Category: Stock Market

If we look at the ASX share market, around half of the weighting consists of ASX bank shares and ASX mining shares. Therefore, I think it could be a good idea to diversify by investing in different industries.

Ideally, we want to choose investments that can diversify and grow. I don’t think investing in something with a high chance of not delivering any long-term growth is ideal. Hence, that’s why I like the potential of the below three ASX shares.

Propel Funeral Partners Ltd (ASX: PFP)

Propel is the second-largest funeral operator in Australia and New Zealand. It’s a morbid industry, but it’s a necessary service. Indeed, as the saying goes, there are two things certain in life – death and taxes.

The company describes how a “death boom” is expected in the next two decades. The number of deaths in Australia is expected to grow at a compound annual growth rate (CAGR) of 2.5% between 2024 to 2030 and then 2.9% between 2031 to 2040.

Propel’s average revenue per funeral continues to grow – in the first half of FY24, it saw a 4.5% year-over-year increase, driven by inflation. The average revenue per funeral has increased every year since FY14, at a CAGR of around 3.1%.

Revenue is growing at a fast rate organically, and the company is also regularly making acquisitions to expand geographically.

HY24 revenue was up 22.8% and operating earnings before interest, tax, depreciation and amortisation (EBITDA) increased 18.5%.

In the long-term, this business could make stronger profits with Australia’s growing and ageing population.

Corporate Travel Management Ltd (ASX: CTD)

This ASX share describes itself as a leader in business travel management services in Australia, New Zealand and beyond. It also has a presence in North America, Asia and Europe.

It has done a good job of growing its market share over the years, partly due to its very high client retention rate of 97%. The return of travel after COVID-19 has been very beneficial for its earnings.

The business has a goal of delivering revenue growth of at least 10% per annum over the next five years, partly by winning new clients. Any acquisitions would be an extra. It’s aiming to grow its EBITDA by an average of 15% per annum in the next five years.

Corporate Travel Management is aiming to maintain a 50% dividend payout ratio, invest in high-performing projects, use excess cash for share buybacks, and make acquisitions.

According to Commsec, the Corporate Travel Management share price is valued at under 13x FY26’s estimated earnings.

VanEck MSCI International Quality ETF (ASX: QUAL)

This ASX exchange-traded fund (ETF) is all about investing in high-quality global shares that score well on a few different quality metrics – high return on equity (ROE), earnings stability and low financial leverage. When you combine those metrics, you’re left with a group of strong businesses.

In total, this fund is invested in 300 businesses, so that’s more diversification (in terms of the number of stocks) than the S&P/ASX 200 Index (ASX: XJO).

Banking and mining make up half of the ASX but account for less than 10% of this fund. Instead, it has large allocations to stocks like Nvidia, Microsoft, Meta Platforms, Apple, Eli Lilly, Alphabet, Novo Nordisk and Visa.

The QUAL ETF has performed well over the long term, and I’m optimistic it can beat the ASX 200 share index over time because of the screening process for quality.

The post 3 ASX shares I’d buy for instant diversification appeared first on The Motley Fool Australia.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. 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. 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 Alphabet, Apple, Corporate Travel Management, Meta Platforms, Microsoft, Nvidia, and Visa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Novo Nordisk and has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has positions in and has recommended Corporate Travel Management. The Motley Fool Australia has recommended Alphabet, Apple, Meta Platforms, Microsoft, and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

I love owning good investments in my portfolio. There are great ASX shares, but there are plenty of compelling businesses outside of the ASX too. My portfolio is quite focused on ASX shares because that’s where I spend my time researching.

But it’d be good for me to get more diversification without necessarily reducing my returns. That’s where exchange-traded funds (ETFs) come in. Good ETFs can provide diversification as well as solid returns.

The two ETFs I’m going to discuss below offer quality and exposure to different industries that largely aren’t available in Australia.

VanEck MSCI International Quality ETF (ASX: QUAL)

The QUAL ETF owns a portfolio of 300 global businesses that rank well on quality metrics.

Compared to the ASX, which is weighted to ASX bank shares and ASX mining shares, which largely make their profit in Australia (and New Zealand), this ASX ETF offers a much better spread of investments.

It does have the biggest weighting to IT (with a 33.8% allocation), which I think is a good thing because that’s usually where good returns can often be found due to the strong economics of software. Four other sectors have a weighting of more than 9%  – healthcare (18.2%), industrials (12.7%), communication services (10.2%) and consumer staples (9.3%).

Geographic diversification is also good. The portfolio includes several countries with a weighting of more than 1%, including the US (75.2%), Switzerland (5%), the UK (3.7%), Denmark (3.2%), Japan (3%), the Netherlands (3%), France (2%), and Canada (1.1%).

But, I don’t just want diversification for the sake of it if it were to reduce my returns materially. This ASX ETF only invests in businesses that score well on having a high return on equity (ROE), earnings stability, and low financial leverage.

In other words, it makes good profit for shareholders, the profit doesn’t usually experience sizeable declines, and the balance sheet is in good shape.

Past performance is not a guarantee of future performance, but the quality focus has led the QUAL ETF to deliver an average return per annum of 14.9% over the three years to April 2024.

VanEck Morningstar Wide Moat ETF (ASX: MOAT)

Morningstar analysts choose the MOAT ETF’s portfolio, which looks at US companies with strong and durable economic moats or competitive advantages.

Competitive advantages can come in many different forms, such as patents, brand power, network effects, cost advantages and switching costs. This ASX ETF is targeting businesses where the competitive advantage is expected to almost certainly endure for the next decade or two.

There’s quite a mixture of different businesses at the top of the holdings, including Alphabet, International Flavors & Fragrances, Teradyne and Rtx (which have a weighting of between 3.1% and 2.9%). The smallest position in the portfolio has a weighting of 1%.

The sector allocation within this ASX ETF can change as the investments shift, but at the moment, there are five industries with a double-digit weighting – healthcare (20.8%), industrials (17.9%), IT (15%), financials (14.3%) and consumer staples (11.6%). I like the mixture of businesses here.

Since its inception in June 2015, the MOAT ETF has delivered an average annual return of 15.6%.

I think both ASX ETFs can play a good part in my portfolio, and there’s a good chance I’ll own at least one of them by the end of 2024.

The post Both of these excellent ASX ETFs are on my buy list appeared first on The Motley Fool Australia.

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• 3 ASX shares I’d buy for instant diversification
• How much money should I put in one ASX ETF?
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• Top ASX shares to buy for your superannuation fund in May 2024
• Does the VanEck Wide Moat ETF pay a decent ASX dividend?

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. 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 Alphabet. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended RTX and Teradyne. The Motley Fool Australia has recommended Alphabet 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.

The Woodside Energy Group Ltd (ASX: WDS) share price has drifted around 10% lower this year to date, continuing its slide from last year and hitting 52-week lows earlier this month.

Meanwhile, the broader S&P/ASX 200 Energy Index (ASX: XEJ) is down just 1.8% so far this year.

But, as Warren Buffett says, “price is what you pay – value is what you get“.

So, is the Woodside share price attractively valued, or not?

What impacts Woodside’s valuation?

Woodside produces oil and gas. That means it does not have the luxury of setting its prices. Instead, it must accept the current market price for oil and gas. It is a “price taker”.

Brent crude oil currently trades at around US$83 per barrel, down from the highs above $90 per barrel seen early last month.

Oil prices have cooled since April on the prospect of even higher interest rates, “which could dampen growth and hit fuel demand in the world’s top oil consumer [the USA]”, per Trading Economics.

Analysts at Morgans, however, don’t see this as a headwind for the Woodside share price. The broker is bullish on the oil and gas giant’s stock and sees the decline in oil prices as “moderating”.

If oil prices do, in fact, remain stable, the broker sees the current Woodside share price “as a good time to add” and targets $36 per share for the energy player in the next 12 months.

Should this target price materialise, a $10,000 investment in Woodside shares today would be valued at around $12,700 – a 27% return, not including dividends.

Is the Woodside share price overvalued?

The company’s shares currently sell at a price-to-earnings (P/E) ratio of 21.6 times. That means, investors are paying $21.60 for every $1 of the company’s profits.

For this, Morgans expects the company to pay dividends of $1.25 per share in FY 2024 – a forward dividend yield of around 4.5% as I write.

Meanwhile, competitors Santos Ltd (ASX: STO) and Origin Energy Ltd (ASX: ORG) trade at P/E multiples of around 12 times and 11 times respectively.

Okay, so we know investors are paying a higher price for Woodside shares than their peers relative to the earnings of the respective businesses.

Why would this be so? Does it mean Woodside is overvalued?

Morgans doesn’t think so. The broker says Woodside has “a healthy balance sheet and healthy dividend profile” as two factors in the value equation.

Its price target of $36 per share implies a P/E multiple of around 41 times Woodside’s last reported earnings per share of $0.87.

The broker ultimately believes the Woodside share price is undervalued. Time will tell.

The post Is the Woodside share price at a stretched valuation right now? appeared first on The Motley Fool Australia.

More reading

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• Guess which ASX energy shares are buys and could deliver huge 12-month returns
• 5 things to watch on the ASX 200 on Monday
• Here’s how the ASX 200 market sectors stacked up last week
• Morgans names the best ASX dividend shares to buy in May

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 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.

Looking for some exposure to the tech sector? Then read on!

That’s because two high-quality ASX 200 tech stocks have recently been tipped as buys by top brokers.

Here’s what they are saying about these rapidly growing companies:

Life360 Inc (ASX: 360)

This location technology company’s shares are trading within touching distance of a record high.

Investors have been scrambling to buy the Life360 app owner’s shares after its sales growth went into overdrive. This has been underpinned by the company’s enormous global monthly active users (MAU). They increased by 4.9 million during the first quarter to 66.4 million.

This growth impressed analysts at Bell Potter. In response, the broker retained its buy rating and boosted its price target to $17.75. This implies potential upside of 15% over the next 12 months. The broker commented:

We have increased the multiple we apply in the EV/Revenue valuation from 5.5x to 6.5x given the proposed US listing and potential re-rating of the stock given the higher multiples of comps like Reddit (NYSE: RDDT). There is, however, no change in the 9.3% WACC we apply in the DCF. The net result is a 9% increase in our PT to $17.75 which is >15% premium to the share price so we maintain our BUY recommendation. Key potential catalysts for the stock include another strong quarter of paying circle growth in Q2 (April was another good month), a potential upgrade to the 2024 guidance sometime in H2 and a US listing at some stage in the next 12 months.

Xero Ltd (ASX: XRO)

Another ASX 200 tech stock that is highly rated by brokers is Xero. It is a fast-growing cloud accounting platform provider.

Much like Life360, it has a very large user base. At the last count, the company had 3.95 million subscribers using its core accounting, payroll, workforce management, expenses, and projects solutions.

However, this is only a fraction of its addressable market, which gives Xero a multi-decade runway for growth. It is for this reason that Goldman Sachs currently has a conviction buy rating and $156.00 price target on its shares. It said:

Xero is a Global Cloud Accounting SaaS player, with existing focuses in ANZ, UK, North American and SE Asian markets. We see Xero as very well-placed to take advantage of the digitisation of SMBs globally, driven by compelling efficiency benefits and regulatory tailwinds, with >100mn SMBs worldwide representing a >NZ$100bn TAM. Given the company’s pivot to profitable growth and corresponding faster earnings ramp, we see an attractive entry point into a global growth story with Xero our preferred large-cap technology name in ANZ – we are Buy rated (on CL).

The post Brokers name 2 rapidly growing ASX 200 tech stocks to buy appeared first on The Motley Fool Australia.

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

Over the last five years, Pilbara Minerals Ltd (ASX: PLS) shares have been among the best performers on the Australian share market.

During this time, the lithium miner’s shares have absolutely smashed the market with a stunning gain of 458%.

This means that if you had invested $10,000 into the company’s shares back then, your investment would be worth over $55,000 today.

This has been driven by the company’s emergence as one of the leading players in the lithium industry thanks to its 100% owned, world class Pilgangoora Lithium-Tantalum Project, which is located approximately 120 kilometres from Port Hedland in the Pilbara region of Western Australia.

But those returns have been and gone. What could happen if you were to invest $10,000 into Pilbara Minerals shares today?

Let’s see what analysts are forecasting for the lithium miner over the next 12 months.

$10,000 invested in Pilbara Minerals shares

The company’s shares are currently changing hands for $4.08. This means that with $10,000 (and 8 cents more) to invest, you could pick up 2,451 units.

Unfortunately, finding an analyst that is bullish on this miner is difficult right now due to the bleak outlook for lithium prices.

In fact, the most bullish broker out there appears to be Macquarie with its neutral rating and $4.20 price target.

If the Pilbara Minerals share price were to rise to that level, it would value those 2,451 units at $10,294.20.

That’s not exactly a compelling return and arguably doesn’t justify the risks involved in investing in the lithium industry.

But things could be much worse.

The bear predicting big declines

According to a recent note out of Goldman Sachs, its analysts have a sell rating and $2.80 price target on the company’s shares.

If Pilbara Minerals’ shares were to fall to that level, your investment would have a market value of $6,862.80. That’s over $3,000 less than you paid.

Goldman explains that it thinks the company’s shares are expensive based on its lithium price forecasts (which have been very accurate over the last 18 months). It said:

We see PLS’ net cash declining to ~A$0.8-0.9bn (though still a relatively strong position vs. some peers and defensive into a declining lithium price), where with the stock trading at ~1.2x NAV (peer average ~1.05x), or pricing ~US$1,300/t spodumene (including a nominal value of A$1.1bn for growth) vs. peers at ~US$1,210/t (lithium pure-plays ~US$1,110/t; GSe US$1,150/t LT real), we see PLS as relatively expensive on fundamentals.

Overall, based on the above, it may be best to sit tight and wait for a better entry point.

The post How much could a $10,000 investment in Pilbara Minerals shares be worth in 12 months? appeared first on The Motley Fool Australia.

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• Forget Pilbara Minerals and buy this ASX 200 lithium stock instead
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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 and Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

ANZ Group Holdings Ltd (ASX: ANZ) shares are a popular option for income investors.

Each year, the banking giant rewards its shareholders with two dividend payments.

The most recent was announced last week when the big four bank released its half year results.

As a reminder, ANZ reported cash earnings of $3,552 million for the six months. This represents a 1% decline compared to the second half of FY 2023.

Management advised that this reflects a difficult half for the Australia Retail business, which reported a 9% decline in cash earnings to $794 million. This offset a strong performance from its key Institutional business, which delivered a 12% jump in cash earnings to $1,522 million.

Fortunately for shareholders, this modest earnings decline didn’t stop the ANZ board from increasing its dividend. It lifted its 65% franked interim dividend by 2 cents per share year on year to 83 cents per share.

Unfortunately for non-shareholders, ANZ’s shares traded ex-dividend for this payout on Monday. This means that the rights to this dividend are now settled and so it is too late to receive this on pay day (1 July) if you were not on its share register at Friday’s close.

But don’t worry, because ANZ will be announcing its next dividend in six months when it releases its full year results.

But what will be the amount of that dividend? Let’s see what analysts are now predicting from the banking giant after running the rule over last week’s results.

ANZ dividend forecast

According to a note out of Goldman Sachs, its analysts have boosted their dividend forecasts in response to its results.

The broker is now expecting ANZ to pay total dividends of $1.66 per share in FY 2024. This is an increase from its previous forecast of $1.62 per share. Based on the latest ANZ share price of $28.21, this will mean a 5.9% partially franked dividend yield for investors.

In FY 2025, Goldman has also lifted its dividend forecast from $1.62 per share to $1.66 per share. This will mean another attractive partially franked 5.9% dividend yield for shareholders to look forward to receiving.

And if you’re a fan of consistency (and big yields), you will be pleased to know that Goldman expects a third year in a row of $1.66 per share partially franked dividends in FY 2026. This will mean yet another 5.9% dividend yield for investors.

Overall, the broker appears to believe that the big yields are here to stay, which is likely to be supportive of the ANZ share price during the forecast period.

The post Here’s the ANZ dividend forecast through to 2026 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.

BHP Group Ltd (ASX: BHP) shares will be in focus on Monday.

That’s because it has just been revealed that the mining behemoth has made a new takeover offer for Anglo American plc (LSE: AAL).

As a reminder, late last month the Big Australian tabled a non-binding offer of:

• 0.7097 BHP shares per Anglo American share,
• And ordinary shares in Anglo American Platinum and Kumba Iron Ore (which would be distributed by Anglo American to its shareholders in direct proportion to each shareholder’s effective interest in Anglo Platinum and Kumba)

This was swiftly rejected by its target on the belief that the offer undervalued the company and was opportunistic. Anglo American’s chair, Stuart Chambers, explained:

The BHP proposal is opportunistic and fails to value Anglo American’s prospects, while significantly diluting the relative value upside participation of Anglo American’s shareholders relative to BHP’s shareholders.

New offer

Overnight, Anglo American Mining revealed that it has received another offer from BHP.

It notes that the structure of the latest proposal is unchanged and comprises an all-share offer.

What has changed is the amount of BHP shares that are being put on the table. The new offer is as follows:

• 8132 BHP shares
• Ordinary shares in each of Anglo American Platinum and Kumba Iron Ore

This values Anglo American Mining at GBP34 billion or A$64 billion.

Second rejection

Unfortunately for BHP, the copper miner has also rejected this latest offer. Once again, its board believes the proposal significantly undervalues its business.

Chambers commented:

The latest proposal from BHP again fails to recognise the value inherent in Anglo American. Anglo American shareholders are well positioned to benefit from increasing demand from future enabling products while the increasing capital intensity to bring greenfield supply online makes proven assets with world class resource endowments ever more attractive. The Anglo American team is focused on delivering against its strategic priorities of operational excellence, portfolio simplification and growth and is set to accelerate delivery in order to unlock this inherent value.

Anglo American also dislikes the structure of the proposal, which was unchanged from the last offer. The chairman adds:

The BHP proposal also continues to have a highly unattractive structure. This leaves Anglo American, its shareholders and stakeholders disproportionately at risk from the substantial uncertainty and execution risk created by the proposed inter-conditional execution of two demergers and a takeover.

What’s next?

BHP has yet to comment on the offer and its rejection.

Nor has there been any comment on whether the miner will try to make it third time lucky. But given its determination to boost its copper exposure, it wouldn’t be surprising to see BHP return with an improved offer.

The post BHP shares on watch after new $64b Anglo American takeover offer rejected appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Tuesday
• 4 founder-led ASX 300 shares that have helped this fund outperform
• ASX 200 banks vs. mining stocks: Which is the better buy today?
• 4 excellent ASX 200 dividend shares to buy for your income portfolio
• Should you buy BHP stock on a pullback?

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.

If you are on the lookout for big returns to supercharge your investment portfolio, then read on.

That’s because analysts at Goldman Sachs have just tipped an ASX 200 stock to generate a 12-month total return of over 40%.

To put that into context, a $10,000 investment in this company’s shares would turn into approximately $14,000 in a year if the broker is on the money with its recommendation.

Which ASX 200 stock could deliver big returns?

The ASX 200 stock in question is media and entertainment company Nine Entertainment Co Holdings Ltd (ASX: NEC)

According to a note that was released this morning, the broker has responded to the company’s strategy day presentation by retaining its buy rating and $2.10 price target.

Based on the Nine Entertainment share price of $1.53, this implies potential upside of 37% for investors over the next 12 months.

In addition, Goldman Sachs is forecasting fully franked dividend yields of 5.2% in FY 2024 and then 5.9% in FY 2025. This boosts the total annual potential return to over 42%.

What did the broker say?

Goldman was cautiously optimistic about the strategy day update, noting that it demonstrated how the company stands to benefit from its technology, data and artificial intelligence (AI) offerings. The broker said:

Broadly we were encouraged by the detailed update and remain positive on Nine’s strategy. However although currently being masked by challenging ad markets, we would want to see the c.$100mn p.a. investment being made in product/tech translate into both above market growth (from higher yields), alongside improving efficiency across the business as ad markets ultimately recover. Nine was upbeat on this, reiterating its view that it can grow its Total TV Audience, grow average CPMs given 9Now adoption, and improve efficiency through AI.

It then adds:

Supporting this view, a range of examples was provided, including: (1) 9 Ad Manager driving 2X CPMs, with 12% of users currently adopting the Gen AI tool; (2) Nine’s Second Gen data across its 22mn signed in users and 68 Tribes provides powerful targeting in a cookie-less world; (3) Automated captions to save and estimate $3-5mn in cost p.a.; (4) 9 ExPress, which converts scripted TV news content into news articles is improving output c.100%; (5) Gen AI improving journalist productivity 4X at Domain (potential revenue/opex benefits).

Overall, the broker continues to believe this ASX 200 stock is well positioned to deliver consistent earnings and dividend growth over the coming years. As a result, it thinks it would be a good option for investors at current levels.

The post Why this ASX 200 stock could generate a 40% 12-month return 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 recommended Nine Entertainment. 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) fought hard and managed to record the smallest of gains. The benchmark index rose a single point to 7,750 points.

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

ASX 200 expected to edge lower

The Australian share market is expected to edge lower on Tuesday following a mixed start to the week on Wall Street. According to the latest SPI futures, the ASX 200 is poised to open the day 8 points or 0.1% lower. In the United States, the Dow Jones was down 0.2% and the S&P 500 was down a fraction, but the NASDAQ rose 0.3%.

BHP makes new takeover offer

The BHP Group Ltd (ASX: BHP) share price will be on watch today after the mining giant made another offer to acquire Anglo American plc (LSE: AAL). BHP has increased its offer to 0.8132 BHP shares and ordinary shares in each of Anglo American Platinum and of Kumba Iron Ore. This compares to its previous offer of 0.7097 BHP shares per share. However, it hasn’t been enough for the Anglo American board, which has rejected the offer.

Oil prices charge higher

It could be a good session for ASX 200 energy shares Santos Ltd (ASX: STO) and Karoon Energy Ltd (ASX: KAR) after oil prices charged higher overnight. According to Bloomberg, the WTI crude oil price is up 1.1% to US$79.14 a barrel and the Brent crude oil price is up 0.75% to US$83.42 a barrel. Oil demand optimism boosted prices overnight.

Fletcher Building rated neutral

Fletcher Building Ltd (ASX: FBU) shares are about fair value according to Goldman Sachs. This is despite the building products company’s shares crashing to a multi-year low on Monday following the release of a disappointing market update. In response to the update, Goldman has retained its neutral rating with a $3.05 price target (from $3.70). It said: “We believe the valuation appears undemanding on a through-the-cycle basis. However, we expect leverage to weigh on valuation. Specifically, we estimate that ND:EBITDA will peak at 2.2x in Dec24, which is above management’s target range of 1-2x.”

Gold price tumbles

ASX 200 gold shares including Evolution Mining Ltd (ASX: EVN) 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 1.4% to US$2,342.2 an ounce. Traders appear to have doubts over the outlook for rate cuts in the United States.

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

More reading

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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.

Beating the market by buying our own portfolio of ASX 300 shares is always a difficult task.

Most ASX share market index funds have historically delivered some compelling returns over long periods of time. Overcoming the efficiency of an index fund and generating even higher returns is the north star of most ASX investors. But it’s a task that’s far easier said than done.

So when a fundie manages to do so, it’s always worth taking a look to see how they pulled it off.

That’s exactly what Airlie Funds Management can boast of today. Airlie’s Australian Share Fund has returned an average of 10.65% per annum (as of 30 April) since its founding in 2018, handily outperforming an ASX index fund by more than 2% per annum.

Airlie has also managed to hit an average return of 11.85% over the five years to 30 April 2024, beating its benchmark by 3.85% per annum.

So Airlie clearly knows what it’s doing when it comes to beating the market.

Luckily, today we get a chance to go through the ASX 300 shares that this successful fundie is eying off for its next investments.

The ASX 300 shares that Airlie is buying

As reported in the Australian Financial Review (AFR), Airlie portfolio manager Emma Fisher named Mineral Resources Ltd (ASX: MIN), Reece Ltd (ASX: REH), Resmed Inc (ASX: RMD) and Premier Investments Limited (ASX: PMV) as some of Airlie’s most recent successes, helping to drive the fund’s 12.7% return over the 12 months to 30 April.

These ASX 300 shares are all founder-lead – an attribute that Fisher names as a critical component of Airlie’s success with them. She told the AFR that the meetings with these companies management “stood out”:

I have always found a lot of value from being in a room with management. Maybe not in every meeting, maybe a lot of them are a wash, but when you meet the real deal, it really stands out for you.

In terms of the fund’s next winners, Fisher states that blue chips like Commonwealth Bank of Australia (ASX: CBA), BHP Group Ltd (ASX: BHP) and CSL Ltd (ASX: CSL) are long-term staples of Airlie’s portfolio.

But she’s most excited about her next ASX 300 shares, which are “big bets” and include IDP Education Ltd (ASX: IEL).

IDP is currently going through some regulatory issues, which has resulted in the company’s share price losing significant value in recent months. But Fisher is taking advantage of this as a buying opportunity:

They’ve got the balance sheet, they’re the leading player, it’s not a capital-intensive industry, and they don’t need much cash to grow, so they’re going to survive a downturn.

Fisher has also been showing serious interest in the big supermarkets Woolworths Group Ltd (ASX: WOW) and Coles Group Ltd (ASX: COL):

They’ve fallen so much… If you bought the banks off the back of the royal commission, if you bought Qantas when it was having its own inquiry grilling last year, you’ve done pretty well. So now it’s the supermarkets’ time in the headlights.

So those are the ASX 300 shares that Airlie is eyeing off as its next potential winners. Let’s see how they do over the next 12 months and beyond.

The post 4 founder-led ASX 300 shares that have helped this fund outperform appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has positions in CSL. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL, Idp Education, and ResMed. The Motley Fool Australia has positions in and has recommended Coles Group and ResMed. The Motley Fool Australia has recommended CSL, Idp Education, and Premier Investments. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.