Category: Stock Market

ASX-focused exchange-traded funds (ETFs) are some of the most popular funds in Australia. But investors could be missing out if they are overinvested in funds that are focused on the ASX share market.

Several of the biggest ASX ETFs aim to give investors exposure to 200 or 300 of the largest businesses on the ASX. I’m talking about funds like Vanguard Australian Shares Index ETF (ASX: VAS), SPDR S&P/ASX 200 ETF (ASX: STW), iShares Core S&P/ASX 200 ETF (ASX: IOZ) and BetaShares Australia 200 ETF (ASX: A200).

However, the main ASX indices are heavily focused on just a few large blue chips, mainly from two sectors – ASX bank shares and ASX mining shares. We’re talking about names like BHP Group Ltd (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA), National Australia Bank Ltd (ASX: NAB), Westpac Banking Corp (ASX: WBC), ANZ Group Holdings Ltd (ASX: ANZ), Rio Tinto Ltd (ASX: RIO) and Fortescue Ltd (ASX: FMG).

However, the ASX only accounts for 2% of the global share market, and many of the world’s strongest businesses are listed outside of Australia. The global share market has outperformed the ASX thanks to the focus on growth of those large businesses like Microsoft, Alphabet and Nvidia.

With that in mind, I’m going to name three international ETFs that could provide balance to portfolios that are too heavily weighted to ASX ETFs.

Betashares Global Quality Leaders ETF (ASX: QLTY)

This fund invests in a portfolio of 150 international companies that rate highly on quality metrics.

Those rankings are based on a combined ranking of four factors – return on equity (ROE), debt-to-capital, cash flow generation ability and earnings stability. A business that strongly ticks all four of these boxes is rare and is often able to deliver good returns for shareholders.

To me, it’s no surprise the QLTY ETF has returned an average of 14.2% per annum over the last five years, though past performance is not a guarantee of future performance.

The holdings are fairly similarly weighted, with the largest position having a 2.4% weighting. The four positions with an allocation of more than 2% are Adobe, Intuit, Servicenow and Accenture.

VanEck MSCI International Quality ETF (ASX: QUAL)

This is another QUAL ETF that chooses its holdings based on certain quality metrics.

Its portfolio includes around 300 holdings from around the world, with stocks from the US, Switzerland, the UK, Denmark, and the Netherlands each making up more than 3% of the fund.

There are three factors that dictate whether a stock will make it into this portfolio: a high ROE, earnings stability and low financial leverage. A business that ranks highly on all three of these factors is likely to be a high-quality idea.

Impressively, the QUAL ETF has returned an average of 17.1% in the last five years. Again, past performance is not a guarantee of future performance.

Currently, there are four positions with a weighting of more than 5%: Nvidia, Apple, Meta Platforms and Microsoft.

VanEck Morningstar Wide Moat ETF (ASX: MOAT)

This ETF’s portfolio is decided by analysts at Morningstar, who are looking for US businesses with strong competitive advantages that are expected to endure for at least two decades. Economics moats can come in many different forms, such as brand power, cost advantages or patents.

After that, the MOAT ETF only invests in these great businesses if they’re trading at an attractive valuation compared to what the Morningstar team think that business is worth.

At the moment, the VanEck Morningstar Wide Moat ETF is invested in Adobe, International Flavours & Fragrances, Altria and Campbell Soup.

In the last five years, the MOAT ETF has delivered an average return per annum of 14.75%.

The post Overinvested in ASX-focused ETFs? Here are three alternatives appeared first on The Motley Fool Australia.

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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Motley Fool contributor Tristan Harrison has positions in Fortescue. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Accenture Plc, Adobe, Alphabet, Apple, Intuit, Meta Platforms, Microsoft, Nvidia, and ServiceNow. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2025 $290 calls on Accenture Plc, long January 2026 $395 calls on Microsoft, short January 2025 $310 calls on Accenture Plc, and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has recommended Adobe, Alphabet, Apple, Meta Platforms, Microsoft, Nvidia, ServiceNow, 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.

Guzman Y Gomez Ltd (ASX: GYG) shares have been in the spotlight over the past few weeks following the quick service restaurant operator’s highly successful initial public offering (IPO).

The Mexican food chain rocketed as much as 36% on day one to a high of $30.00 after listing on the Australian share market at $22.00.

This gave the company a mouth-watering market valuation of $3 billion at the time.

But while some investors may have a taste for Guzman Y Gomez shares, I am avoiding them like a bad burrito right now. Let’s take a look at five reasons why I think investors should put its shares in the bin.

Reason 1: Guzman y Gomez shares are overvalued

Guzman Y Gomez shares are trading on mind-boggling multiples.

According to its prospectus, revenue is expected to be $339.7 million in FY 2024, with a profit after tax of $3.4 million. Then, revenue of $428.2 million is forecast for FY 2025, with a profit after tax of $6 million. The latter will mean a profit margin of just 1.4%.

Based on its current market capitalisation of $2.93 billion, this means its shares are trading at ~488x estimated FY 2025 earnings.

As a comparison, KFC restaurant operator Collins Foods Ltd (ASX: CKF) is trading at 16.8x estimated FY 2025 earnings, according to analysts at UBS.

Reason 2: Guzman y Gomez has no moat

I’m not afraid to invest in companies with high price-to-earnings multiples (P/E ratios).

For example, one large holding in my portfolio is Pro Medicus Limited (ASX: PME). You will find that it trades on one of the highest P/E ratios. However, it has a wide moat, an unmatched platform, high margins, a huge market opportunity, and large long-term contracts with locked-in revenue.

Guzman Y Gomez has no moat, lots of competition, tiny margins, and no guarantee that customers are going to come back week after week, let alone year after year. In light of this, I don’t believe for a second that it justifies trading on such high earnings multiples.

Reason 3: Its growth plans look too ambitious

Some investors argue that Guzman Y Gomez shares deserve to trade on high multiples because of its ambitious growth plans. But I would argue that these plans are too ambitious.

The company has an aspiration to open 1,000 restaurants in Australia. This compares to the 185 restaurants that it operates across the country today.

However, McDonald’s only has 970 restaurants in Australia today. I don’t believe Guzman Y Gomez could get anywhere near that number and still generate good returns on store openings. McDonald’s is a force of nature, with a menu that offers something to everyone at any time of the day. I don’t believe you can say the same for Guzman Y Gomez’s menu.

While I think it still has a decent growth runway, I believe there will come a point (sooner than it thinks) when it starts to cannibalise sales.

Reason 4: US expansion could be a flop

Another reason that investors believe Guzman Y Gomez shares justify a premium valuation is its US expansion. But I think investors should be very wary about this expansion and place little to no value on it until it has demonstrated this in the highly competitive market.

At present, it has a handful of stores in the US, and they are all loss-making. I have doubts they will be able to scale to a level that generates meaningful profits, especially given the competition it faces over there. Chipotle is essentially the Guzman Y Gomez of the United States and has approximately 3,400 restaurants across the country.

And that’s just Mexican food competition. The United States has more fast food options for consumers than you can shake a fork at.

Reason 5: Conflicted bullish broker?

Guzman Y Gomez shares have been roaring higher in recent sessions after analysts at Morgans initiated coverage with an add rating and $30.80 price target.

While Morgans was not named in the company’s prospectus, the AFR is reporting that the “broker quietly co-led the company’s IPO, with its junior sell-side analyst even getting his slice.”

In light of this, I would not place much weight on this recommendation. Instead, I would focus more on Ord Minnett’s valuation of $15.00.

Conclusion

Overall, I think Guzman Y Gomez shares are vastly overvalued at current levels and could be destined to crash deep into the red once the hype dies down and if its growth plans start to falter.

In light of this, I plan to wait until its shares are trading in or around the $7 to $10 mark before considering an investment.

The post 5 reasons I’d throw Guzman y Gomez shares in the bin like a bad burrito appeared first on The Motley Fool Australia.

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• Why I invested in Guzman Y Gomez (GYG) shares this week for the long-term
• GYG share price ends the week at $28. Is $62 in its future?
• Why Clinuvel, Guzman y Gomez, Magellan, and Sandfire shares are charging higher
• Top brokers name 3 ASX shares to buy today

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

If you have space in your portfolio for some new ASX growth shares this month, then it could be worth checking out the five listed below.

They have all recently been named as buys by brokers and tipped to rise meaningfully from current levels. Here’s what you need to know about these top growth shares:

Life360 Inc (ASX: 360)

Analysts at Bell Potter see this location technology company as an ASX growth share to buy. The broker is positive on Life360 due to its belief that it has the “potential to leverage its large and growing user base to enter new markets and disrupt the legacy incumbents.”

It has a buy rating and $17.75 price target on Life360’s shares. This implies potential upside of 11% for investors from current levels.

Lovisa Holdings Ltd (ASX: LOV)

Bell Potter is also feeling very bullish about fashion jewellery retailer Lovisa. The broker believes this ASX growth share is well-positioned thanks to its ongoing global expansion. In fact, the broker believes Lovisa can grow its already sizeable network by 10% per annum between FY 2023 and FY 2034. If it delivers on this, it will underpin strong sales and earnings growth over the next decade.

Bell Potter currently has a buy rating and $36.00 price target on its shares. This suggests that upside of 12.5% is possible over the next 12 months.

Megaport Ltd (ASX: MP1)

Another ASX growth share that could give your portfolio a boost is Megaport. It is a leading global provider of elastic interconnection services, which has been growing at a rapid rate in recent years thanks to the cloud computing boom.

Citi is very positive on the company’s outlook due to the accelerating cloud growth and migration trends. It has a buy rating and $16.05 price target on Megaport’s shares, which implies potential upside of over 40% for investors.

Webjet Limited (ASX: WEB)

Morgans thinks that online travel booking company Webjet could be an ASX growth share to buy. It was impressed with its FY 2024 results and believes there’s more to come from the key WebBeds business. In addition, it highlights that a potential demerger of this side of the business could unlock value for shareholders.

Morgans has an add rating and $11.20 price target on Webjet’s shares. This suggests upside of almost 25% for investors.

WiseTech Global Ltd (ASX: WTC)

Finally, analysts at UBS believe that WiseTech Global could be an ASX growth share to buy this month. The broker suspects that the company could deliver earnings well ahead of consensus expectations in the near term. In addition, it is very positive on WiseTech Global’s long term outlook thanks to its huge addressable market.

UBS has a buy rating and $112.00 price target on its shares. This implies potential upside of 15% for investors.

The post 5 ASX growth shares that could rise 10% to 40% appeared first on The Motley Fool Australia.

More reading

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Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor James Mickleboro has positions in Life360 and Lovisa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Life360, Lovisa, Megaport, and WiseTech Global. The Motley Fool Australia has positions in and has recommended WiseTech Global. The Motley Fool Australia has recommended Lovisa and Megaport. 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 tough 12 months for IGO Ltd (ASX: IGO) shares.

Since this time last year, the ASX lithium stock has lost 62% of its value.

This means that if you had invested $5,000 into its shares a year ago, you would only have $1,900 left today.

Where next for this ASX lithium stock?

Unfortunately, one leading broker believes there are more declines to come for the battery materials miner.

According to a note out of Bell Potter this morning, its analysts have downgraded IGO’s shares to a sell rating (from hold) and cut the price target on them by 32% to $5.15 (from $7.60).

Based on the current IGO share price of $5.70, this implies potential downside of approximately 10% for this ASX lithium stock.

What did the broker say?

Although Bell Potter was pleased to see that dividends continue to be paid from the Tianqi Lithium Energy Australia (TLEA) joint venture, it has still taken an axe to its earnings estimates to reflect weaker than expected lithium prices. It commented:

Dividends from TLEA have been lumpy in FY24, with 1Q $578m, 2Q $0m, 3Q $25m, and now 4Q $159m. We view the dividend as a positive signal on TLEA’s ability to generate returns to shareholders in the current lithium price environment, while executing committed expansion programmes at Greenbushes. Our EPS changes include: FY24 -1%, FY25 -65%, FY26 -17%, resulting from changes to our forecast lithium production and price forecasts, mainly driven by reducing our average SC6 forecast over the next 12-months to US$1,200/t (from US$1,400/t) and our average lithium hydroxide forecast over the next 12-months to US$15,500/t from (US$24,000/t).

In response to the above, the broker has conducted a valuation sensitivity analysis to long-term lithium prices. Its model found that the market is pricing in stronger long-term lithium prices than it is comfortable with. It concludes:

We conducted a valuation sensitivity analysis to long-term lithium prices, using our model. The analysis highlights that the current share price implies long-term lithium prices of US$1,450/t SC6 and US$20,000/t lithium hydroxide, which are significantly higher than spot prices (US$1,000/t SC6 and US$12,000/t), notwithstanding the existing high degree of negative market sentiment around the lithium sector. In our view there remains considerable further short-term downside risk to the share price if sentiment deteriorates further. We reduce our Target Price by blending (50:50) our BPe valuation (using our commodity price forecasts) with a spot price valuation, reduce our Target Price to $5.15ps, and downgrade our recommendation to Sell.

The post Guess which ASX lithium stock was just named as a sell appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Tuesday
• ASX lithium shares: Screaming bargains or falling knives?
• Here are the top 10 ASX 200 shares today
• Which ASX lithium shares are financially primed to survive this rut?
• Is it time to buy FY24’s worst-performing ASX shares?

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.

The average dividend yield on the Australian share market is traditionally around 4%.

But investors don’t need to settle for that when there are high-yield ASX dividend shares out there to choose from.

For example, the three shares listed below have been named as buys and tipped to offer yields of 5% to 7%. Here’s what you need to know about them:

Accent Group Ltd (ASX: AX1)

Accent Group could be a top ASX dividend share to buy for income investors. It is footwear focused retailer with over 800 stores across brands such as Sneaker Lab, Platypus, Stylerunner, and The Athlete’s Foot.

Bell Potter likes the company. It believes it is well-placed thanks to its “growth adjacencies via exclusive partnerships with globally winning brands such as Hoka and growing vertical brand strategy.”

The broker expects this to underpin fully franked dividends per share of 13 cents in FY 2024 and then 14.6 cents in FY 2025. Based on the latest Accent share price of $1.91, this represents dividend yields of 6.8% and 7.6%, respectively.

Bell Potter has a buy rating and $2.50 price target on its shares.

IPH Ltd (ASX: IPH)

Another ASX dividend share that could offer larger than average dividend yields is IPH.

It is an intellectual property solutions company offering a wide range of services for the protection, commercialisation, enforcement, and management of intellectual property.

The team at Goldman Sachs thinks it would be a good option for income investors. This is because it believes IPH is “well-placed to deliver consistent and defensive earnings with modest overall organic growth.”

Goldman expects this to support fully franked dividends of 34 cents per share in FY 2024 and 37 cents per share in FY 2025. Based on the current IPH share price of $6.15, this represents yields of 5.5% and 6%, respectively.

The broker has a buy rating and $8.70 price target on its shares.

Rural Funds Group (ASX: RFF)

Analysts at Bell Potter are also feeling positive on Rural Funds and see it as an ASX dividend share to buy.

Rural Funds is an agricultural property company that owns assets including almond orchards, macadamia orchards, vineyards, cattle properties, and cropping properties.

Its analysts believe Rural Funds is well-placed to reward its shareholders with dividends per share of 11.7 cents in both FY 2024 and FY 2025. Based on the current Rural Funds share price of $2.03, this will mean yields of 5.75% in both years.

Bell Potter currently has a buy rating and $2.40 price target on its shares.

The post Buy these ASX dividend shares for 5% to 7% yields appeared first on The Motley Fool Australia.

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

It’s been a decent start to both the month of July and the 2025 financial year for ASX shares so far. Since the end of FY24, the All Ordinaries Index (ASX: XAO) has risen by a tentative 0.25%. But let’s talk about one ASX healthcare stock that has started FY25 off with a bit more of a whimper.

That ASX healthcare stock is none other than Medadvisor Ltd (ASX: MDR). Sure, Medadvisor shares didn’t have a spectacular start to the trading week on Monday, finishing the day flat at 50 cents a share.

But when you consider that those same shares started the 2024 calendar year at just 22 cents apiece, it’s hard to feel sorry for owners of this ASX healthcare stock.

Yes, Medadvisor shares are up a whopping 127.27% over 2024 to date. This company is also up 108.33% over the past 12 months, and has gained 11.11% over the past month alone.

Check that all out for yourself below:

So how has this ASX healthcare stock pulled off such significant gains, especially over the past month alone?

How has this ASX healthcare stock risen 127% in 2024?

Well, excitement over Medadvisor shares arguably started building after the ASX healthcare stock released an impressive quarterly update back in April. As we briefly covered at the time, this saw Medadvisor post a 42.4% rise in operating revenues for the quarter ending 31 March 2024 to $24.2 million. That was up from $17 million over the same quarter of 2023.

Medadvisor’s gross profits for the quarter increased by an even more impressive 48.5% to $15.3 million.

The positive sentiment following this quarterly update seemed to intensify over the following month. In May, Medadvisor followed up this quarterly update with some guidance for the full 2024 financial year. The company revealed that it is expecting to bring in $120-$123 million in revenues over FY24, which would be a huge improvement over the $98 million it saw over FY23.

The ASX healthcare stock is also anticipating to book its first-ever net profit after tax in FY24. It has told investors to expect a net profit of between $500,000 and $800,000 for the year, which again is a massive improvement over FY23’s net loss of $11.3 million.

So now it’s probably becoming clear why Medadvisor has become such a sought-after stock on the ASX in recent months.

EBOS buys up Medadvisor shares

But it’s not just ordinary investors that seem keen on this ASX healthcare stock. An announcement earlier this month confirmed that another healthcare stock in EBOS Group Ltd (ASX: EBO) has been buying up shares in Medadvisor. The ASX filing revealed that EBOS has recently acquired just over 27.5 million shares of Medavisor, increasing its stake in the company to 9.8%.

Here’s how EBOS explained its move:

EBOS initially acquired a 14.1% interest in MedAdvisor in October 2017, which has been diluted by subsequent share issuances.

EBOS regards its shareholding in MedAdvisor as an investment and does not intend to make a change of control proposal in respect of MedAdvisor.

So it seems that Medadvisor’s recent financial statements are largely behind this ASX healthcare stock’s remarkable ASX run in recent months. It probably doesn’t hurt Medadvisor shares’ fortunes that EBOS is buying up additional stock either. Let’s see what FY25 has in store for this ASX high flyer.

The post Up 127% in 2024, why this ASX healthcare stock is surging again this month appeared first on The Motley Fool Australia.

More reading

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• 5 things to watch on the ASX 200 on Tuesday
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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended MedAdvisor. 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.

On Monday, the S&P/ASX 200 Index (ASX: XJO) started the week in a disappointing fashion. The benchmark index fell 0.75% to 7,763.2 points.

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

ASX 200 expected to rebound

The Australian share market is expected to rebound on Tuesday following a decent start to the week on Wall Street. According to the latest SPI futures, the ASX 200 is poised to open the day 22 points or 0.3% higher. On Wall Street, the Dow Jones was down 0.1%, but the S&P 500 rose 0.1%, and the Nasdaq pushed 0.3% higher. The latter two indices closed at all-time highs.

Buy Evolution shares

The Evolution Mining Ltd (ASX: EVN) share price could be undervalued according to analysts at Goldman Sachs. This morning, the broker has reiterated its buy rating on the gold miner’s shares with an improved price target of $4.15. Ahead of the release of its quarterly update, the broker said: “Following the production update in mid-June, we expect FY24 production to be in-line with implied guidance of ~723koz. With reduced uncertainty over the medium-term, particularly following Northparkes/Cowal site visits, our expectations for ~750koz/75kt of gold/copper production appear consistent with market expectations.”

Oil prices tumble

It could be a poor session for ASX 200 energy shares Santos Ltd (ASX: STO) and Karoon Energy Ltd (ASX: KAR) after oil prices pulled back overnight. According to Bloomberg, the WTI crude oil price is down 1.1% to US$82.26 a barrel and the Brent crude oil price is down 1% to US$85.66 a barrel. Traders were selling oil after assessing the impact of tropical storm Beryl.

Sell IGO shares

IGO Ltd (ASX: IGO) shares are a sell according to analysts at Bell Potter. This morning, the broker has downgraded the battery materials miner’s shares to a sell rating and cut its price target to $5.15 (from $7.60). It commented: “In our view there remains considerable further short-term downside risk to the share price if sentiment deteriorates further.”

Gold price falls

It looks like ASX 200 gold miners Gold Road Resources Ltd (ASX: GOR) and Regis Resources Limited (ASX: RRL) could have a tough session on Tuesday after the gold price tumbled overnight. According to CNBC, the spot gold price is down 1.3% to US$2,366.7 an ounce. Traders were selling gold after risk appetite grew and demand for safe havens reduced.

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 no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. 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 Wesfarmers Ltd (ASX: WES) share price just completed a banner financial year.

Shares in the S&P/ASX 200 Index (ASX: XJO) retail stock – whose subsidiaries include global household names like Bunnings Warehouse, Kmart Australia, Officeworks and Priceline – closed out FY 2023 trading at $49.34.

On 28 June, the last trading day of FY 2024, shares finished the day changing hands for $65.18 apiece.

That put the Wesfarmers share price up a whopping 31.1% over the 12 months, as shown in the chart below. For some context, the ASX 200 gained 7.8% over this same period.

And that strong performance doesn’t include the two fully franked dividends Wesfarmers paid out over the financial year. Wesfarmers shares currently trade on a trailing dividend yield of 2.9%.

Here’s why ASX 200 investors sent the retail stock soaring in FY 2024.

Why did the Wesfarmers share price skyrocket in FY 2024?

The strong run higher for the Wesfarmers share price was driven by equally strong underlying performances from most of its core business segments.

The company reported its full-year results for FY 2023 on 25 August. These results are relevant to the past 12 months’ performance as they were released well into FY 2024 and impacted the share price over the 2024 financial year.

Highlights of those results included an 18.2% year-on-year increase in revenue to $43.5 billion, while net profit after tax (NPAT) was up 4.8% to $2.5 billion. Also really drawing analyst interest was the 81.6% boost in the company’s operating cash flow, which hit $4.2 billion.

With these strong metrics in the background, management boosted the full-year dividend by 6.1% to $1.03 a share.

“Wesfarmers’ financial results were underpinned by strong divisional earnings growth of 12.9% for the year, as the group’s operating businesses continued to respond well to trading and market conditions,” managing director Rob Scott said on the day.

ASX 200 investors clearly took note. The Wesfarmers share price gained 8.6% over the three trading days in August following the results announcement.

And the company didn’t disappoint with its half-year results either.

Wesfarmers reported its H1 FY 2024 results on 15 February, the most recent price-sensitive announcement out from the company.

Once more, investors were greeted with strong growth metrics, sending the ASX 200 retail stock up 5.0% on the day.

Highlights included a 0.5% year-on-year increase in half-year revenue to $22.7 billion and an NPAT up 3.0% to $1.4 billion.

Operating cash flows also continued to impress, increasing 47% from H1 FY 2023 to $2.9 billion.

This saw management lift the interim dividend by 3.4% to 91 cents a share.

And in a promising sign for the full FY 2024 results, management noted, “For the first five weeks of the second half of the 2024 financial year, Kmart Group has continued to deliver strong sales growth.”

As for FY 2025, the Wesfarmers share price was trading at $66.10 at the close on Monday. That’s up almost 1.5% in the nascent new financial year.

The post The Wesfarmers share price rocketed 32% in FY 2024! Here’s how appeared first on The Motley Fool Australia.

More reading

• How ASX 200 retail shares just got a boost from ‘watchful shoppers’
• ASX passive income: How to make $1,000 per month
• What is the outlook for ASX 200 dividend shares in FY25?
• Can Wesfarmers shares keep beating the ASX 200 index?
• 3 reasons to buy Wesfarmers shares like there’s no tomorrow

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

FY24 was a banner year for ASX artificial intelligence (AI) shares — and not just in Australia. AI was a global phenomenon as stock market indices around the world were also driven by large investments in AI shares that could potentially shape our future.

Here in Australia, companies like Dicker Data Ltd (ASX: DDR), Life360 Inc (ASX: 360), and Megaport Ltd (ASX: MP1) are leading the pack in very interesting ways.

These companies have not only delivered impressive financial performance but also positioned themselves at the forefront of AI technology integration and innovation.

Here’s a closer look at the top 3 ASX AI shares in FY24, based on share price movement.

ASX AI shares perform in FY24

Dicker Data Ltd (ASX: DDR)

Dicker Data comes in at third place on the list of top ASX AI shares. Investors started buying Dicker Data shares at the start of FY24 when the stock was priced at $8.20 apiece. The ASX AI share secured an 18% gain as the FY24 year came to a close.

It shot to highs of $12.25 by December before consolidating gradually towards its current level, trading at $10.21 apiece at the close on Monday.

Dicker Data made its mark in the AI space by strategically distributing AI-capable hardware and software. The company facilitates the “AI transition” for numerous businesses by supplying critical tech components from top manufacturers.

In FY24, Dicker Data enhanced its position through key partnerships and an expanded product range that supports companies implementing AI.

Goldman Sachs rates the stock a buy with a $9.86 price target, implying a 3.5% upside potential.

Megaport Ltd (ASX: MP1)

Second on the list of ASX AI shares in focus today is Megaport. Its share price hit a high of $15.39 in March as investors went on a feeding frenzy for shares in the AI sector.

Over the 12 months to June 28, Megaport rallied from $7.22 per share to $11.22 apiece, eclipsing a total gain of 55%. Shares in Megaport closed on Monday trading at $11.17.

Like the other two ASX AI shares, Megaport has unique exposure to AI. The company offers a Network as a Service (NaaS) model that is crucial for businesses adopting new technologies.

In its most recent quarterly update, the ASX AI share grew sales 30% year over year, fueled by increasing demand for its services.

With plans to enter new markets and upgrade its platform, Megaport might be poised for further growth in FY25. Citi thinks so, recently rating Megaport a buy with a $16.05 per share price target.

After its FY24 run, the stock now trades at a price-to-earnings ratio (P/E) of more than 192.59 times.

Life360 Inc (ASX: 360)

In first place — and the top-performing ASX AI share in terms of share price – is Life360. In FY24, Life360 showed that AI can enhance safety and connectivity for families worldwide through its mobile app of the same name.

As a reminder, the company’s AI tools provide real-time location updates, safety alerts while driving, and rapid emergency responses, securing a place in the lives of millions.

The ASX AI share finished the financial year at $16.37 apiece after starting the period at $7.60 – a more than 115% jump.

Most of this came in the second half of the year, as seen in the chart below. The Life360 share price closed at $16.05.

This reflected a year of significant growth driven by its AI innovations in personal security.

Life360’s revenues were up 15% year over year in Q1 due to a jump in premium subscriptions. It booked US$78.2 million at the tip line, with the expansion of its safety features said to have drawn more users but also sharply cut churn rates.

Bell Potter rates the stock a buy with a $17.75 price target.

ASX AI shares in focus

It’s no secret investors are focused on ASX AI shares as emerging technologies sprout in the space. Investment returns have been stellar, but there could be plenty of speculation in the mix as well.

As always, remember to conduct your own due diligence.

The post Here’s the 3 best ASX artificial intelligence (AI) shares of FY24 appeared first on The Motley Fool Australia.

More reading

• 10 ASX shares to buy in FY25
• The best ASX 200 share of each market sector in FY24
• Here’s the outlook for 3 ASX artificial intelligence (AI) shares in FY25
• Shares vs. property: Which delivered the best growth in FY24?
• Leaders and laggards of the ASX market sectors in FY24

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group, Life360, and Megaport. The Motley Fool Australia has positions in and has recommended Dicker Data. The Motley Fool Australia has recommended Megaport. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Flight Centre Travel Group Ltd (ASX: FLT) share price closed out the financial year just past in the green. Though the S&P/ASX 200 Index (ASX: XJO) travel stock couldn’t quite match the performance of the benchmark index.

Shares in the travel agent closed out FY 2023 at $19.05. On 28 June, the last trading day of FY 2024, shares ended the day changing hands for $20.18 apiece.

That saw the Flight Centre share price up 5.9% over the 12 months.

For some context, the ASX 200 gained 7.8% over this same period.

Now, that doesn’t include the two fully franked dividends the company paid out over the year, totalling 28 cents a share.

FY 2024 saw the return of Flight Centre’s dividends. Those were last paid in 2019 and suspended after the outbreak of the global pandemic brought domestic and international travel to a standstill in 2020.

What were ASX 200 investors considering in FY 2024?

Flight Centre reported its full-year FY 2023 results on 30 August.

Highlights included a 127% year on year increase in revenue to $2.3 billion. And after posting a loss before tax of $378 million in FY 2022, the company posted a $70 million profit before tax. This helped it end the last financial year with cash holdings of $1.3 billion.

“After an incredibly challenging period, we are pleased to report material profit and sales uplifts in improved conditions during FY23, leading to stronger shareholder returns,” managing director Graham Turner said of the results.

Despite the strong growth metrics, the Flight Centre share price closed down 2.8% on the day.

Fast forward to 28 February, and we find the ASX 200 travel stock’s results for H1 FY 2024.

Flight Centre reported a 565% year on year increase in half-year underlying profit before tax of $106 million. That was spurred by a 15% lift in total transaction value (TTV) of $11.3 billion.

And management reported the company was on track to beat its record FY 2019 $23.7 billion TTV result in FY 2024.

Once more, investors looked to have been expecting even more, sending the Flight Centre share price down 3.9% on the day.

That’s what ASX 200 investors learned over the financial year just past.

Now, what might they expect from the Flight Centre share price in FY 2025?

What’s next for the Flight Centre share price in FY 2025?

With six trading days of FY 2025 already in the bag, the Flight Centre share price is up 5.85% in the emerging new financial year, closing yesterday at $21.36 a share.

As for what we might expect in the months ahead, a lot of this will hinge on how a range of macroeconomic factors come together to impact global travel demand.

Airline ticket prices are one to watch. These will, in part, be affected by the costs of jet fuel, which represent around 20% of airlines’ annual expenses.

The trajectory of inflation and interest rates, both in Australia and internationally, will also influence the overall levels of travel demand. As will the Aussie government’s cost of living relief measures and the extra cash most workers can expect in FY 2025 from the new stage three tax cuts.

Should inflation and interest rates surprise to the downside, I suspect the Flight Centre share price will benefit from an uptick in travellers.

Turning to recent broker coverage, Morgans has a bullish outlook for the company in FY 2025.

The broker recently stated that, “FLT has the greatest risk, reward profile of our travel stocks under coverage.”

Morgans has an add rating on Flight Centre stock, with a $27.27 share price target.

That’s almost 28% higher than yesterday’s closing price.

The post Up 6% in FY 2024, what’s ahead for the Flight Centre share price in FY 2025? appeared first on The Motley Fool Australia.

More reading

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• Here are the top 10 ASX 200 shares today
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• These are the 10 most shorted ASX shares

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