Category: Stock Market

Zip Co Ltd (ASX: ZIP) shares wrapped up FY24 on a high. Over the 12 months to June 28 2024, shares in the buy now, pay later (BNPL) stock soared 256% into the green.

The benchmark S&P/ASX 200 index (ASX: XJO) didn’t even come close to that result.

Investors are eager to know what the future holds for the BNPL player. Especially as gains have continued into the new financial year.

Let’s dive into the factors driving the recent performance and explore the expert outlook for FY25.

Why are Zip shares soaring?

Zip share price performance was impressive through the COVID-19 pandemic years. Investors sent the stock on a meteoric rise to an all-time high of $12.35 per share in February 2021.

They plunged not long after, wiping billions in market capitalisation from the company’s value. The selling continued until October last year when investors returned to buy Zip shares at lows of 25.5 cents per share.

Fast forward to today, and Zip shares have rebounded to their current price of $1.65.

Zip’s business performance under new management has been a major driver of its stock price recently. The company shifted from an aggressive growth strategy to a more sustainable, profitable model, garnering positive sentiment from investors.

Tyndall Asset Management’s James Nguyen highlighted this transformation as a key differentiator from its BNPL peers. Speaking to The Australian Financial Review, Nguyen said:

[Zip] was previously a market darling, capitalised at over $6 billion despite reporting losses of more than $200 million per annum. Higher interest rates, loose credit leading to high bad debts, and a weaker consumer resulted in significant shareholder value losses.

While the macro environment is now more supportive, it is the company-specific turnaround under new management that sets Zip apart from its BNPL counterparts. Growth for growth’s sake has been abandoned, as has its international domination aspirations, and in place is a sustainable, profitable growth strategy.

Nguyen says Zip’s focus on profitability over growth for growth’s sake is paying off. Within 18 months, the company expects to earn nearly $100 million in earnings before interest, tax, depreciation, and amortisation (EBITDA).

Additionally, Apple Inc.’s (NASDAQ: AAPL) decision to cancel its BNPL service in the United States, Apple Pay Later, appears to have increased investor confidence. This reduction in competition could help Zip increase its market share in the lucrative American market.

What’s next for Zip shares in FY25?

UBS and Ord Minnett both maintain buy ratings for Zip shares, setting price targets of $1.55 apiece, respectively.

According to CommSec, the stock is rated a buy from consensus. Out of the seven firms covering Zip, five rate it a buy directly, four say it’s a hold, and one firm rates it a sell.

Looking ahead, Zip’s ability to maintain its profitability focus while growing market share will be crucial, in my view.

One key area to monitor is Zip’s performance in the US market, where it has shown significant growth. Apple’s decision to withdraw from the BNPL race could be a tailwind.

Setting context for this, in its most recent quarterly results, Zip reported a 14.6% year-on-year increase in transaction volume to $2.4 billion despite a 3% rise in active customers to 6 million.

But US revenues were up more than 49% to US$74.3 million, underscored by a 43% growth in transaction volume there.

Foolish takeaway

Zip shares have delivered stellar gains in FY24, locking in triple-digit gains for the year.

As the company continues its transformation under new management, the outlook for FY25 remains promising but requires careful monitoring. As always, remember to conduct your own due diligence.

The post Zip shares FY24 recap: Up 256%, what’s next for FY25? appeared first on The Motley Fool Australia.

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• Zip shares surge 10%, bringing gains to 55% in a month
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• Could Apple’s latest move boost Zip shares?
• Has the Zip share price ‘risen too rapidly’?

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 Zip Co. 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.

A number of ASX 200 gold stocks are pushing higher on Monday. This has led to the S&P/ASX All Ords Gold index rising by an impressive 1.7% in morning trade.

This catalyst for this has been a solid rise in the gold price on Friday night amid interest rate cut hopes.

In addition, a couple of updates have given the shareholders of two ASX 200 gold stocks a reason to smile today. Let’s dig a little deeper into these updates now:

Ramelius Resources Ltd (ASX: RMS)

The Ramelius share price is up 3.5% to $1.98. This morning, this ASX 200 gold stock revealed that it achieved a production record of 293,033 ounces for FY 2024. This means that it has hit the upper end of its upgraded guidance of 285,000 to 295,000 ounces.

Another positive is that management expects its full year all-in sustaining costs (AISC) to be at the lower end of its upgraded guidance range of A$1,550 to A$1,650 per ounce.

This underpinned total free cash flow of A$315.8 million for the 12 months, boosting its cash and gold balance to A$446.6 million. The latter is up from a balance of $272.1 million at the end of FY 2023.

Regis Resources Ltd (ASX: RRL)

The Regis Resources share price is up 6.5% to $1.89. Investors have been buying this ASX 200 gold stock after it released its fourth quarter update.

During the quarter, the operational performance across its Duketon and Tropicana operations continued to recover from the major rain events that occurred in March. This led to Duketon producing 75,600 ounces of gold, resulting in FY 2024 gold production of 289,900 ounces. This is within its FY 2024 production guidance range.

Tropicana, which management notes experienced more significant impacts from the rain, has had a slower recovery. It produced 30,800 ounces of gold, resulting in FY 2024 gold production of 127,800 ounces. This was below its FY 2024 production guidance range.

Nevertheless, this couldn’t stop the gold miner from achieving production of 417,700 ounces of gold for the year. This was within its group production guidance range for the year.

And with Regis Resources now fully unhedged and receiving a $20 million tax refund, it reported a record $109 million increase in its quarterly cash and bullion balance. At the end of the period, its cash and bullion balance was at its highest ever level of $295 million.

The post 2 ASX 200 gold stocks racing higher on record results appeared first on The Motley Fool Australia.

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

The market may be having a subdued start to the week, but that hasn’t stopped one ASX mining stock from rocketing higher today.

At the time of writing, Rex Minerals Ltd (ASX: RXM) shares are up 65% to 45.5 cents.

Why is this ASX mining stock rocketing?

Investors have been scrambling to get hold of the copper and gold developer’s shares after it received and accepted a takeover offer.

According to the release, Rex Minerals has entered into a scheme implementation deed with MACH Metals Australia.

Under the scheme, it is proposed that MACH will acquire all of the shares in Rex Minerals which it does not already own for cash consideration of 47 cents per share. This represents a 71% premium to where the ASX mining stock ended last week and values the company at $393 million.

The release notes that the MACH offer was received following a competitive global partnering process. This process was focused on the $854 million funding and subsequent development pathway for the Hillside Copper-Gold Project in South Australia.

The Rex Minerals board carefully assessed the offer against a range of other alternatives. After taking into account the risks and potential ownership dilution associated with a stand-alone development of Hillside, it decided the offer was the superior option.

As a result, the ASX mining stock’s board unanimously recommends that shareholders support the transaction by voting in favour of it. This is in the absence of a superior proposal and subject to the independent expert’s report.

‘Significant premium’

Rex Minerals’ CEO and managing director, Richard Laufmann, said:

The Transaction provides certainty of value and a significant premium representing a 98% uplift relative to Rex’s 90-day VWAP, as well as the opportunity for Rex shareholders to realise their investment at a 10-year historical share price high. This Transaction also represents a more certain outcome for wider stakeholders in Hillside, including the local community, the South Australian Government and Rex employees who will benefit from the significant financial strength and proven track record of MACH to deliver the successful development of Hillside.

The South Australian Government has been a leader in Australia in support of decarbonisation and copper development. The successful development of Hillside will very much align with their strategy. Subject to approvals, we look forward to working with MACH through to completion and watching them develop the Hillside Project, Australia’s largest fully permitted and shovel ready copper project.

The post Guess which ASX mining stock is rocketing 65% on takeover deal appeared first on The Motley Fool Australia.

More reading

• Could this ASX dividend share offer a huge 11% yield in 2026?
• Zip shares FY24 recap: Up 256%, what’s next for FY25?
• 2 ASX 200 gold stocks racing higher on record results
• Why I’m bullish about this exciting ASX small-cap share
• Is this ASX ETF the best way to invest in Australian property?

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 ASX small-cap share section of the market is full of stocks with the potential to deliver good returns. An ASX tech small cap with a compelling future is particularly exciting because it can deliver higher profit margins.

One such company is Airtasker Ltd (ASX: ART). It claims to be Australia’s leading online marketplace for local services, connecting people and businesses that need work done with people who want to work.

Airtasker shares have been trending higher in the last couple of weeks, as shown in the chart above. I believe there is plenty more to come over the long term.

High gross profit margin

Airtasker has an enormous gross profit margin of more than 90%, which means that almost all of its revenue turns into usable gross profit. With gross profit, the business can spend on growth activities such as advertising and development while also potentially achieving stronger cash flow and better earnings before interest, tax, depreciation and amortisation (EBITDA) margin.

The business is now achieving profit rather than losses, which is an important milestone.

In the third quarter, Airtasker achieved a positive free cash flow of $2.5 million, an improvement of $5.1 million year over year. The group EBITDA was $0.6 million in the third quarter, up $1.5 million compared to the prior corresponding period.

Thanks to growing scale benefits, I think the cash flow margin and EBITDA margin can significantly increase in the coming years.

Strong revenue growth

With good margins, the ASX small-cap share just needs to grow its revenue to deliver good financial progress.

The business revealed its group revenue was $12.2 million in the third quarter of FY24, with Airtasker marketplace revenue growing by 11.5% to $10.1 million.

The company said the revenue growth was driven by a “recovery in consumer demand (posted tasks) from the prior year as well as successful funnel optimisation programs, including a revised cancellation policy designed to improve platform reliability and address task leakage.”

Those programs saw cancellations reduce by 23.9% year over year, resulting in the ‘monetisation rate’ improving by 12.8% year over year to 20.5% for the ASX small-cap share.

Airtasker recently made agreements with media businesses oOh!Media Ltd (ASX: OML) and ARN Media Ltd (ASX: A1N) for $11 million to grow its brand awareness.

Large addressable market

Users can advertise almost any task on Airtasker, including removalists, home cleaning, furniture assembly, deliveries, gardening and landscaping, painting and other handyperson work, business and admin, photography, and many more. There are many categories with a high annual value of work.

Airtasker is growing rapidly in the United Kingdom — a much bigger market than Australia — partly thanks to its partnership with Channel 4. In the FY24 third quarter, UK posted tasks increased by 49.1% year over year.

It has a smaller presence in the United States, but it’s growing there too. FY24 US gross marketplace value (GMV) went up 23% from a small base. It’s seeing “healthy growth” in marketplace activity while “maintaining a disciplined approach to investment” as it explores “several media partnership opportunities.”

I think the international growth could power this ASX small-cap share much higher.

The post Why I’m bullish about this exciting ASX small-cap share appeared first on The Motley Fool Australia.

More reading

• Could this ASX dividend share offer a huge 11% yield in 2026?
• Zip shares FY24 recap: Up 256%, what’s next for FY25?
• 2 ASX 200 gold stocks racing higher on record results
• Guess which ASX mining stock is rocketing 65% on takeover deal
• Is this ASX ETF the best way to invest in Australian property?

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Airtasker. 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 Vanguard Australian Property Securities Index ETF (ASX: VAP) is one of the larger exchange-traded funds (ETFs) in Australia.

It gives investors exposure to the commercial property sector by investing in real estate investment trusts (REITs) within the S&P/ASX 300 Index (ASX: XKO). The ASX ETF is approximately $3 billion in size and has 33 holdings.

There are a couple of reasons why this ASX ETF could be a good way to invest in property. Let’s take a look.

Diversification

The VAP ETF is invested in several property sectors, including industrial, retail, office, self-storage, healthcare, hotels, farming, and more.

The larger the business, the greater its weighting in the Vanguard Australian Property Securities Index ETF portfolio.

I’ll point out that one REIT owns a portfolio of properties, which is much more diversified than a single residential property. This ASX ETF owns a portfolio of REITs, so there are a lot of underlying properties.

At 31 May 2024, these were the biggest 10 positions:

• Goodman Group (ASX: GMG) – 37.9%
• Scentre Group (ASX: SCG) – 10.7%
• Stockland Corporation Ltd (ASX: SGP) – 7%
• GPT Group (ASX: GPT) – 5.2%
• Mirvac Group (ASX: MGR) – 5%  
• Vicinity Centres (ASX: VCX) – 4.9%
• Dexus (ASX: DXS) – 4.75%
• Charter Hall Group (ASX: CHC) – 3.75%
• National Storage REIT (ASX: NSR) – 1.85%
• Region Re Ltd (ASX: RGN) – 1.6%

At the end of May 2024, it included three REIT sectors with large weightings: industrial REITs (39.5% of the portfolio), diversified REITs (24%), and retail REITs (23.9%).

Low costs

One of the main advantages of choosing a Vanguard ETF is that they usually have low management fee costs. Low expenses mean more of the returns stay in the hands of investors.

According to Vanguard, the VAP ETF has an annual management fee of 0.23%.

My 2 cents on this ASX ETF

I think it’s an effective investment for people wanting exposure to the property market through REITs.

It hasn’t exactly shot the lights out. Over the past ten years, the VAP ETF has returned an average of 9.3%, with 5.2% of that being a distribution return.

It is a decent option for passive income but may not produce much capital growth because of the relatively low rental growth of some of the underlying businesses. If investors prefer a particular sub-sector, they could just go for a specific REIT such as Goodman or Scentre.

The post Is this ASX ETF the best way to invest in Australian property? appeared first on The Motley Fool Australia.

More reading

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• 3 ASX 200 passive income stocks to buy in July
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• How did the Vanguard Australian Shares Index ETF (VAS) perform in FY24?

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

I think S&P/ASX 300 Index (ASX: XKO) stock Nick Scali Limited (ASX: NCK) is one of the more exciting ASX retail shares around. It could be the sort of business that legendary investor Warren Buffett may want to buy.

During his stewardship of Berkshire Hathaway, Buffett has demonstrated an incredible ability to invest in the right businesses at the right time. He has led the investment house to become one of the biggest companies in the United States and, indeed, the world.

The first question is whether Buffett would consider a furniture retailing business like Nick Scali. Berkshire actually owns a few furniture businesses, including Star Furniture, RC Willey Home Furnishings, and Jordan’s Furniture.

But there are a few things that make Nick Scali more interesting than an average furniture retailer.

Large store rollout planned

Nick Scali already has a sizeable national network of stores across Australia and New Zealand. The company aims to grow its Nick Scali store network from 64 stores in December 2023 to 86 stores over the long term.

The ASX 300 stock also owns the furniture retailer Plush, which had 44 stores in December 2023. In the long term, the company aims to grow to 90 to 100 stores.

Nick Scali has a long domestic growth runway, which is a big positive.

The stock also recently completed the acquisition of a company in the United Kingdom that trades under the name Fabb Furniture. Nick Scali paid just $3.82 for the business, which came with $6.7 million of secured debt. The furniture retailer also paid $1 million to exercise its option to exit the existing distribution centre arrangement. This will provide a net working capital injection of up to $11.5 million.

Nick Scali intends to invest further in the existing Fabb Furniture network and establish the Nick Scali brand in the UK. Its strategy will include store refurbishments, rebranding, establishing a new distribution centre, and new store openings. There will be a transition to the Nick Scali product range, and it will leverage its buying power and supply chain.

Considering the UK’s population is more than double Australia’s, I think this ASX 300 stock has plenty of growth potential there.

Excellent return on equity

One of the best profit measures is a company’s return on equity (ROE). This tells the market how much profit the business is making on retained shareholder money.

A high ROE can suggest it’s an appealing business, and it can earn good returns on additional generated profit, which is retained in the company.

Nick Scali’s ROE of more than 50% in FY23 suggests it’s very profitable for shareholders. I believe that expanding the store network in Australia and, hopefully, the UK can unlock significant additional profit.

Appealing metrics

ASX retail shares usually trade on a relatively appealing earnings multiple compared to other sectors. This can lead to a cheap price/earnings (P/E) ratio and a good dividend yield if the company pays a dividend.

According to the estimates on Commsec, Nick Scali shares are trading at 15x FY25’s estimated earnings and 12x FY26’s estimated earnings.

Nick Scali is projected to pay a grossed-up dividend yield of 6.7% in FY25 and 7.8% in FY26.

Whilst the ASX 300 stock is not as cheap as it could be, I think Nick Scali shares would appeal to Warren Buffett because of its quality, growth plans and lower share price – it’s down 16% since April 2024.

The post Would Warren Buffett buy this impressive ASX 300 stock? appeared first on The Motley Fool Australia.

More reading

• 9 ASX All Ords shares lifted to ‘strong buy’ consensus ratings in June
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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Nick Scali. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Australian share market is a great place to generate passive income thanks to the countless dividend-paying stocks that trade on the local bourse.

But which ASX 200 passive income stocks could be in the buy zone for investors this week?

Let’s take a look at three options that brokers have named as buys and tipped to offer very attractive dividends yields in the near term. They are as follows:

IPH Ltd (ASX: IPH)

The first ASX 200 passive income stock that could be a buy is IPH. It is a global intellectual property (IP) services company with a network of member firms across 10 IP jurisdictions.

Goldman Sachs is a fan of the company and currently has a buy rating and $8.70 price target on its shares.

Its analysts are bullish due to the company’s “defensive earnings, strong cash flow, M&A optionality and potential MtM FX upside.”

As for income, Goldman is forecasting fully franked dividends of 34 cents per share in FY 2024 and then 37 cents per share in FY 2025. Based on the current IPH share price of $6.21, this represents yields of 5.5% and 6%, respectively.

Suncorp Group Ltd (ASX: SUN)

Goldman Sachs also think that Suncorp could be a top ASX 200 passive income stock to buy. The broker currently has a buy rating and $18.00 price target on the insurance giant’s shares.

Its analysts believe that Suncorp is well-positioned to benefit from tailwinds in the general insurance market.

The broker expects this to underpin fully franked dividends of 79 cents per share in FY 2024 and then 85 cents per share in FY 2025. Based on the current Suncorp share price of $16.80, this will mean attractive dividend yields of 4.7% and 5.1%, respectively.

Transurban Group (ASX: TCL)

The team at UBS thinks toll road operator Transurban could an ASX 200 passive income stock to buy right now. The broker currently has a buy rating and $14.80 price target on its shares.

UBS likes the company due to its positive outlook and belief that its margins are improving thanks to lower costs. Another reason to be positive is that the West Gate Tunnel project is on track to complete next year and be another boost to its earnings and dividends.

For now, the broker is forecasting dividends per share of 63 cents this year and then 66 cents in FY 2025. Based on the current Transurban share price of $12.38, this will mean yields of 5.1% and 5.3%, respectively.

The post 3 ASX 200 passive income stocks to buy in July appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Monday
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• 3 strong ASX dividend stocks for income investors to buy

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

The ASX dividend stock Step One Clothing Ltd (ASX: STP) has seen its share price fall significantly over the last few months, as shown in the chart below. It’s down 28% since April 2024.  

Why valuation decline can be a good thing? When a share price falls, it boosts the dividend yield. For example, if a dividend yield was 6% and the share price fell 10%, then the yield from the ASX dividend stock would become 6.6%, assuming the dividend payout remained the same in dollar terms.

Now, I’m not purely interested in the dividend – there are other factors to like about Step One Clothing. Before I get to that, here’s what the company does. It’s a direct-to-consumer online retailer of innerwear that is “high quality, organically grown and certified, sustainable, and ethically manufactured”, which suits a broad range of body types, according to the company.

Global growth

In my opinion, one of the most important factors that can unlock potential big returns for a smaller ASX share is whether it’s growing overseas in larger markets than Australia. A large addressable market gives a stock plenty of room for growth, if a company can execute well on its plans.

Of course, short-term progress does not guarantee a company will become a multi-billion-dollar winner. But, Step One is showing good signs of growth and attracting customers.

In the FY24 first-half result, the ASX dividend stock’s total revenue increased by 25.5% to $45 million – despite challenging economic conditions. Australian revenue rose 8.9% to $26.2 million, revenue in the United Kingdom increased 38% to $14.6 million, and United States revenue jumped 256% to $4.1 million.

If the business can grow its revenue (over time) at a double-digit percentage rate, then it could deliver good returns for shareholders.

There are plenty of other countries that Step One can grow into, such as Canada.

Rising margins

When a business can grow its profit margins, profit can grow faster than revenue. Rising profit is good news for shareholders because it can encourage the market to pay more for the business and fund larger dividend payouts.

I’m not expecting profit margins to increase with every result, but the HY24 report showed that the business is capable of achieving operating leverage.

In that half-year period, it reported the gross profit margin improved by 0.5 percentage points to 81.2%, and the earnings before interest, tax, depreciation and amortisation (EBITDA) margin improved 1.7 percentage points to 22.5%.

The ASX dividend stock’s HY24 EBITDA jumped 35.6% to $10.1 million, and net profit after tax (NPAT) grew by 34.7%. This enabled the business to pay a dividend per share of 4 cents.  

Generous dividend payout

The payout of 4 cents per share represented a dividend payout ratio of 100%. Step One said its funding level after paying the dividend was “deemed sufficient to support future expansion and ensure ongoing financial stability”.

Step One said it’s targeting a full-year payout ratio of 100% of net profit, which demonstrates “the board’s commitment to aligning the interests of its investors with the company’s financial success”.

According to Commsec, the ASX dividend stock is expected to pay a grossed-up dividend yield of 6.3% in FY24, 6.9% in FY25, and 7.4% in FY26.

The post 1 ASX dividend stock down 28% to buy right now appeared first on The Motley Fool Australia.

More reading

• Top ASX shares to buy in July 2024
• Overinvested in BHP shares? Here are two alternative ASX dividend stocks

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

The uranium industry has been a great place to be over the past 12 months.

Due to supply shortages and increasing demand, the price of uranium has surged.

And with many analysts expecting these dynamics to remain for a long time to come, the price of the chemical element looks set to remain elevated for the foreseeable future.

This bodes well for ASX uranium stocks, which stand to benefit greatly from these very favourable industry conditions.

With that in mind, let’s now take a look at two ASX stocks that have been named as buys and tipped to generate big returns by analysts at Bell Potter. They are as follows:

Boss Energy Ltd (ASX: BOE)

Bell Potter remains positive on this ASX uranium stock despite a slower than expected ramp up of the Honeymoon project. This morning, the broker has reaffirmed its buy rating with a trimmed price target of $5.90. Based on its current share price of $3.82, this implies potential upside of 54% for investors over the next 12 months.

The broker believes that its shares are great value after a recent pullback. Particularly given the low costs of the Honeymoon operation. It said:

We continue to see value in BOE given the pull back in the uranium sector. BOE maintains a stable balance sheet with sufficient liquidity to execute the ramp up of Honeymoon whilst progressing growth projects across Honeymoon and Alta Mesa. We continue to see Honeymoon as a low-cost restart operation, which has the capacity to generate strong margins in the current pricing environment.

Paladin Energy Ltd (ASX: PDN)

Another ASX uranium stock that could be a top buy right now according to Bell Potter is Paladin Energy. This morning, the broker has retained its buy rating on its shares with a trimmed price target of $15.70. This implies potential upside of 21% for investors.

Unlike Boss Energy, Bell Potter notes that Paladin Energy’s ramp up appears to be ahead of schedule. It commented:

The Langer Heinrich ramp up appears to be running ahead of ours and consensus estimates. We have updated our uranium price deck ahead of the quarterly results for PDN, and adjusted our earnings to reflect updated FY25 guidance provided last week. This sees our production estimates lift for FY25 to 4.5Mlbs (PDN Guidance 4.0-4.5Mlbs) and sales to 3.9Mlbs (PDN Guidance 3.8-4.1Mlbs).

The broker also highlights that a major catalyst is on the horizon that could boost the ASX uranium stock. It adds:

The most significant catalyst will be the closure of the transaction to acquire Fission Uranium which is targeted by September. […] With the updated cost and production guidance our target price decreases 2.5% to $15.70/sh (previously $16.10/sh). Our valuation includes an estimated value for Fission Uranium under the assumption that the transaction is successfully completed in Sept-24. We maintain our Buy recommendation in-line with our ratings structure.

The post Buy these ASX uranium stocks for big returns in FY25 appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Monday
• 10 ASX shares to buy in FY25
• Here’s how the ASX 200 market sectors stacked up last week
• These top 3 ASX 200 uranium shares went nuclear in FY24
• Best 5 ASX 200 energy shares for price growth in FY24

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 Vanguard Australian Shares Index ETF (ASX: VAS) performed soundly for investors during the 2024 financial year. This exchange-traded fund (ETF) is the biggest of the sector on the ASX, so it’s an important component for many investor portfolios.

The VAS ETF tracks the S&P/ASX 300 Index (ASX: XKO), an index of 300 of the biggest businesses on the ASX.

An ETF’s performance is almost entirely decided by the performance of its underlying holdings. The bigger the position weighting in an ETF’s portfolio, the more influence it will have on the fund’s overall return.

We’ll look at the fund’s overall performance and then analyse which stocks appears to have driven those returns,

Vanguard Australian Shares Index ETF’s FY24 performance

The VAS ETF unit price delivered capital growth of 7.4% over the 2024 financial year.

It has also paid a distribution return of approximately 3.9% for FY24.

If we add those two elements of the return together, that would suggest a total investor return of 11.3% over the 12-month period, excluding franking credits.

Vanguard will confirm those return figures in due course when it releases its monthly update for June 2024.

How did the VAS ETF deliver a double-digit return?

The biggest ASX blue-chip shares had the most impact on the return because of their weighting in the portfolio.

During the 2024 financial year:

• The BHP Group Ltd (ASX: BHP) share price fell 5%
• The Commonwealth Bank of Australia (ASX: CBA) share price rose 27%
• The National Australia Bank Ltd (ASX: NAB) share price increased 37%
• The Westpac Banking Corp (ASX: WBC) share price went up 28%
• The ANZ Group Holdings Ltd (ASX: ANZ) share price climbed by 19%
• The Wesfarmers Ltd (ASX: WES) share price lifted 32%
• The Goodman Group (ASX: GMG) share price went up by 73%

Of course, past performance is not a reliable indicator of future performance, particularly when it comes to short-term returns. The above stocks may not perform anywhere near as well in FY25 – they could even see their share prices go down.

Another factor that helped the Vanguard Australian Shares Index ETF is its annual management fee of only 0.07%, which is very low compared to what an active fund manager may charge, say 1.% plus performance fees.

What next?

The VAS ETF expects to pay its latest quarterly distribution, comprising a cash distribution of 67.2 cents and franking credits of 17.1 cents, on 16 July 2024.

In FY25, ASX mining shares and ASX bank shares could have another sizeable impact on the fund’s performance because those two sectors make up around half of the fund’s weighting.

I recently covered its outlook for the 2025 financial year in another article.

The post How did the Vanguard Australian Shares Index ETF (VAS) perform in FY24? appeared first on The Motley Fool Australia.

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• Want the latest Vanguard Australian Shares Index ETF dividend? Here’s what to do
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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goodman Group and Wesfarmers. The Motley Fool Australia has positions in and has recommended Wesfarmers. The Motley Fool Australia has recommended Goodman Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.