Category: Stock Market

Investing in ASX shares to build a deposit, rentvesting, and co-owning with parents or partners are among the inventive ways that young Australians are gaining a foothold on the property ladder.

Research from Westpac shows that 56% of first-time home buyers are planning to buy with a partner, compared to 40% three years ago.

Three in four young buyers say they are willing to compromise on location, up 9% from three years ago.

One in two first-time home buyers is considering rentvesting instead of owner-occupation, whereby they buy an affordable property to lease out and rent a home for themselves wherever they want to live.

Westpac managing director of mortgages Damien MacRae said first home buyers “are becoming more ruthless with their goals”.

McRae said:

They understand it’s a big task, but they are determined to break into the market and are willing to compromise to get there.

Creative pathways to home ownership

It’s little wonder young people are compromising or getting creative to help them buy a home sooner.

For some, it feels like an impossible dream, particularly when it now takes 11.1 years to save a deposit for a typical house and 8.5 years for an apartment, according to an ANZ/CoreLogic affordability report.

It also takes 52.7% of a person’s income to service an average home loan for houses and 40.5% for apartments, which is well above the mortgage stress threshold of 30%.

Co-ownership with partners or parents

In addition to buying with partners, many first home buyers are accepting various kinds of help from the Bank of Mum and Dad, including co-ownership.

Australian parents are acutely aware of the challenges of housing affordability for their children today.

In fact, a recent survey showed three in four Australians are planning to leave some of their superannuation behind as an inheritance for their loved ones.

One of the reasons is to help their kids into home ownership, as one respondent explained:

The cost of buying a house is beyond reach for younger people now. A little help from me when I die might help pay off their mortgage and allow them to retire at an appropriate age.

A separate investor survey shows helping their children or other family members financially is a key motivation for 33% of Gen Xers and 25% of baby boomers.

Investing in ASX shares to save the deposit

Saving a home deposit is a significant motivation for investing in ASX shares.

The 2023 ASX Australian Investor Study, which surveyed more than 5,500 Australians, found that buying a home to live in was the main goal of 16% of investors and 31% of intending investors.

An Australian Housing and Urban Research Institute (AHURI) study confirms the trend:

Anecdotally, some people have been turning to other strategies to accumulate wealth to achieve home ownership, including share investing and property investing.

The study found ASX shares were the most popular type of stock among young investors, with ASX exchange-traded funds (ETFs) coming in second.

By the way, online brokerage platform Selfwealth Ltd (ASX: SWF) reports the most popular ASX shares traded in April were BHP Group Ltd (ASX: BHP) and Woodside Energy Group Ltd (ASX: WDS).

The top ASX ETFs traded were Vanguard Australian Shares Index ETF (ASX: VAS) and Vanguard MSCI Index International Shares ETF (ASX: VGS).

Rentvesting

Rentvestors typically purchase their first property in an affordable suburb on the city outskirts and then lease it out, using the rental income to help them pay the holding costs and mortgage.

Meanwhile, they rent a home for themselves in a trendy inner-city location that provides the lifestyle they want.

They hope their investment property will deliver enough capital growth to fund the deposit on a home in a location they want to live in later down the track when they ‘settle down’.

Rentvesting is a forced choice for some first-time buyers as it’s the only way they can get finance.

It can be easier to get an investment loan than an owner-occupier loan because the rental income forms part of the banks’ serviceability and income assessments.

The Australian Bureau of Statistics (ABS) began tracking rentvesting in 2019. Last year, 7,412 first-time buyers took our investment loans, according to ABS lending finance data.

Buying a first home with government help

Thousands of first home buyers are also taking up government help to buy their first residence.

Since May 2022, more than 110,000 Australians have taken advantage of the First Home Guarantee Scheme, which allows them to buy with a 5% deposit and avoid lenders’ mortgage insurance.

The Federal Government is currently trying to get its new Help to Buy equity scheme through Parliament.

It says Help to Buy would allow 40,000 buyers to purchase a first home via a shared equity arrangement.

The government would provide up to 40% of the purchase price of new homes and 30% of the price of established homes.

The states and territories also offer help for first home buyers, including stamp duty exemptions and concessions and grants.

In November 2023, Queensland doubled its First Home Owner Grant to $30,000 for people buying or building a new home under $750,000 until 30 June 2025.

The post Buying ASX shares, rentvesting and co-ownership: How young Australians are achieving home ownership appeared first on The Motley Fool Australia.

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Motley Fool contributor Bronwyn Allen has positions in Anz Group, BHP Group, Vanguard Australian Shares Index ETF, and Woodside Energy Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Vanguard Msci Index International Shares ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Core Lithium Ltd (ASX: CXO) shares have had a very disappointing 12 months.

During this time, the lithium miner’s shares have lost approximately 87% of their value.

Unfortunately, despite this material decline, one leading broker believes there’s potential for the lithium stock to fall further.

Who is bearish on Core Lithium shares?

Goldman Sachs remains very bearish on Core Lithium.

According to a recent note, its analysts have a sell rating and 11 cents price target on the company’s shares.

Based on the latest Core Lithium share price of 13.5 cents, this implies potential downside of approximately 18.5% for investors over the next 12 months.

What did the broker say?

Goldman has laid out several reasons why it believes that investors should be avoiding Core Lithium’s shares even after their sharp decline.

The first reason that Goldman has given to justify its sell rating is the company’s valuation. It notes that it still looks expensive at current levels. The broker said:

CXO appears relatively expensive trading at a premium on ~1.1x NAV and an implied LT spodumene price of ~US$1,200/t (peer average ~1.05x & ~US$1,250/t (lithium pure-plays ~US$1,140/t)), with the lowest average operating FCF/t LCE on a more moderated/deferred production restart/ramp up.

Another reason for its bearish view is its belief that that are a lot of risks in respect to the restart of mining operations. It adds:

In the current pricing environment, a mine restart looks highly unlikely ahead of the next wet season, in our view and, given the Grants open pit has ~12 months of life, likely tied to a development decision on BP33 (with its own funding risks) to support a new processing contract, increasing the risk of a longer gap in production. Following a restart, production risk in a steady state operation remains as the Finniss project moves through ramp ups on project complexity moving between different open pits and underground configurations.

A third and final reason is its belief that Core Lithium’s resource growth may take longer than expected now. It concludes:

Though further exploration is underway, and while potential resource expansion could be promising (including revisiting the gold, uranium and base metal exploration projects), with resource extension likely at depth/from new areas, we see limited near-term upside, where further meaningful exploration is now also likely longer dated on falling lithium prices, particularly with a near-term restart of the operation now unlikely in the near-term.

All in all, Goldman thinks investors should be staying clear of the company for now. It prefers IGO Ltd (ASX: IGO) for lithium exposure and has a buy rating and $8.10 price target on its shares.

The post 3 key reasons to sell Core Lithium shares 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 post Here are the top 10 ASX 200 shares today appeared first on The Motley Fool Australia.

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• 5 things to watch on the ASX 200 on Thursday

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 Domino’s Pizza Enterprises, Netwealth Group, PolyNovo, Pro Medicus, and Reliance Worldwide. The Motley Fool Australia has positions in and has recommended Netwealth Group. The Motley Fool Australia has recommended Collins Foods, Domino’s Pizza Enterprises, 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 are on the hunt for some ASX 200 blue chip stocks to buy, then you may want to look at the two in this article.

They may come from very different sides of the market, but they share one thing in common. That is that brokers rate them highly and are tipping them to rise strongly from current levels.

Here’s what they are saying about these stocks:

Coles Group Ltd (ASX: COL)

Analysts at Morgans think that Coles could be a quality ASX 200 blue chip stock to buy now. Particularly if you’re looking for a combination of market-beating gains and an attractive dividend yield. Morgans commented:

In our view, the ongoing scrutiny on the supermarkets has affected short term sentiment in the sector, which we believe creates a good buying opportunity in COL. While Liquor sales remain soft, we expect the core Supermarkets division (~92% of earnings) to continue to be supported by further improvement in product availability, reduction in total loss, greater in-home consumption due to cost-of-living pressures, and population growth.

The broker has an add rating and $18.95 price target on its shares. This implies potential upside of 17% for investors over the next 12 months.

Making things even sweeter, the broker is forecasting fully franked dividend yields of 4.1% in FY 2024 and 4.3% in FY 2025. This boosts the total 12-month return from this blue chip to beyond 20%.

Mineral Resources Ltd (ASX: MIN)

If you’re not averse to investing in the mining sector, then Bell Potter thinks that Mineral Resources could be an ASX 200 blue chip stock to buy.

It is a mining and mining services company with operations and development projects across energy, iron ore, and lithium.

Bell Potter rates the company highly due to its earnings diversification and growth potential. It explains:

In contrast to its peers, MIN completes everything from engineering, to construction, to all aspects of operations in-house. Our Buy view is underpinned by MIN’s earnings diversification, strong insider ownership, clearly articulated strategies, expertise in contracting and internal growth options at Onslow as well as potential lithium expansions including into downstream. All up, MIN offers diversified exposure to steady income streams from the contracting business and market-driven commodity exposure coupled with earnings derived from both lithium and iron ore.

The broker has a buy rating and $85.00 price target on its shares. This implies potential upside of 19% for investors from current levels. And with Bell Potter expecting a ~1% dividend yield in FY 2025, the total potential return stretches to 20%.

The post Buy these ASX 200 blue chip stocks for 20% returns appeared first on The Motley Fool Australia.

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

The Sonic Healthcare Ltd (ASX: SHL) share price dropped to a new 52-week low today of $23.81. When directors decide to buy shares, it can be a signal for other investors to buy too. There has been yet another director investment after the company’s disappointing earnings update.

Earlier this week, my colleague Kate O’Brien reported that directors had bought Sonic Healthcare shares.

Earnings update recap

Sonic Healthcare disclosed that it’s now expecting to generate earnings before interest, tax, depreciation and amortisation (EBITDA) of $1.6 billion and $8.9 billion of revenue in FY24. That compares to previous EBITDA guidance of between $1.7 billion and $1.8 billion.

Organic revenue continued to be strong, with 6% growth for the four months to 30 April 2024, after a 6% increase in the first half of FY24.

However, profit growth has been lower than expected, partly due to inflationary pressures on the business exacerbated by currency exchange headwinds. Profit margin improvements have been delayed, though this will “contribute to further earnings growth” in FY25. The company expects inflation pressures to ease going forward.

After providing this update and seeing the Sonic Healthcare share price reaction, directors decided to buy.

New director investment

Sonic announced today that director Christine Bennett has bought 1,000 more Sonic Healthcare shares on the market at a price of $24.01 on 29 May 2024. This suggests the total investment was worth approximately $24,000.

This brings Bennett’s total ownership of the ASX healthcare share to 5,100 Sonic Healthcare shares. That means her holding increased by around 25%, which is a sizeable increase.

There are many reasons why a director may decide to sell their shares: a tax bill, buying a property, a divorce and so on. But, there’s typically only one reason a leadership figure buys shares on the market: they think it’s good value.

Is the Sonic Healthcare share price a buy?

I think it is – I bought Sonic Healthcare shares recently and it’s even cheaper now.

There are several positives that could support the ASX healthcare share.

First, it has made several acquisitions that can help boost revenue and profit in the future, particularly with acquisitions in Germany and Switzerland.

Second, it has invested in businesses that can help diagnose patients, namely AI and microbiome testing

Third, the business is still seeing positive organic revenue growth. Once cost inflation reduces, Sonic’s operating profit could continue to increase at an adequate rate to reinvigorate the market about the company.

Sonic Healthcare is already a sizeable position in my portfolio, so I’m not planning to buy shares imminently. But if I didn’t own shares, I’d be using this time to invest.

The post Directors keep buying beaten-up Sonic Healthcare shares. Should you? appeared first on The Motley Fool Australia.

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

S&P/ASX 200 Index (ASX: XJO) shares are down 0.44% to 7,631.5 points on Thursday amid several broker upgrades within the benchmark index this week.

Let’s take a look at four of them.

4 ASX 200 shares attracting upgrades this week

ASX 200 property share to outperform, says broker

As reported in The Australian, Macquarie has raised its rating on ASX 200 property share HMC Capital Ltd (ASX: HMC) to outperform. It has placed a 12-month price target of $7.97 on HMC Capital shares.

HMC Capital shares enjoyed a run on Monday after the company announced the completion of a $100 million capital raise. The stock rose 4.77% and was one of the top-performing shares of the day.

The HMC Capital share price is $7.17, up 0.14% today and up 17.9% in the year to date.

Broker ‘cautiously optimistic’ on Domino’s Pizza shares

Citi has upgraded ASX 200 consumer discretionary share Domino’s Pizza Enterprises Ltd (ASX: DMP) from neutral to buy. The 12-month price target remains unchanged though at $44.50.

Citi analyst Sam Teeger said (courtesy The Australian):

We have come away from the France part of the Europe investor tour with greater understanding of why Domino’s has struggled and are cautiously optimistic that better days could be ahead in FY25.

The company released its European strategy on Monday.

The Domino’s Pizza share price is $37.77, up 1.68% today and down 36.3% in the year to date.

CLSA has also upgraded Domino’s Pizza shares to a buy with a price target of $46.50.

Price target raised 28% on ASX 200 healthcare share

According to The Australian, Wilsons has upgraded ASX healthcare share Fisher & Paykel Healthcare Corporation Ltd (ASX: FPH) to overweight and raised its price target by 28% to $30.

The broker was impressed by the company’s FY24 report released yesterday.

Investors liked it too and rewarded the company with a 3.69% bump to a new 52-week peak of $27.50 per share. This made it the best-performing stock of the day.

The Fisher & Paykel share price is $26.31, down 0.30% today and up 19.3% in the year to date.

Broker says hold amid director buying the dip

Jefferies has upped its rating on Eagers to hold with a 12-month share price target of $10.40.

The Eagers Automotive Ltd (ASX: APE) share price is $10.08, down 0.30% today and down 30.5% in the year to date.

Non-executive director Nicholas Politis has been buying the dip on the ASX 200 share. He purchased 200,000 shares on-market last Wednesday’, paying an average price of $10.47.

The post 4 ASX 200 shares receiving broker upgrades 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 Bronwyn Allen has positions in Domino’s Pizza Enterprises and Macquarie Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Domino’s Pizza Enterprises and Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool Australia has recommended Domino’s Pizza Enterprises and Eagers Automotive Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Although sliding today alongside the wider market, the Yancoal Australia Ltd (ASX: YAL) share price has been a stellar performer over the past year.

12 months ago you could have snapped up shares in the All Ordinaries Index (ASX: XAO) coal stock for $4.76 apiece. At the time of writing those same shares are swapping hands for $6.48, up 36.1%.

And that doesn’t include the 69.5 cents a share in fully franked dividends the coal miner has paid out over the year.

If we add those back in, then the Yancoal share price has gained an accumulated 50.7% in 12 months, with some potential tax benefits from those franking credits.

Here’s what’s been driving the coal miner’s success.

What’s been lifting the Yancoal share price?

The Yancoal share price has smashed the benchmark returns over the past year despite significantly lower thermal and metallurgical coal prices than it received in 2022 and the first half of 2023.

Speaking at today’s annual general meeting (AGM), Yancoal CEO David Moult noted coal prices were impacted by a slowing global economy and mild winter in the northern hemisphere. The lower demand came amid an uptick in supplies, with Aussie coal exports increasing 22% in 2023 and Indonesia’s exports rising 12%.

Yancoal itself spent 2023 focusing on its mine recovery plans. The ASX coal stock still managed to increase output in each quarter, with fourth-quarter production marking the highest rate in three years.

As for why investors have been bidding up the Yancoal share price, Moult said:

For 2023, we were pleased to report $7.8 billion in revenue, $3.5 billion of operating earnings before interest, taxes, depreciation and amortisation (EBITDA), and $1.8 billion in after tax profit.

Atop those strong metrics, Yancoal held a whopping $1.4 billion of cash as at 31 December and has increased its cash holdings since then.

And this came after the coal miner repaid its final costly loans.

“The board elected to prepay the last of our interest-bearing loans during the first half of 2023,” Moult said. “In total, we repaid more than US$3.0 billion of loans since late 2021. The loan prepayments saved us almost AU$300 million dollars in finance costs last year.”

But the Yancoal share price isn’t immune to the rising costs impacting most industries and households across Australia, reporting cash operating costs of $96 per tonne.

According to Moult:

While we are focused on minimising our cash operating costs, inflation factors including labour, explosives, electricity and spare parts, incurred over recent years, may only partially unwind, if at all.

That said, we have re-established our position at the low end of the operating cost curve, where we see our natural competitive advantage. Our implied operating cash margin for the year was $115 per tonne.

Now what?

With the Yancoal share price up 36% over the past 12 months (50% including dividends), what can investors expect next?

Shedding some light on that, Moult said, “This year, we aim to produce at a level similar to the second half of 2023.”

Yancoal’s 2024 guidance is for 35 million to 39 million tonnes of attributable saleable production, with a second-half weighting to the production profile.

As for the future costs that could impact the performance of the Yancoal share price, Moult said:

We aim to bring the cash operating costs per tonne down from the full-year 2023 level and are focused on output given the direct relationship between the volumes we produce and the per tonne cash operating costs we report.

The miner’s cash operating costs guidance for 2024 is $89 to $97 per tonne.

The post How the Yancoal share price soared 36% in a year and what to expect next appeared first on The Motley Fool Australia.

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

ASX gold stocks have been some of the most sought-after investments on the Australian share market in 2024. Thanks to surging gold prices, investors have been chasing gold shares like Newmont Corporation (ASX: NEM) with a vengeance this year.

It’s not hard to see why. Since the end of February, Newmont shares have rocketed a whopping 37% or so. The story is similar with other gold miners like Gold Road Resources Ltd (ASX: GOR), Silver Lake Resources Ltd (ASX: SLR) and Northern Star Resources Ltd (ASX: NST).

But next week, Newmont shares will be in the spotlight. That’s because this ASX gold-mining giant is set to trade ex-dividend for its latest shareholder payment on Monday, 3 June.

Newmont’s dividend payments work a little differently from those of most other ASX gold stocks — differently from most other ASX shares, in fact.

This is due to Newmont’s status as an ASX CDI (CHESS Depository Interest). Newmont’s ASX shares actually represent the company’s primary listing on the US markets.

Newmont shares are about to pay out

Thanks to Newmont’s acquisition of the former king of the ASX gold pack, Newcrest Mining, last year, ASX investors who owned Newcrest shares at the time were issued Newmont CDIs on the ASX. These CDIs aren’t real ASX shares, but represent ownership of the company’s primary stock, listed on the New York Stock Exchange as Newmont Corporation (NYSE: NEM) shares.

Owners of Newmont’s ASX shares are still entitled to everything Newmont gives its shareholders, including dividend payments. But since Newmont is a US-based company, these dividends are a little different. For one, they no longer come with franking credits attached. They are also paid out quarterly rather than the six-month interval, which is the norm on the ASX.

The latest of these quarterly dividends is due to hit investors’ bank accounts next month on 27 June. However, if anyone who wishes to receive this dividend who doesn’t already own Newmont stock, time is running out.

Since the company will be trading ex-dividend for this upcoming payment on Monday next week, the last day you can buy Newmont shares with the right to receive the latest dividend attached is tomorrow, 31 May. Anyone who buys this stock from Monday onwards misses out this time.

The company’s dividend will be worth 25 US cents per share (38 cents at current exchange rates). It will be the third dividend that Newmont’s ASX investors will enjoy since the company joined the Australian markets.

This payment is between Newmont’s December dividend of 42.6 cents per share and March’s payment of 26.5 cents per share.

On an annualised basis, it would give Newmont shares a dividend yield of 2.43% at current pricing.

Time to buy?

You might think that today is a great day to buy Newmont shares, bag this dividend, and perhaps sell out later with some free money in your pocket.

Well, unfortunately, there’s no free lunch here. When a company trades ex-dividend, its shares usually fall by whatever the value of the dividend that has just been lost was.

As such, you can either buy more expensive Newmont shares today with the dividend rights attached, or you can buy the cheaper shares next week that come without this dividend. You can’t have the cake and eat it too, unfortunate as that may be.

So if you like Newmont as a business and a gold miner, by all means buy the shares today. But if you’re chasing a quick buck, just hit up the casino instead.

The post Newmont shares are about to trade ex-dividend. Time to buy? appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has positions in Newmont. 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.

If the share market were a sport, Nvidia Corp (NASDAQ: NVDA) stock would be in the running for MVP of 2024. The computer chip technology company extended its record share price last night, reaching US$1,154.92 before settling at US$1,148.25.

Catapulted by the burgeoning demand for hardware to power artificial intelligence, the US-based graphics card maker has shot up the ranks of most valuable companies. Today, Nvidia is worth US$2.82 trillion, hot on the heels of Apple Inc (NASDAQ: AAPL) and Microsoft Corp (NASDAQ: MSFT) for the number one spot.

Only four short years ago, Nvidia’s market capitalisation stood at US$214.5 billion, one-thirteenth of what it is today. With the stock almost tripling in value in the past year alone, I think I’d be better off buying a certain ASX stock instead.

Buffett senses are tingling on Nvidia stock’s high

Don’t get me wrong… I believe Nvidia is a phenomenal company. Not that it matters from an investment perspective, but I’ve been on ‘Team Green’ for GPUs (graphic processing units) since saving enough money to buy my first high-performance gaming computer in 2015.

I toyed with the idea of investing in Nvidia stock many times over the years. In 2018 (up 1,900% since), in 2021 (up 400% since), and in 2022 (up 580% since). Not once did I pull the trigger, opting for Advanced Micro Devices Inc (NASDAQ: AMD) in its place. Betrayal of Team Green, I know.

But now, I can’t help but think there’s a bit of euphoria surrounding Nvidia.

I get a little nervous when a company’s stock price chart looks like the one below. If you’re a long-term investor, stock price action shouldn’t dictate whether to buy or sell. But it can tell you about investors’ mentality and mood.

A timeless quote from the legendary Warren Buffett is, “Be fearful when others are greedy, and be greedy when others are fearful”.

It’s rare now to hear anything but optimism about the demand for AI and the boost it will generate for Nvidia stock. My inner Buffett is detecting a euphoric vibe among investors. A ‘no questioning it, just believe!’ frame of mind.

Meanwhile, my mind is contemplating the ‘what ifs’…

What if demand for accelerated computing drastically tapers at a point?

What if Nvidia’s margins revert back to around 25% instead of its recent 53%?

What if Taiwan Semiconductor Manufacturing Co Ltd (NYSE: TSM), aka TSMC, lifts prices?

Personally, I think Nvidia’s growth is murkier now than it was two or three years ago. And while a 42 times forward earnings multiple mightn’t be the steepest ask, I’m not sure those earnings are sustainable.

Relocating the greed to where there’s fear

Channelling my inner Buffett again, I’m inclined to invest where fear has engulfed a good company. Often, this provides a greater margin of safety, minimising the downside and increasing the upside.

I genuinely believe Corporate Travel Management Ltd (ASX: CTD) is an ideal current alternative to Nvidia stock. It’s a completely different business, providing travel management solutions. However, like Nvidia, it is highly profitable, growing at an above-market rate, and is founder-led.

The difference is that this ASX stock trades at a price-to-earnings (P/E) ratio of 17 times, and its shares are out of favour — down 37% over the past 12 months. Weaker full-year FY24 guidance set the selling into motion on 21 February 2024.

I reckon the fear is overdone.

In my opinion, buying Corporate Travel Management now is more like buying Nvidia stock in 2021 or 2022 before the boom. It may not achieve the same meteoric gains, but I think there is less of a rosy outlook already baked into this ASX stock than Nvidia.

The post Which ASX stock I’d rather buy than Nvidia at $1,148 per share appeared first on The Motley Fool Australia.

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• 1 ASX growth stock that turned $10,000 into $21,000 in less than 2 years
• Prediction: Nvidia stock will continue to rise…and here’s why
• Joining the revolution: How I’d invest in ASX AI shares right now

Motley Fool contributor Mitchell Lawler has positions in Advanced Micro Devices and Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Advanced Micro Devices, Apple, Corporate Travel Management, Microsoft, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has positions in and has recommended Corporate Travel Management. The Motley Fool Australia has recommended Advanced Micro Devices, Apple, Microsoft, and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

If you have space in your portfolio for some new ASX growth stocks in June, 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:

Flight Centre Travel Group Ltd (ASX: FLT)

The first ASX growth stock that could be a buy in June is travel agent giant Flight Centre. Analysts at Morgans are very positive on the company and believe its transformed business model means it is “well placed over coming years.”

The broker currently has an add rating and $27.27 price target on its shares.

IDP Education Ltd (ASX: IEL)

Goldman Sachs thinks this beaten down language testing and student placement company’s shares are dirt cheap at current levels. While the broker acknowledges that it is facing short term headwinds, it remains very positive on its long term growth. This is thanks to structural tailwinds and its dominant market position.

Goldman has a buy rating and $25.30 price target on its shares.

Life360 Inc (ASX: 360)

Bell Potter thinks this rapidly growing location technology company is an ASX growth stock to buy. Its analysts believe that Life360 has the “potential to leverage its large and growing user base to enter new markets and disrupt the legacy incumbents.” The broker also sees scope for a “re-rating of the stock given the higher multiples of comps.”

It has a buy rating and $17.75 price target on Life360’s shares.

Lovisa Holdings Ltd (ASX: LOV)

Bell Potter is also very bullish on fashion jewellery retailer Lovisa and sees it as a top ASX growth stock to buy.

Its analysts believe that Lovisa can grow its network by 10% per annum between FY 2023 and FY 2034. This is expected to drive strong sales and earnings growth over the next decade.

Bell Potter currently has a buy rating and $36.00 price target on its shares.

TechnologyOne Ltd (ASX: TNE)

Finally, Goldman Sachs is also a fan of this enterprise software provider and sees it as an ASX growth stock to buy. Its analysts highlight that they “see margin expansion resuming from FY24E onwards, which in combination with robust revenue growth should drive a mid-high teens EPS CAGR to FY26E, providing strong earnings visibility.”

The broker has a buy rating and $18.85 price target on Technology One’s shares.

The post Brokers name 5 fantastic ASX growth shares to buy in June appeared first on The Motley Fool Australia.

More reading

• Check out this soaring ASX stock, up 300% in 2 years, with more gains likely to come
• ‘Significant potential’: One unexpected ASX 200 AI share to buy now
• Holidays on hold: How will this affect ASX travel shares?
• Should I buy TechnologyOne shares before they trade ex-dividend on Thursday?
• 4 ASX growth shares to buy to supercharge your portfolio in June

Motley Fool contributor James Mickleboro has positions in Life360, Lovisa, and Technology One. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group, Idp Education, Life360, Lovisa, and Technology One. The Motley Fool Australia has recommended Flight Centre Travel Group, Lovisa, and Technology One. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.