Category: Stock Market

ASX small-cap shares can be some of the most exciting stocks to be invested in. If I had $5,000 to invest in small businesses with big potential, I know which two I’d want to own.

Finding promising companies that are early on with their growth journeys can lead to big returns.

If a $1 billion company grows to $2 billion, that’s doubling in size. If a $200 million business becomes $2 billion, that’s growing 10x in size. Investing in small-caps can be a higher risk as no business is guaranteed to grow, but I really like the prospects of the two names below.

Airtasker Ltd (ASX: ART)

Airtasker describes itself as “Australia’s leading online marketplace for local services, connecting people and businesses who need work done with people who want work”.

The company offers countless task categories, including home cleaning, furniture assembly, deliveries, removalists, handyman work, gardening, pet care and so on.

The Airtasker platform is growing in popularity over time, and that’s great because it has a high gross profit margin. Increased revenue is rapidly translating into profitability, despite the company’s heavy investment in growth.

In the FY24 first-half result, the Airtasker marketplace revenue grew by 10.3% to $18.9 million, while group revenue increased 6.8% to $23.3 million. I think that’s a good growth rate considering the difficult broader economic situation with the elevated cost of living.

The ASX small-cap share’s group earnings before interest, tax, depreciation and amortisation (EBITDA) rose $7.1 million to $2 million. Positive operating cash flow grew $7.6 million to $1.4 million, and positive free cash flow increased $4.7 million to $0.1 million.

Reaching positive profit numbers is a real milestone for a company like Airtasker, in my opinion. If revenue keeps growing at a good rate, then I think (underlying) profit can soar.

In June 2023, the business formed a media-for-equity partnership with Channel 4 in the United Kingdom. In HY24, UK-posted tasks increased by more than 30%, which bodes well for the future. The United states saw revenue increase by 132.4% to US$57,000, where it’s still early on with its growth.

I believe this company has a very promising future.

Close The Loop Ltd (ASX: CLG)

This ASX small-cap share has locations in Australia, Europe, South Africa and the US. It says it creates “innovative products and packaging that includes recyclable and made-from-recycled content, as well as collect, sort, reclaim and reuse resources that would otherwise go to landfill.”

Close the Loop is involved in a number of areas of the ‘circular economy’ including “recovering a wide range of electronic products, print consumables and cosmetics, through to the reusing of toner and post-consumer soft plastics for an asphalt additive”.

I think this company is becoming increasingly well-positioned for a world focusing on a sustainable future as it builds its solutions across packaging and consumables to a variety of markets.

Despite its investing level, the company is seeing good profit growth. HY24 revenue rose 76% to $103 million, and the gross profit margin improved to 36.2% (up from 32.8%). EBITDA jumped 139% to $22.7 million, while underlying net profit after tax (NPAT) increased 164% to $13.25 million.

Close the Loop said it was on track to beat its FY24 guidance of $200 million and it upgraded its EBITDA guidance to between $44 million to $46 million.

With a goal of ‘zero waste to landfill, I think the company can expand in a number of different ways – it can grow its existing businesses as more people (and businesses) recycle, it can expand geographically, and it can enter into new areas of recycling.

The post Where I’d invest $5,000 into ASX small-cap shares aiming for big growth appeared first on The Motley Fool Australia.

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More reading

• The CEO of this ASX stock just sold $127m worth of shares
• 2 cheap ASX dividend shares I’d snap up in a heartbeat!
• Why Life360 shares can keep rocketing
• If I were 60 I’d buy these ASX shares for dividends
• Guess which 4 shares are being dumped from the ASX 200 index

Motley Fool contributor Tristan Harrison has positions in Close The Loop. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Close The Loop. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Airtasker. The Motley Fool Australia has recommended Close The Loop. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Cettire Ltd (ASX: CTT) shares are starting the week deep in the red.

In morning trade, the ASX ecommerce stock is down 7.5% to $4.46.

Why is this ASX stock sinking?

Investors have been heading to the exits on Monday after the company confirmed that its founder and CEO, Dean Mintz, has sold down his stake.

Insider selling rarely goes down well with the market. The theory goes that if the insiders believed their shares were undervalued, then they would be holding onto them.

What did Mintz sell?

According to the release, the ASX stock’s founder and CEO agreed to sell down 27.5 million shares in the online luxury retailer. This represents a whopping ~7.2% of the company’s issued capital.

The sell down was undertaken at a price of $4.63 per share by way of an underwritten block trade, equating to a total consideration of approximately $127.3 million.

The sale price represents a modest 4.1% discount to where the Cettire share price last traded, which is quite a coup for the CEO given the size of the selling.

This could be a sign that demand for the ASX stock remains strong despite rising almost 200% over the last 12 months.

What’s left?

The release reveals that following this sale, Mintz will retain a ~30% shareholding in the company and remain Cettire’s largest shareholder.

As a result, it is fair to say that he still has plenty of skin in the game after this sale.

Commenting on the sell down, Mintz said:

Cettire continues to perform very strongly as demonstrated in the Company’s recent H1-FY24 Results. In response to strong investor demand, undertaking this share sale provides enhanced liquidity and free float, improving the likelihood of achieving further major index inclusion over time.

In addition, the CEO has agreed to escrow his remaining holding in Cettire until the release of the company’s full year results in August.

The post The CEO of this ASX stock just sold $127m worth of shares appeared first on The Motley Fool Australia.

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More reading

• If you’d put $20,000 in this ASX retail stock 19 months ago, you’d have $239,000 now
• Is buying investment property in regional areas like buying ASX small-cap shares?
• Why Bell Potter says these ASX small cap shares are buys
• Bell Potter says this rocketing small cap ASX share can keep climbing
• Why Cettire, Dexus Industria, Pilbara Minerals, and Zip shares are jumping today

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

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I love finding ASX dividend shares with big dividend yields. I think some businesses are undervalued, which means they could deliver good share price returns and pleasing passive income.

It’s a difficult retail landscape at the moment, with so many households facing inflation pressures. But, I don’t believe the economic environment forever will be tricky forever, meaning this could be the right time to look at beaten-up ideas.

If the share prices of the two cheap ASX dividend shares below have been oversold, the future dividend yields could be huge.

Universal Store Holdings Ltd (ASX: UNI)

Universal Store owns a number of “premium” youth fashion brands. Its businesses and brands include Universal Store, THRILLS, Worship and Perfect Stranger. The company currently operates 100 stores across Australia, and this number is steadily increasing.

The Universal Store share price is still 45% lower than it was in November 2021, which has boosted the dividend yield.

The company has grown its annual dividend each year since 2021, when it first started paying dividends.

In the FY24 first-half results, the company advised it grew its total sales by 8.5%, underlying earnings before interest and tax (EBIT) rose 8.1% to $30.8 million and statutory net profit after tax (NPAT) rose 16.7% to $20.7 million. It grew its interim dividend 17.8% to 16.5 cents per share.

I think the cheap ASX dividend share can keep boosting its store count, particularly the number of Perfect Stranger stores, to help grow profit over time.

According to the projection on Commsec, Universal Store could pay a grossed-up dividend yield of 7.7% in FY24 and 9.7% in FY26.

KMD Brands Ltd (ASX: KMD)

KMD Brands is another ASX retail share related to apparel. It has three brands – Kathmandu, Rip Curl and Oboz.

The KMD share price is down close to 70% from October 2021.

The company is seeing weak consumer sentiment, while the warmest winter on record in Australia has hurt Kathmandu sales. KMD expects to see signs of improvement in the second half of FY24, and in FY25.

The Rip Curl and Oboz brands have suffered from a sizeable reduction in wholesale sales as wholesale clients reduce inventory holdings. However, KMD Brands expects FY25 to have a positive outlook for the wholesale channel.

I think this company can bounce back in the medum-term – it’s working hard on improving sales, optimising its gross margin, controlling operating costs and reducing working capital. The very large fall of the KMD Brands share price gives us plenty of margin of safety, in my opinion, when we think about when the company might achieve in FY25 and FY26.

According to the projections on Commsec, the cheap ASX dividend share is valued at 10x FY25’s estimated earnings and 6x FY26’s estimated earnings.

With that profit generation, KMD Brands could pay a dividend yield of 7.4% in FY25 and 10.7% in FY26.

However, keep in mind that the FY24 dividend yield – the current financial year — could be minimal. It’s currently estimated at 4.9%, though I’d warn it could be less than that (or possibly even nothing), depending on what the board decide.

The post 2 cheap ASX dividend shares I’d snap up in a heartbeat! appeared first on The Motley Fool Australia.

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More reading

• These ASX dividend stocks could be top buys in March
• Are these top ASX shares dirt cheap and must-buys right now?
• Why Bega Cheese, Domino’s, Lovisa, and Universal Store shares are rocketing today
• Here are 3 ASX retail shares moving up to 19% on half-year results today
• 3 Australian value stocks to buy right now

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.

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Life360 Inc (ASX: 360) shares were on fire on Friday.

The location technology company’s shares rocketed almost 40% following the release of its FY 2023 results.

For the 12 months ended 31 December, Life360 reported a 33% increase in revenue to US$305 million and adjusted EBITDA of US$20.6 million. The latter was well ahead of its guidance range of US$12 million to US$16 million.

The key driver of this growth was its core Life360 subscription revenue, which came in at US$200 million. This was up 52% year on year and ahead of guidance for a ~50% increase.

The good news is that management expects more of the same in FY 2024. It is guiding to revenue of US$365 million to US$$375 million and adjusted EBITDA of US$30 million to US$35 million.

The midpoint of Life360’s guidance range implies revenue growth of 21% and adjusted EBITDA growth of 58%.

Life360 shares tipped to keep rising

Pleasingly for shareholders, Goldman Sachs believes that this is just the beginning of greater gains.

In response to its results, the broker has reiterated its buy rating and lifted its price target by a third to $14.20. This implies 26% upside for Life360s shares from current levels.

Commenting on the result and plans to expand into advertising, it said:

Solid subscription growth outlook cycling material price increases. FY24 EBITDA guidance appears conservative, with significant earnings growth into FY24/25E. […] Given our long-held view that Life360’s subscription business remains undervalued, we view the potential advertising upside as effectively a “free” option.

The broker then concludes:

The company is now scaling margins and earnings rapidly off a low base, with attractive unit economics and potential structural profitability tailwinds on the horizon from a reduction in effective app store fees. Life360’s Subscription business currently trades at a discount to global subscription app peers when adjusting for its superior growth outlook. We see scope for re-rating as Life360 demonstrates operating leverage, ongoing subscription growth and user monetisation. We are Buy rated on Life360.

The post Why Life360 shares can keep rocketing appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Monday
• Here’s how the ASX 200 market sectors stacked up this week
• Here are the top 10 ASX 200 shares today
• Why Core Lithium, Life360, Syrah, and Xero shares are jumping today
• Life360 share price rockets 24% after smashing FY23 earnings expectations

Motley Fool contributor James Mickleboro has positions in Life360. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group and Life360. 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.

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ASX shares that pay dividends can be a great choice for people in their 60s. This is because of their ability to grow profit, pay dividends and hopefully deliver long-term capital growth.

There are lots of different choices out there, including listed investment companies (LICs) and exchange-traded funds (ETFs). I’m going to talk about three specific businesses that look compelling for their passive income and possible share price growth.

Healthco Healthcare and Wellness REIT (ASX: HCW)

This is a real estate investment trust (REIT), which means it owns commercial properties. It’s focused on healthcare and wellness buildings.

In the FY24 first half, private hospitals made up 56% of Healthco’s income. Primary and specialty care facilities accounted for 18%, and 4% was generated by aged care. Another 17% was from childcare and government, life sciences and research tenants.

The ASX share has an occupancy rate of more than 99% and a weighted average lease expiry (WALE) of over 12 years. Around 75% of the portfolio has rental increases linked to CPI inflation, providing protection against inflation.

Pleasingly, it has a development pipeline worth at least $1 billion, which can unlock further rental profits.

The business is expecting to grow its FY24 distribution by 5% to 8 cents per share. At the current Healthco Healthcare and Wellness REIT share price, that represents a distribution yield of 5.8%.

Sonic Healthcare Ltd (ASX: SHL)

Sonic is one of the world’s biggest pathology businesses, with a significant position in Australia, the United States, Germany and the United Kingdom. It also has a smaller presence in a few other countries like New Zealand and Switzerland.

The ASX share has a stated progressive dividend policy, meaning the board of directors want to grow the dividend when they can.

The FY24 first-half result saw ongoing organic growth of revenue (up 6%), and the company increased the dividend per share by 2% to 43 cents per share. This means the dividend yield is 3.6%, excluding franking credits.

There are a number of tailwinds for healthcare businesses, including growing populations, ageing tailwinds and improving technology.

Coles Group Ltd (ASX: COL)

Most people would be familiar with Coles — one of the leading supermarket businesses in Australia.

Its initiatives — including growing its own brand products, being more sustainable, cutting prices and selling ‘smarter’ — are helping to grow sales. In the first eight weeks of the third quarter of FY24, the supermarket segment saw revenue growth of 4.9%, underpinned by volume growth.

The ASX share is investing heavily in automated warehouses, which should help it become more efficient, lower costs, improve stock flow, help with e-commerce orders and so on.

The last two declared dividends from Coles amount to an annual dividend per share of 66 cents, which is a grossed-up dividend yield of 5.5%.

As Australia’s population grows, the number of potential customers increases, which is a useful tailwind in my opinion.

The post If I were 60 I’d buy these ASX shares for dividends appeared first on The Motley Fool Australia.

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More reading

• Top brokers name 3 ASX shares to buy next week
• 34 ASX 200 shares with ex-dividend dates next week
• Want to cash the latest Coles dividend? Here’s what you need to do
• $42 million tops the most notable ASX 300 insider buys this earnings season
• 3 ASX dividend shares to buy for a passive income boost

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 positions in and has recommended Coles Group. 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.

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The S&P/ASX 200 Index (ASX: XJO) will soon have some new members.

After the market close on Friday, S&P Dow Jones Indices announced changes to the benchmark index effective prior to the open of trading on Monday 18 March.

This follows the financial market indices provider’s March quarterly review.

Which shares are joining the index?

According to the release, audio visual solutions provider Audinate Group Ltd (ASX: AD8), gold miner Red 5 Ltd (ASX: RED), hotel technology company Siteminder Ltd (ASX: SDR), and coal miner Stanmore Resources Ltd (ASX: SMR).

This a big achievement for these companies and could give their shares a boost.

That’s because many fund managers have strict investment mandates allowing them to only invest in shares on the ASX 200 index and above. This is to stop them from risking investor funds in anything speculative outside the benchmark index.

So, if they have been waiting in the wings for an opportunity to purchase Audinate et al, then now is their chance.

In addition, index funds that track the ASX 200 index will need to buy shares to reflect the changes that have been announced.

Which ASX 200 shares are being dumped?

If four shares are entering the ASX 200, it means that four are heading to the exits.

These will be mineral exploration company Chalice Mining Ltd (ASX: CHN), lithium miners Core Lithium Ltd (ASX: CXO) and Sayona Mining Ltd (ASX: SYA), and semiconductor company Weebit Nano Ltd (ASX: WBT).

Their exit could be bad news for their shares for the exact opposite reasons listed above. Fund managers and index funds may have to offload them in the near future.

Though, conversely, there’s a small chance that this could yet prove to be a positive. With all four of these ASX 200 shares on the most shorted list, short sellers may be forced to buy shares to close positions if they’re not allowed to short outside the benchmark index.

The post Guess which 4 shares are being dumped from the ASX 200 index appeared first on The Motley Fool Australia.

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More reading

• Here’s the latest lithium price forecast through to 2027
• These are the 10 most shorted ASX shares
• 6 ASX shares to buy and hold until the next leap year
• Here are the top 10 ASX 200 shares today
• Why Core Lithium, Life360, Syrah, and Xero shares are jumping today

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

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Vanguard Australian Shares Index ETF (ASX: VAS) is the most popular exchange-traded fund (ETF) on the ASX. I will outline some reasons why there may be even better ASX ETFs to invest in.

At the end of January 2024, the ETF size was $14.6 billion. This money is largely allocated to the ASX’s biggest blue-chip holdings including BHP Group Ltd (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA), CSL Ltd (ASX: CSL), National Australia Bank Ltd (ASX: NAB), Westpac Banking Corp (ASX: WBC), ANZ Group Holdings Ltd (ASX: ANZ), Macquarie Group Ltd (ASX: MQG) and Wesfarmers Ltd (ASX: WES).

The VAS ETF is a good investment, but here are some things to think about.

Not the cheapest way to invest in ASX shares

One major reason to like the VAS ETF is its very cheap management fee. The lower the cost, the bigger the returns that stay in the hands of the investor. The VAS ETF has an annual fee of just 0.07%.

Vanguard is great at offering low-cost ETFs, and I believe it will always be very competitive. But, the BetaShares Australia 200 ETF (ASX: A200) is even cheaper. It has an annual management fee of 0.04%.

So while the fees are quite similar, and the allocation to the larger positions is similar, I can’t ignore the fact that A200 is actually a cheaper way to do it.

Not much technology exposure

If we look at the best-performing shares over the past 10 or 20 years on the ASX or global share markets, many are in the technology space — or at least technology is a significant component in the service/offering.

The ASX has some great companies like REA Group Limited (ASX: REA), Altium Limited (ASX: ALU), WiseTech Global Ltd (ASX: WTC), Pro Medicus Ltd (ASX: PME) and TechnologyOne Ltd (ASX: TNE). But they aren’t major parts of the S&P/ASX 300 Index (ASX: XKO).

Global tech companies like Microsoft, Alphabet, Apple and Meta Platforms are already some of the biggest in the world. But the ASX and the Vanguard Australian Shares Index ETF don’t offer exposure to tech the way that some other funds do.

The Betashares Nasdaq 100 ETF (ASX: NDQ) in one ETF that offers exposure to those large technology companies, and it gives much more allocation to tech than the VAS ETF.

Not a lot of diversification

Tech has been a great-performing sector for a while, but I’d suggest the VAS ETF is too heavily weighted to ASX financial shares (29%) and ASX mining shares (23.7%). Those two sectors alone make up more than half of the Vanguard Australian Shares Index ETF portfolio.

While financials and miners are known for paying good dividends, they’re not exactly known for strong compounding growth year after year.

Plenty of other ETFs on the ASX have more even allocation between different sectors.

Vanguard MSCI Index International Shares ETF (ASX: VGS), which invests in the global share market, has a double-digit allocation to five different sectors: IT (24.1%), financials (14.8%), healthcare (12.3%), industrials (11.1%) and consumer discretionary (10.7%).

I think diversification plays an important role in building a quality portfolio. VAS ETF is decent, but others are more diversified, such as the VGS ETF.

The post 3 reasons to buy another ASX ETF over the Vanguard Australian Shares Index ETF (VAS) appeared first on The Motley Fool Australia.

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More reading

• 3 excellent ASX ETFs to buy in March
• 14% in 4 months: How has the Vanguard Australian Shares ETF (VAS) managed it?
• How much would I need to invest in ASX shares for a retirement income of $80,000 per year?
• A once-in-a-decade chance to get rich from ASX 200 shares?
• Is the Vanguard Australian Shares Index ETF (VAS) a good buy for beginners?

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 positions in Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Altium, Apple, BetaShares Nasdaq 100 ETF, CSL, Macquarie Group, Meta Platforms, Microsoft, Pro Medicus, REA Group, Technology One, Wesfarmers, and WiseTech Global. 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 BetaShares Nasdaq 100 ETF, Macquarie Group, Wesfarmers, and WiseTech Global. The Motley Fool Australia has recommended Alphabet, Apple, CSL, Meta Platforms, Pro Medicus, REA Group, Technology One, and 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.

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Investors were piling back into ASX lithium stocks last week at long last.

Core Lithium Ltd (ASX: CXO), IGO Ltd (ASX: IGO), Liontown Resources Ltd (ASX: LTR), and Pilbara Minerals Ltd (ASX: PLS) all recorded strong weekly gains.

This was driven by a rebound in lithium futures in China, which has sparked hopes that the lithium rout is finally over.

Is this actually the case? Well, let’s see what Goldman Sachs is saying after its analysts released their latest lithium price estimates for the coming years.

Lithium price forecast to 2027

Here’s how spot prices are looking this week compared to late January:

• Lithium carbonate – China: US$12,604 per tonne (January: US$11,867)
• Lithium hydroxide – China: US$9,653 per tonne (January: US$9,899)
• Spodumene 6%: US$910 per tonne (January: US$1,000)

As you can see above, there has been an uptick in lithium carbonate prices since late January. Though, the same cannot be said for lithium hydroxide and spodumene 6% prices.

But where to from here?

Let’s see what Goldman is forecasting for lithium prices out to 2027 and also the long-term average.

Lithium carbonate – China:

• 2024: US$12,847 per tonne
• 2025: US$11,000 per tonne
• 2026: US$13,323 per tonne
• 2027: US$15,646 per tonne
• Long-term: US$15,500 per tonne

Lithium hydroxide – China:

• 2024: US$13,795 per tonne
• 2025: US$12,500 per tonne
• 2026: US$14,323 per tonne
• 2027: US$16,146 per tonne
• Long-term: US$15,500 per tonne

Spodumene 6%:

• 2024: US$1,175 per tonne
• 2025: US$800 per tonne
• 2026: US$978 per tonne
• 2027: US$1,155 per tonne
• Long-term: US$1,150 per tonne

Based on the above, it is apparent that Goldman Sachs isn’t expecting prices to rebound meaningfully from current levels.

So, if you’re buying ASX lithium stocks on the assumption that they will surge soon, it might be worth taking this into consideration.

And while actual prices could ultimately vary significantly from Goldman’s estimates, its analysts have been spot on with their estimates over the last 18 months. So, they certainly know what they’re talking about.

The post Here’s the latest lithium price forecast through to 2027 appeared first on The Motley Fool Australia.

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More reading

• These are the 10 most shorted ASX shares
• 3 ASX lithium shares with huge upside to buy in March
• 6 ASX shares to buy and hold until the next leap year
• Here are the top 10 ASX 200 shares today
• Why Core Lithium, Life360, Syrah, and Xero shares are jumping today

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.

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At the start of each week, I like to look at ASIC’s short position report to find out which shares are being targeted by short sellers.

This is because I believe it is well worth keeping a close eye on short interest levels as high levels can sometimes be a sign that something isn’t quite right with a company.

With that in mind, here are the 10 most shorted shares on the ASX this week according to ASIC:

• Pilbara Minerals Ltd (ASX: PLS) continues its long run as the most shorted ASX share after its short interest held firm at 21%. Short sellers don’t appear to believe that lithium prices will be improving meaningfully in the near term.
• Syrah Resources Ltd (ASX: SYR) has short interest of 17.1%, which is down week on week. This graphite producer’s shares jumped last week thanks to a new offtake agreement.
• Core Lithium Ltd (ASX: CXO) has short interest of 11.3%, which is down again week on week. This lithium miner plans to suspend production to reduce costs while prices are low.
• Chalice Mining Ltd (ASX: CHN) has short interest of 9.9%, which is up week on week. This mineral exploration company’s production is still years away, making it hard to value its project.
• Deep Yellow Limited (ASX: DYL) has seen its short interest rise slightly to 9.9%. Short sellers don’t appear to believe that uranium prices will be as strong as the market is predicting.
• IDP Education Ltd (ASX: IEL) has 9.3% of its shares held short, which is down sharply week on week. This language testing and student placement company’s shares have fallen heavily over the last 12 months due to student visa changes.
• Genesis Minerals Ltd (ASX: GMD) has seen its short interest remain flat at 9.2%. This appears to be due to concerns over integration risks from its recent acquisition spree.
• Sayona Mining Ltd (ASX: SYA) has 8.5% of its shares held short, which is down week on week. A large shareholder recently sold off its stake at a big discount.
• Flight Centre Travel Group Ltd (ASX: FLT) has 8.4% of its shares held short, which is flat week on week. Last week, the travel agent released a half-year result that fell short of expectations.
• Weebit Nano Ltd (ASX: WBT) has short interest of 7.9%, which is down week on week. Valuation and revenue generation concerns are likely to be behind this.

The post These are the 10 most shorted ASX shares appeared first on The Motley Fool Australia.

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More reading

• Which ASX shares delivered the biggest profit jumps of the earnings season?
• Here are the top 10 ASX 200 shares today
• 34 ASX 200 shares with ex-dividend dates next week
• Why Core Lithium, Life360, Syrah, and Xero shares are jumping today
• Why are Core Lithium shares jumping 12% on Friday?

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

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ANZ Group Holdings Ltd (ASX: ANZ) shares have been on an excellent run for shareholders. They have risen 10.6% this year and 17.7% in the last three months. That compares to a 1.5% rise for the S&P/ASX 200 Index (ASX: XJO) this year and 8.7% over the past three months.

The ANZ share price performance has surprised and impressed me. Should I be more optimistic about the bank?

Reasons to be optimistic about ANZ

An ASX bank share — or any share, for that matter — that delivers good returns, is a good thing for shareholders.

Investors appear to be more confident lately about the economic situation in Australia. Inflation is slowly but surely coming down, which is raising the prospect of interest rate cuts starting this year.

Lower interest rates would reduce the risk of too many borrowers going into arrears and could also increase demand for credit.

ANZ Bank has received approval to buy the banking division of Suncorp Group Ltd (ASX: SUN). This will boost the scale of ANZ’s operations and allow it to compete more strongly in Queensland.

On the dividend front, the ASX bank share is expected to pay an annual dividend per share of $1.62 in the 2024 financial year, which translates into a grossed-up dividend yield of 8%.  

Reasons to stick with my opinion

The ANZ share price has done well, but according to Commsec, its profit is still expected to fall in FY24 (and FY25) amid strong banking competition and the likely rise of arrears.

If profit goes down and the ANZ share price goes up, it suggests its price/earnings (P/E) ratio is increasing, and the company is becoming more expensive.

I think a business needs to demonstrate evidence of increasing profit potential to justify a higher share price, which could be a while away. I’m not convinced that ANZ’s recent rise correlates with an improvement in its profit outlook.

ANZ shares have done well in the last few weeks and months and I’m not saying the bank is a terrible business. But I believe there are other ASX shares that can deliver stronger returns over time.

The post Is it time for me to change my tune about ANZ shares? appeared first on The Motley Fool Australia.

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More reading

• Why these 4 ASX 200 shares grabbed the Motley Fool’s headlines this week
• 3 ASX 100 and ASX 200 shares I’d buy now for a $1,820 passive income in 2024!
• Why ARB, Bravura, Hub24, and Suncorp shares are storming higher
• ANZ shares tumble despite Suncorp Bank takeover approval
• How will ANZ shares react to a big week of ASX news?

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.

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