sometimes, I’m wary of overdoing it.

At times like these, I almost envy the day-traders – they always have a bright, shiny thing to chase. We long-term investors rarely get energised by those things… by design.

Frankly, my response to most business news and company announcements is… a shrug.

Not because I’m disinterested, but rather because they very rarely end up changing my view of a given company.

Most of them fall into the category of ‘company doing what it does, and having a little more, or less, success than expected, but the thesis remains unchanged’.

Kinda sounds boring… and almost neglectful, right?

After all, the market reaction to these things can be anything from a yawn to severe. Doesn’t that warrant a response?

Mostly… no.

There’s two reasons.

Firstly, if the market is overreacting to a short term jump, or slump, then so be it. We’re focused on the long term.

Second, if the news is thesis-moving, it’s generally ‘priced in’ immediately, and there’s no fancy trading that’d even be possible.

Disappointed? Expected me to have some fancy crystal ball or high-tech trading strategy?

Sorry, but again… no.

It’d be nice to imagine it’s possible, but it’s just not.

But also, if it was, do you reckon we’d beat the big end of town with their nanosecond trading algorithms and high speed data connections?

Here’s the best thing, though: our style of investing doesn’t need it.

We don’t care about squiggly lines on a chart, day-trading strategies, or six-monitor Bloomberg terminals.

We don’t want to look fancy, or impressive, or like modern-day Wolves of Wall Street.

We just want to make money.

And the best way we know to do that is to put the work into understanding companies, paying decent prices, and letting time do the work.

Kinda the way Warren Buffett does it.

No, I’m not Buffett. I will never be Buffett.

But an investment approach following his example is, we expect, a wonderful way to build long term wealth.

Which takes me back to the breathless reporting of results and the (I think) silly short-term trading that surrounds it.

When a company reports results (or more recently, updates the market on year-to-date sales, at annual general meetings), the question we ask is a simple one:

“Does this impact our view of the company’s long term future, and the price we’re prepared to pay for that future?”

Two such companies provided AGM updates this week: Harvey Norman Holdings Ltd (ASX: HVN) (I own shares) and Temple & Webster Group Ltd (ASX: TPW).

Both updates were very good: Harvey’s sales were up 9% and Temple & Webster’s revenue climbed 18%.

And the result?

Both companies’ shares fell – Harvey by a little, Temple by a lot.

Why? The market seemed to want even more.

Now, a fall isn’t necessarily or always wrong: if a company’s shares are priced for 50% growth and it only delivers 5%, it might make sense for them to drop.

…maybe…

Because it’s not about the past.

See, share prices should reflect not the last few months, but a company’s future, from here to eternity.

Again, maybe a huge sales miss does dim the brightness of a business’ long term future. If so, and if it was priced for perfection, it would make sense for shares to fall.

But take Temple & Webster.

Shares fell 32% on Wednesday.

That is, the market is telling you that it thinks the company’s entire, eternal, future is a full one-third less bright than it believed, just a day earlier.

Really?

I mean, the market might be right (in which case it was very, very wrong a day earlier).

Here’s a Black Friday special for you, for free: my team and I at Motley Fool Share Advisor, one of the investment services I run, reckon Temple & Webster is a Buy.

We thought so on Tuesday, before the fall. We still think so, today, after it.

Not because of, or despite, the announcement.

But because we think that Temple & Webster can compound sales and profit growth meaningfully over the next 5 and 10 years.

We might be wrong, of course. And hey, if we get to choose between 18% growth and 38% growth, we’d always choose the latter!

We think 18% sales growth is pretty good, though, and gives the company plenty of room to keep growing in future, as it executes against its strategy and benefits from a structural shift to ecommerce.

Most importantly, we know what game we’re playing.

We’re running a 42.2km marathon, not 422 100m sprints.

If you want to do the latter, good luck.

But if so, Aesop’s hare called, and wants to give you some advice!

Have a great weekend.

Fool on!

The post A Black Friday stock tip for free appeared first on The Motley Fool Australia.

More reading

• Buy, hold, sell: Aristocrat, Domino’s, and Temple & Webster
• Here are the top 10 ASX 200 shares today
• Macquarie reveals ASX 200 share tips in each market sector for 2026
• Should you buy Temple & Webster shares after the crash?
• 5 things to watch on the ASX 200 on Thursday

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

There are a good number of ASX 200 shares to choose from on the local market.

But which ones could be buys right now? Let’s take a look at three popular options and see if brokers rate them as buys, holds, or sells. Here’s what you need to know:

Aristocrat Leisure Ltd (ASX: ALL)

The team at Morgans has been looking at this gaming technology company following its FY 2025 results. It was pleased with its performance and notes that its result was in line with expectations.

In light of this and recent share price weakness, the broker recently upgraded its shares to a buy rating with a $73.00 price target. It said:

We see no structural shift in market dynamics and remain comfortable with the outlook. ALL reiterated its qualitative guidance for constant currency NPATA growth in FY26 (MorgansF: +10%). Following the result, our EPSA forecasts decrease ~6% across FY26-27F. Given recent share price weakness and a more compelling valuation, we upgrade ALL from Accumulate to Buy, with our 12-month target price reduced to $73 (from $77).

Domino’s Pizza Enterprises Ltd (ASX: DMP)

Another ASX 200 share that Morgans has been looking at is pizza chain operator Domino’s.

The broker was encouraged by its improving performance. And while its shares have rallied recently, Morgans still sees plenty of value here for investors. As a result, it has put a buy rating and $25.00 price target on its shares. It said:

DMP’s FY26 AGM update was positive, in our view, given the company is on track to exceed FY26 consensus NPAT, cost out was quantified, and its gearing metrics are improving. The trading update was weak, with Same-Store Sales (SSS) growth still negative; however, we think this is somewhat irrelevant while the business transitions to its new pricing strategy to drive higher margin sales for franchisees given the noise around the short-term volume impact of less discounting (i.e. lost sales were unprofitable anyway).

While DMP’s share price has recently increased ~55% off its lows on the back of potential corporate activity, the stock is still only trading on a FY26F PE of 16x which is a ~30% discount to CKF. With improving confidence in the turnaround, we continue to think the risk reward looks attractive from here. Maintain BUY.

Temple & Webster Group Ltd (ASX: TPW)

Over at Bell Potter, its analysts remain positive on this online furniture and homewares retailer following a selloff in response to its recent trading update.

It has put a buy rating and $19.50 price target on its shares. It continues to believe that Temple & Webster is well-positioned for long term growth. It commented:

Our views are unchanged of TPW’s ability to outperform over the long term as market share capture in an expanded TAM is expedited with range, pricing/scale advantages, backed by a strong balance sheet (+$150m cash). Trading at ~2x EV/Sales post the ~40% correction in the share price from the recent peak, we see risk-reward heading into the Feb 1H result and continue to see a buying opportunity. Maintain BUY.

The post Buy, hold, sell: Aristocrat, Domino’s, and Temple & Webster appeared first on The Motley Fool Australia.

More reading

• A Black Friday stock tip for free
• 4 ASX 200 large-cap shares with new ratings from Morgans
• Here are the top 10 ASX 200 shares today
• Macquarie reveals ASX 200 share tips in each market sector for 2026
• Should you buy Temple & Webster shares after the crash?

Motley Fool contributor James Mickleboro has positions in Domino’s Pizza Enterprises and Temple & Webster Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Domino’s Pizza Enterprises and Temple & Webster Group. The Motley Fool Australia has recommended Domino’s Pizza Enterprises and Temple & Webster Group. 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 Consumer Discretionary Index (ASX: XDJ) is up a modest 4% in the last year. 

This sector is heavily influenced by factors like inflation, interest rates, and CPI. 

But while much of the sector has been relatively flat in the past year, there are two clear standouts that have brought impressive returns. 

Eagers Automotive Ltd (ASX: APE)

The company is the largest automotive retailing group in the Australian market.

The company’s core business involves the ownership and operation of motor vehicle dealerships covering a diversified portfolio of automotive brands. Its range of products and services includes the sale of new and used vehicles, vehicle repair services, and parts, among others.

The Motley Fool’s Kevin Gandiya covered last month that Eagers Automotive has benefited significantly from the rise of the fast-growing Chinese electric vehicle brand, BYD. 

Eagers operates roughly 80% of the Australian dealerships that sell BYD cars.

12 months ago, Eagers Automotive shares were trading at approximately $10.98 each. 

Yesterday, these consumer discretionary shares closed at $29.58. 

That represents a rise of almost 170%. 

A hypothetical investment of $10,000 this time last year would now be worth almost $27,000. 

Autosports Group Ltd (ASX: ASG) 

Another consumer discretionary stock that has raced ahead of the market in the last 12 months is Autosports Group. 

While Eagers deals with new and used cars, Autosports Group specialises in luxury and prestige car brands. 

The company’s core business focuses on the sale of new and used motor vehicles. It also provides finance and insurance products on behalf of retail financiers and automotive insurers. 

The company has been expanding in the recent months, completing the acquisition of Mercedes-Benz Canberra and securing a prime Southport, Queensland site to develop a new flagship Mercedes-Benz facility.

12 months ago, Autosports shares were trading for $1.91 each. 

Yesterday, the share price closed at $4.52, which represents a rise of 142.36%. 

Based on these figures, a hypothetical investment of $10,000 a year ago would now be worth $23,665. 

Are either of these consumer discretionary stocks still a buy?

After rising significantly over the last year, many investors may feel they have missed the time to buy. 

Earlier this month, the team at Macquarie provided analysis on both stocks. 

The broker ultimately preferred Eagers Automotive shares due to the scale of its organic and inorganic growth opportunities. 

The broker had a price target of $29.98 on Eagers stock and $3.63 for Autosports Group.

This would indicate that Eagers is trading close to fair value, while Autosports Group is slightly overvalued at present. 

The post $10,000 invested a year ago in these consumer discretionary shares is now worth… appeared first on The Motley Fool Australia.

More reading

• 2 soaring ASX 200 shares I’d buy with $10,000 today
• This fund manager is bullish on these ASX 300 shares
• 2 ASX shares to buy with strong growth potential
• Macquarie has singled out the automotive stocks they say are worth a look
• Why are Eagers Automotive shares being sold off today?

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 positions in and has recommended Macquarie Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended BYD Company. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool Australia has recommended Eagers Automotive Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Many Aussie investors will already have exposure in their portfolio to international stocks from the US. 

But a new report from Wilsons Advisory has reinforced the case for targeting stocks outside the Australian and US markets. 

Tony Brennan, Chief Investment Strategist, said until this year, being concentrated in US equities within international portfolios produced better returns.

But this year, the US has underperformed the rest of the world, illustrating the benefits of being more diversified.

US stocks have provided prolonged success

In the report from Wilsons Advisory yesterday, the firm reinforced the success investors have had by targeting US stocks, particularly technology shares.

Brennan said this has been supported by a generally solid economy and boosted by a large corporate tax cut during the first Trump Administration. 

In the last decade, Europe had to contend with fiscal restraint after its sovereign debt crisis in 2012, the rupture of Brexit in 2016, and the war in Ukraine since 2022. 

Changing tides

Although the US and the rest of the world have faced different challenges over the past decade, this year both sides were hit by the same shock: the new US tariffs and resulting trade war.

Despite initial fears, after nine months it’s clear that economic damage from tariffs has been less severe than anticipated. Additionally, growth across major economies has held up better than expected.

The report also indicated that a key change this year is that the gap between US economic growth and growth in other major regions has narrowed.

International stock picks from Wilsons Advisory 

The report highlighted 9 international stocks that the firm believes offer exposure to similar structural growth themes as US peers, while providing valuation alternatives. 

After their remarkable success, many of the large US companies, particularly the large US tech stocks, are quite well known and well held by investors. So, in this report we highlight some major companies in other markets that could provide desired diversification for Australian investors.

The 9 international stocks are: 

• HSBC Holdings PLC (UK)
• Airbus SE (France)
• ASML Holding NV (Netherlands)
• L’Oreal SA (France)
• Roche Holding AG Genussscheine (Switzerland) 
• SAP SE (Germany)
• Siemens AG (Germany)
• Sony Group Corp (Japan)
• Tencent Holdings Ltd (Hong Kong). 

The report said Airbus, ASML, SAP, and Siemens deliver access to industrial automation, semiconductor infrastructure, and aerospace duopolies with strong pricing power. 

L’Oréal and Roche represent defensive quality with global market leadership in beauty and healthcare, delivering stable earnings with reduced cyclicality. 

Sony and Tencent provide exposure to Asian technology platforms at more attractive valuations than US counterparts.

HSBC offers global banking exposure at modest valuations relative to US and Australian banking peers.

How to gain exposure 

Investors looking to gain exposure to these international stocks can target each one individually. 

However, there are also ASX ETFs that include many of these companies. 

For example, the Vanguard FTSE Europe Shares ETF (ASX: VEQ) includes 7 of these companies that are based in Europe/UK.

This is the same for the iShares Europe ETF (ASX: IEU). 

Both funds are up 20% or more in 2025. 

The post Wilsons Advisory says target these 9 international stocks appeared first on The Motley Fool Australia.

More reading

• 2 great ASX shares I’d buy for diversification
• The best ASX ETFs to buy and hold for 20 years
• 3 ASX ETFs that could be perfect for beginner investors
• The best ASX ETFs to buy in November with $5,000

HSBC Holdings is an advertising partner of Motley Fool Money. 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 positions in and has recommended ASML and Tencent. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended HSBC Holdings, Roche Holding AG, and SAP. The Motley Fool Australia has recommended ASML. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

There are plenty of investment strategies. From income/dividend investing, investing for value, growth, passive and quality investing. 

Some investors look purely for stocks that are undervalued, others for steady income.

However the team at Betashares has given a clear roadmap of the principles behind quality investing. 

What is quality investing?

Quality investing is an investment strategy that focuses on buying shares of financially strong, well-managed companies with durable competitive advantages. 

According to Betashares, there are three key fundamentals to consider when targeting quality companies.

The first is high return on equity (ROE). 

Essentially, the ROE indicates how efficiently a company uses its equity financing to generate income. 

Having a high return on equity means a company is capable of effectively using shareholder equity to generate profits, has the potential to fund expansion without incurring excessive debt and possesses an efficient business model.

The second metric to assess is a company’s level of leverage. 

Leverage is when a company borrows funds (takes on debt) to invest. The goal is for the debt to be invested successfully, generating returns that exceed the cost of servicing the debt. 

You can measure this by looking at the debt-to-equity ratio (D/E). 

A high D/E ratio is a warning that the company is at risk of financial problems. However, a low D/E ratio is also not ideal. You want to see that a company is using debt responsibly, rather than avoiding it altogether. 

The final metric to consider in quality investing is earnings stability. 

While the previous two metrics measure profitability and financial strength, earnings stability shows whether a company can provide this over a long period of time. 

According to Betashares, earnings stability measures the consistency with which earnings have been generated over time. 

It can be measured by looking at how much a company’s return on equity (ROE) has deviated from its average level over the past five years. 

The more that yearly ROE figures deviate from the average, the less stable the company’s earnings are considered to be.

In simple terms, quality investing targets companies with a high return on equity, low levels of debt (and leverage) and stable earnings. 

When does it work best?

Research from Polen Capital indicates that quality companies tend to outperform, particularly during late-cycle and recessionary periods. 

In contrast, quality investments typically underperform when low interest rates and accommodative economic policy are dominant macroeconomic features. 

According to Betashares, quality companies are typically more resilient in a downturn. 

Belief in a quality investing style is embedded in the logic that companies with a high return on equity, low levels of debt (and leverage) and stable earnings are, by their very nature, traditionally more resilient in a downturn and provide strong returns over most of the cycle. Their strong balance sheets and consistent cash generation can provide a buffer when market conditions deteriorate.

Quality investing-focused ETFs

If this strategy aligns with your investment goals, you can apply it to individual companies and target those that are outperforming their peers. 

Another option for investors who may want to take the work out of finding individual companies to invest in are ETFs that group these companies, such as the following:

• Betashares Australian Quality ETF (ASX: AQLT) – It reweights the largest Australian companies by quality metrics – high return on equity, earnings stability, and low levels of leverage, rather than market capitalisation.
• Betashares Global Quality Leaders ETF (ASX: QLTY) – Comprises 150 of the highest quality global companies.
• Betashares Global Quality Leaders ETF – Currency Hedged (ASX: HQLT) – Currency hedged version that may attract investors seeking to reduce exchange rate volatility.

The post The fundamentals behind quality investing according to experts 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.

Now could be the time to pounce on Nick Scali Limited (ASX: NCK) shares.

That’s the view of analysts at Bell Potter, which believe the ASX 200 stock is good value despite rising by almost 60% this year.

What is the broker saying about this ASX 200 stock?

Bell Potter is feeling positive about the furniture retailer due largely to its industry leading margins and global expansion. It believes this means the ASX 200 stock deserves its premium valuation and has decribed it as an “unmatched furniture retailer.” The broker said:

NCK is one of Australia’s largest furniture retailers competing within the middle to upper end of the Australian furniture market and growing its global presence via the UK entry. NCK is currently trading on ~26x FY26e P/E (BPe) which we think is justified given industry leading EBIT margins within the global peer group of high-quality retailers/vertically integrated brands in the broader category that we consider. NCK provided a strong 1H26e guidance of 7-9% revenue growth for its ANZ business, while for the overall group NPAT of $33-35m and we sit towards the mid-point of the range.

Its analysts also highlight that Nick Scali has a significant opportunity to grow its store network in the lucrative UK market. It has been busy sizing up the market and sees scope for the company to increase its store footprint threefold. It adds:

We size NCK’s UK market opportunity based on the market fragmentation and the average size of close peers. We see a long-term potential of ~60 stores for the brand in the UK which is a ~3x opportunity (vs current footprint) offering the highest growth for the business.

As NCK UK revenues grow over the next 7+ years, we expect continuing earnings leverage over its cost base which should see a stronger uplift in earnings over the longer term. Early success of the Nick Scali product sees the offering appearing to be unique in the market and resonating well supported by the quality and value offered at relevant price points vs peer offerings.

Initiate with buy rating

According to the note, the broker has initiated coverage on Nick Scali’s shares with a buy rating and $27.00 price target. Based on its current share price of $23.38, this implies potential upside of 15.5% for investors over the next 12 months.

In addition, Bell Potter expects a 2.7% dividend yield in FY 2026, which lifts the total potential return to offer 18%. It concludes:

We initiate coverage of Nick Scali with a Buy rating and PT of $27.00 based on a blend of P/E (23x target multiple on a FY27e basis) and DCF (WACC ~9%, TGR 3.5%) methodologies. We see steady market share in the core Nick Scali brand somewhat offsetting a less conducive macro environment, while further growth via the Plush brand over time in Australia and a larger opportunity in the UK offering sufficient growth levers to the company.

We see this backed up by the high-quality earnings model where NCK leads in its global peer group of household goods retailers, in addition to being the most attractive goods retailers within the ASX200 (on a growth adjusted basis). We see catalysts for 1H earnings driven by supportive 2Q26 comps.

The post Buy alert! Bell Potter says this ASX 200 stock is ‘unmatched’ appeared first on The Motley Fool Australia.

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• 5 things to watch on the ASX 200 on Friday
• What are Macquarie’s key picks in the retail space?
• Nick Scali shares spike to record high: How much more upside is left?
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• Which ASX 200 furniture retailer’s shares have hit a new record high on a profit upgrade?

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

Small-cap stock Matrix Composites & Engineering Ltd (ASX: MCE) is in focus after its share price soared 9.5% higher on Thursday. 

The company provides subsea umbilicals, risers and flowlines (SURF) buoyancy and corrosion protection solutions to offshore oil and gas projects.

Based on an updated price target from Bell Potter, it still has significant upside.

Why did shares rise on Thursday?

Markets reacted positively to the company’s 2025 AGM, which included a positive FY26 outlook. 

The company announced $70m of FY26 secured revenue (including YTD sales), comprising $65m of contracted Subsea work. 

It reiterated a strong quotation pipeline for drilling and SURF markets, with opportunities currently under negotiation likely to add to the FY26 orderbook upon conversion.

The team at Bell Potter stated that, in addition, revenue, EBITDA, and profitability will be weighted towards 2H FY26, with EBITDA expected to be positive in FY26. 

Why does this matter?

For a small-cap stock, guidance that EBITDA will be positive in 2026 is a big deal because it signals a fundamental shift in the company’s financial health and risk profile.

Essentially, it marks a transition from “cash-burn” to “self-funding.”

Many small-caps – especially in tech, biotech, clean energy, and early-stage industries – operate with negative EBITDA, meaning their core operations are unprofitable.

A move to sustained positive EBITDA in 2026 is significant because, although the company has hovered around breakeven and even turned positive before, long-term projections from Bell Potter show a durable and expanding profitability trend. 

This shift signals that the business model is stabilising and scaling, reducing future funding risk and increasing investor confidence in lasting growth.

Is this small-cap stock a buy, hold or sell?

While the guidance of a positive EBITDA is good news, Bell Potter remains cautious about this small-cap stock. 

In a report from the broker yesterday, it maintained its hold recommendation, but lowered its target price to $0.26 (previously $0.28). 

Bell Potter said phasing of major work has driven a worse-than-expected impact on revenue, EBITDA and profitability in 1H FY26, driving a downgrade to our 1H FY26 EBITDA estimate from $1.8m to -$0.6m. 

On a positive note, it said a strong skew to 2H FY26 EBITDA and profitability should drive positive FY26 EBITDA (BPe $6.2m, +25% YoY). 

Matrix Composites & Engineering Ltd has flagged further pipeline opportunities that could support FY26 project deliveries upon conversion, potentially representing upside to our forecasts.

Matrix Composites & Engineering shares closed yesterday at $0.23 after the 9.5% jump. 

Based on the updated price target of $0.26, there is an estimated upside of approximately 13% for this ASX small-cap stock. 

The post Why did this small-cap energy stock just jump 10% higher? appeared first on The Motley Fool Australia.

More reading

• Wilsons Advisory says target these 9 international stocks
• The fundamentals behind quality investing according to experts
• Buy alert! Bell Potter says this ASX 200 stock is ‘unmatched’
• Dividend investors: Top Australian energy stocks to buy in December
• Forget Droneshield shares, I’d buy this ASX defence stock instead

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.