Stock Pick

  • Guess which ASX All Ords stock just rocketed 9% after being added to the ASX 200

    a small child in a judo outfit with a green belt strikes a martial arts pose with his hand thrust forward and a cute smile on his face.

    This ASX All Ords stock is enjoying a tremendous run today after investors learned it was graduating from the All Ordinaries Index (ASX: XAO) and will soon be joining the S&P/ASX 200 Index (ASX: XJO).

    Shares in the bank stock, which specialises in business lending, closed yesterday trading for $1.30. As we head into the Wednesday lunch hour, shares are changing hands for $1.42 apiece, up 9.2%.

    For some context, the All Ordinaries and the ASX 200 are both down 0.7% at this same time.

    Any guesses?

    If you said Judo Capital Holdings Ltd (ASX: JDO), go to the head of the virtual class.

    Here’s what’s happening with the soon-to-be-relisted ASX All Ords stock.

    ASX All Ords stock soars on index upgrade

    In an announcement released after market close yesterday, S&P Dow Jones Indices said that it would remove building products company CSR Ltd (ASX: CSR) from the ASX 200 as the company is being acquired by Compagnie de Saint-Gobain.

    That takeover unfolded in late February when Saint-Gobain offered $9.00 a share to acquire all of CSR’s stock. The takeover, and CSR’s removal from the ASX, remains subject to shareholder and final court approval of the scheme of arrangement.

    This is proving to be good news for Judo shareholders, as the ASX All Ords stock will replace CSR in the ASX 200 effective prior to the open of trading on Thursday, June 20.

    Stocks often benefit when they’re moved to the more prominent indexes, like the ASX 200. That’s because these companies tend to get more media and broker coverage. There are also a lot of fund managers who can only invest in larger companies listed on the ASX 200. And, as of next week, Judo will meet that requirement.

    What’s been going right for Judo shares?

    The ASX All Ords stock is joining the ASX 200 following a tremendous 41% share price surge in 2024. That gives Judo a market cap of almost $1.6 billion, which sees it move into the group of top 200 listed companies in Australia.

    In its most recent market update on 9 May, the bank reported $93.1 million in profit before tax for the nine months ending 31 March amid ongoing lending growth.

    Looking ahead, the ASX All Ords stock (soon to be ASX 200 stock) forecast FY 2024 profit before tax, excluding non-recurring items, of $107 million to $112 million. FY 2025 guidance is targeting 15% year on year profit before tax growth.

    The post Guess which ASX All Ords stock just rocketed 9% after being added to the ASX 200 appeared first on The Motley Fool Australia.

    Should you invest $1,000 in Judo Capital Holdings Limited right now?

    Before you buy Judo Capital Holdings Limited shares, consider this:

    Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Judo Capital Holdings Limited wasn’t one of them.

    The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    And right now, Scott thinks there are 5 stocks that may be better buys…

    See The 5 Stocks
    *Returns as of 5 May 2024

    More reading

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

  • BHP share price slips as union takes legal action

    A worker in hi vis gear holds his hand up saying no.

    The BHP Group Ltd (ASX: BHP) share price jolted in early trading on Wednesday and is now drifting 0.85% lower at $43.37 apiece.

    While the miner has no company-specific news out today, the Mining and Energy Union (MEU) reports it has filed a series of applications in the Fair Work Commission regarding three of BHP’s coal mines.

    Here’s a closer look at what this means for investors and the BHP share price.

    BHP share price drifts as union files suit

    The MEU says it has launched a legal battle against BHP with the Fair Work Commission. It is aiming to increase the pay of 1700 labour-hire workers at three of BHP’s sites from $10,000 to $40,000 annually.

    The union filed applications with the commission on Wednesday for “same job, same pay” orders covering such workers at BHP’s Peak Downs, Saraji, and Goonyella Riverside coal mines. These assets are a part of the BHP-Mitsubishi Alliance (BMA) but are operated solely by BHP.

    BMA operates five coal mines in Queensland, including the three mentioned above. Its enterprise agreement, constructed in 2022, governs rates of pay for those workers directly employed at the site.

    It does not cover labour-hire workers at the site, however. The “same job, same pay” orders argue against this. The total of 10 applications covers labour-hire workers employed by WorkPac, Chandler Macleod, and BHP subsidiary Operations Services.

    The MEU alleges that BHP’s current labour hire practices drive down wages and job security, labelling it a “labour-hire rort”.

    MEU Queensland president Mitch Hughes had this to say:

    BHP has driven the casual labour hire model that has spread like a cancer throughout coal mining…

    Today’s applications are a major step towards stamping out this model and closing the loopholes that have allowed BHP to avoid paying fair rates in site enterprise agreements. 

    BHP must accept that using labour hire purely to cut pay is out of step with community standards and is now out of step with the law.

    There is no talk on whether the union’s move could potentially disrupt BHP’s operations and increase labour costs. BHP has yet to respond to the applications at the time of publication.

    Implications for BHP

    The MEU says it plans to expand its “same job, same pay” campaign across the coal industry, targeting other BHP operations and potentially affecting thousands of workers. This could set a precedent impacting labour hire practices industry-wide.

    Despite the legal challenges, I think the BHP share price will likely remain resilient, as nothing has changed fundamentally for the company at this stage.

    Goldman Sachs recently reinstated coverage of BHP shares with a buy rating and a price target of $49.00. This suggests a potential upside of 13% over the next 12 months. Goldman highlights BHP’s robust position as Australia’s largest miner, underpinned by strong fundamentals and favourable market conditions.

    BHP shares have traded within a tight range in the last 12 months and are down 2% in that time. This year to date, as the S&P/ASX 200 Index (ASX: XJO) has lifted around 1.5%, the BHP share price is 14% in the red.

    The post BHP share price slips as union takes legal action appeared first on The Motley Fool Australia.

    Should you invest $1,000 in Bhp Group right now?

    Before you buy Bhp Group shares, consider this:

    Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Bhp Group wasn’t one of them.

    The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    And right now, Scott thinks there are 5 stocks that may be better buys…

    See The 5 Stocks
    *Returns as of 5 May 2024

    More reading

    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.

  • Ikea was losing 60,000 employees a year. Here’s how the retailer worked to fix its staff turnover problem.

    An Ikea storefront in China.
    An Ikea store in China.

    NurPhoto/Getty Images

    • Ikea was facing soaring employee turnover rates coming out of the pandemic.
    • Executives at the Swedish furniture company set about trying to keep employees happy enough to stay.
    • The company bumped wages, offered more flexibility, and simplified workflows, according to Bloomberg. 

    Ikea tackled sky-high employee turnover rates by increasing wages, offering more flexibility, and simplifying staff workflow — seemingly simple changes that have made a world of difference for the Swedish furniture retailer, according to a recent Bloomberg report.

    Every time an Ikea employee left the furniture magnate, the company lost $5,000 or more, according to the outlet. Amid a worsening wave of workers quitting in recent years, Ikea executives set about trying to keep workers happy and employed.

    Retail has always had higher quit rates than many other industries due to difficult working conditions, unpredictable scheduling, and low pay. However, the COVID-19 pandemic and increasing inflation have only exacerbated the problem in recent years. 

    By 2022, Ikea was losing about 62,000 workers each year for various reasons — nearly one-third of its workforce, Bloomberg reported. The mounting conflict between the company and a coalition of unions had also left morale low across many of Ikea's 473 stores worldwide, according to the outlet. 

    Jon Abrahamsson Ring, chief executive of Inter Ikea Group — the overhead entity in charge of Ikea's product design and supply chain — told Bloomberg that retention was a high priority when he stepped into the CEO role in September 2020. Turnover rates were hovering above 30% in stores across the US, UK, and Canada, while employees in India regularly left the company after having children because of lackluster benefits, he told the outlet. 

    In trying to fix its quitting problem, Ikea went full-steam ahead in addressing the most important issues to workers, Ring told the outlet, including better pay, more flexibility for employees, and integrating new technologies to make employees' jobs easier. 

    It paid off: Ikea's global quit rate fell from 22.4% in August 2022 to 17.5% in April 2024, Bloomberg reported. In the US alone, voluntary turnover dropped from about a third of employees in 2022 to about a fourth one year later, according to the outlet.

    Prioritizing employee wants and needs is a key way to make people stay, Business Insider previously reported. A recent study also found that companies offering robust childcare benefits see increased employee productivity and positive returns on investment. 

    Ikea's fixes, while major, aren't perfect. Turnover at Ikea stores in Japan is up due to a tight labor market, while labor disputes in France have kept quit rates high, Bloomberg reported. 

    But the still-rising rates of attrition in the retail sector suggest Ikea has begun to make real change on the turnover front.

    Read the original article on Business Insider

  • These 3 ASX 200 shares were just rerated by top brokers

    A male sharemarket analyst sits at his desk looking intently at his laptop with two other monitors next to him showing stock price movements

    Three S&P/ASX 200 Index (ASX: XJO) just got rerated by leading brokers.

    One had its outlook cut.

    The other two received boosted forecasts.

    Read on for the details.

    (Broker data courtesy of The Australian.)

    One ASX 200 share getting downgraded

    First, we turn to the ASX 200 share getting its rating cut today, software designer Altium Ltd (ASX: ALU).

    Altium shares are down 0.1% in early trade today, changing hands for $67.48 apiece. That sees the Altium share price up 45% in 2024. The stock also trades on a partly franked trailing dividend yield of 0.9%.

    Much of this year’s strong performance stems from February’s $9.1 billion takeover offer lobbed by Japan’s Renesas Electronics Corporation. An offer the board supports and one that’s headed for a shareholder vote.

    The takeover offer values Altium at $68.50 per share.

    That also happens to be Citi’s price target for the stock. The broker doesn’t appear to see any further upside from there and has cut this ASX 200 share’s rating to neutral.

    Two large caps getting upgrades

    Moving onto the ASX 200 shares earning upgrades, we kick off with iron ore miner Champion Iron Ltd (ASX: CIA).

    The Champion Iron share price is up 0.9% in morning trade today at $6.66. But following on this year’s slide in iron ore prices, Champion Iron share remain down 22% in 2024. The stock also trades on an unfranked trailing dividend yield of 2.3%.

    Macquarie believes that the sell-off has been overdone.

    The broker raised Champion Iron to an outperform rating with a $7.90 price target. That represents a potential upside of almost 19% from current levels.

    The miner released some promising FY 2024 results on 31 May. Among the highlights, the company achieved all-time high earnings before interest, taxes, depreciation and amortisation (EBITDA) of C$553, an 11% increase from the prior year.

    Which brings us to the second ASX 200 share getting a broker upgrade, Aussie oil and gas giant Woodside Energy Group Ltd (ASX: WDS).

    The Woodside share price is up 1.4% today, at $27.46 a share. That still leaves the stock down 13% in 2024. And it sees Woodside shares trading at a fully franked trailing yield of 7.9%.

    According to Macquarie equities analyst Mark Wiseman, Woodside shares are now trading at bargain levels. Macquarie raised Woodside shares to an outperform rating with a $32.00 price target (unchanged). That represents a potential upside of almost 17% from current levels.

    According to Wiseman, Woodside shares have been oversold based on excessive concerns over the company’s project and climate risks.

    On the project risk front, yesterday the ASX 200 share reported it had achieved its first oil from the offshore Sangomar project in Senegal. Sangomar is one of the company’s major growth projects that’s come under scrutiny following government elections in the African nation in March.

    According to Wiseman (quoted by The Australian):

    We see upside potential from the ramp-up of the Sangomar project, ability to book additional reserves. In 12 to 24 months Woodside can determine whether a phase 2 project is viable.

    The post These 3 ASX 200 shares were just rerated by top brokers appeared first on The Motley Fool Australia.

    Should you invest $1,000 in Altium Limited right now?

    Before you buy Altium Limited shares, consider this:

    Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Altium Limited wasn’t one of them.

    The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    And right now, Scott thinks there are 5 stocks that may be better buys…

    See The 5 Stocks
    *Returns as of 5 May 2024

    More reading

    Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Altium 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.

  • Up 12% in 2024, this ASX 200 stock is a top pick for June

    A group of people clink wine glasses in an outdoor, late afternoon setting to celebrate the rising Treasury Wine share price

    Now that we are halfway through the calendar year, many investors may be rethinking the kind of ASX 200 stock they need for their portfolios.

    The ASX share market has shifted dynamics since the beginning of January. The S&P/ASX 200 Index (ASX: XJO) has climbed less than 2%, but many stocks have outperformed.

    Treasury Wine Estates Ltd (ASX: TWE) has seen its shares rise by almost 12% year-to-date, trading at $12.04 apiece at the time of publication.

    This strong performance and broker confidence make it a standout ASX 200 stock to consider this June, in my opinion. Let’s explore why it is on the rise and what this means for potential investors.

    Why is this ASX 200 stock performing well?

    Investors have been lifting the bid on Treasury Wine Estates shares following a number of positive updates.

    For one, it recently reaffirmed its guidance for FY 2024. Management is projecting an upper estimate of growth in pre-tax income to $228 million. Recent acquisitions of Frank Family and DAOU have grown earnings, it says.

    The company also aims to expand the global reach of its premium Penfolds brand and increase its market share in the US, according to my colleague James.

    Earlier in the year, a boost of confidence came when the Chinese Ministry of Commerce announced that China had fully lifted all tariffs on Australian wines. This enabled the company to “commence partnering with its customers in China” and continue its growth route.

    Broker confidence

    Goldman Sachs is bullish on the ASX 200 stock, too, reiterating its buy rating with a price target of $13.40 in a note last week. This implies a potential return of 12% and nearly 15%, including projected dividends.

    The broker is positive on the wine merchant given a more attractive growth outlook and its consumer advantages in the luxury segment.

    This might be positive for bottom-line growth, analysts say.

    [W]e reiterate buy given the positive delivery of the strategy reset as well as attractive double-digit EPS growth at an attractive valuation. The stock is trading at 1yr forward [price-to-earnings ratio] of 20x. The key catalyst for the stock will now be its June 20 Business Update focused on China.

    Goldman also touched on the “continued global expansion of Penfolds, especially post the removal of China import tariffs”.

    The broker expects nearly 15% sales growth from the company each year until FY 2026. This while “reinventing itself as the number 1 US luxury wine company” after the “growth and margin accretive” acquisitions of Frank Family and DAOU.

    What’s next for Treasury Wine Estates?

    Goldman reckons investors should keep an eye on the ASX 200 stock’s upcoming business update, which is scheduled for June 20 and will focus on China.

    This update should provide further insights into the company’s strategy and potential growth opportunities in the Chinese market. The company outlined its strategy in its interim results back in February.

    Analysts also anticipate improvements in return on invested capital (ROIC) over the next two years, further positioning the company for growth.

    Top ASX 200 stock for June

    Treasury Wine Estates has demonstrated robust performance in 2024, with shares outperforming the benchmark. With the potential for further growth – particularly in the North American and Chinese markets – it could be well-positioned, in my opinion.

    Strong guidance, strategic expansions, and broker confidence are three reasons that highlight the company as a top ASX 200 stock to watch this June.

    The post Up 12% in 2024, this ASX 200 stock is a top pick for June appeared first on The Motley Fool Australia.

    Should you invest $1,000 in Treasury Wine Estates Limited right now?

    Before you buy Treasury Wine Estates Limited shares, consider this:

    Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Treasury Wine Estates Limited wasn’t one of them.

    The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    And right now, Scott thinks there are 5 stocks that may be better buys…

    See The 5 Stocks
    *Returns as of 5 May 2024

    More reading

    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 recommended Treasury Wine Estates. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

  • Overinvested in BHP shares? Here are two alternative ASX dividend stocks

    A tattoed woman holds two fingers up in a peace sign.

    Owning BHP Group Ltd (ASX: BHP) shares is popular for passive income, but it’s not the only ASX dividend stock that can provide a sizeable dividend yield.

    The ASX mining share generates strong cash flow and usually decides on a generous dividend payout ratio, but we don’t want to put all of our investment eggs in one basket. I think it’s worthwhile owning a variety of businesses that can offer strong dividends.

    I like BHP’s commodity diversification, including iron ore, copper, and potash, and the two stocks below could be useful additions.

    Coles Group Ltd (ASX: COL)

    Coles is one of the largest supermarket businesses in Australia. We all need to eat, so I think the business is capable of producing defensive earnings. It could provide a more consistent earnings and dividend profile than BHP shares, in my opinion.

    If I’m investing for passive income, ideally the payouts can continue even if there’s an economic downturn.

    The ASX dividend stock has managed to keep increasing its annual payout each year since it demerged from Wesfarmers Ltd (ASX: WES) and became its own business in late 2018.

    The supermarket business continues to see solid sales performance – in the third quarter of FY24, supermarket revenue rose 5.1% to $9.06 billion. If it can continue growing at this pace, it could outperform Woolworths Group Ltd‘s(ASX: WOW) sales.

    According to the estimates on Commsec, owners of Coles shares could receive a grossed-up dividend yield of 5.5% in FY24 and 6.7% in FY26.

    Step One Clothing Ltd (ASX: STP)

    Step One is a direct-to-consumer online retailer of ‘innerwear’. Its exclusive range is, according to the company, “high quality, organically grown and certified, sustainable, and ethically manufactured innerwear”.

    I think the company offers a compelling product. There is a certain level of demand for ‘greener’ products in a world that aims for net zero emissions in 2050.

    The company currently makes a majority of its revenue in Australia, but excitingly it’s growing in the UK and the US, which are much larger markets. In the FY24 first-half result, UK revenue rose 38% to $14.6 million and US revenue increased 256% to $4.1 million. This helped total revenue increase 25.5% to $45 million in HY24.

    The HY24 result also saw increasing profit margins, with net profit after tax (NPAT) rising by 34.7% to $7.1 million.

    The ASX dividend stock is pursuing several growth initiatives, such as expanding its women’s product lines, forming partnerships with retailers and organisations, entering the US market with its women’s product lines, and diversifying its sales channels and marketplaces.

    It currently has a grossed-up dividend yield of 8%, which is a solid starting yield, in my opinion.

    The post Overinvested in BHP shares? Here are two alternative ASX dividend stocks appeared first on The Motley Fool Australia.

    Should you invest $1,000 in Coles Group Limited right now?

    Before you buy Coles Group Limited shares, consider this:

    Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Coles Group Limited wasn’t one of them.

    The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    And right now, Scott thinks there are 5 stocks that may be better buys…

    See The 5 Stocks
    *Returns as of 5 May 2024

    More reading

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

  • Apple will let users opt out of ChatGPT integration. It’s a ‘brilliant’ move to calm mounting AI privacy concerns, analyst says

    Apple WWDC 2024
    ChatGPT with Apple WWDC 2024

    Apple

    • Apple has entered the AI race and struck a deal with hotshot startup OpenAI.
    • But Apple is promising users they'll have the power to opt out of ChatGPT integration.
    • An AI analyst said that control could go a long way in assuaging AI-wary Apple customers. 

    Apple has officially entered the AI wars, announcing a series of coming artificial intelligence features, including an anticipated collaboration with OpenAI that could magnify mounting privacy concerns within the tech sector.

    At the Worldwide Developers Conference on Monday, the company introduced Apple Intelligence, an in-house suite of AI services coming to devices this fall. While Apple's branded AI was the focal point of Monday's keynote, the company also announced a highly-anticipated partnership with OpenAI, albeit somewhat unceremoniously.

    Starting later this year, Apple users will have free access to OpenAI's ChatGPT model without having to create an account. ChatGPT will be integrated with Apple's new and improved Siri feature, allowing the AI model to scour the internet and quickly answer user questions.

    Apple noted that the ChatGPT integration will be optional for users. Customers can opt out of OpenAI's presence on their devices, which could go a long way in assuaging AI-wary users about privacy concerns.

    "I think it's brilliant," said Maribel Lopez, an AI analyst and founder of research and strategy consulting firm Lopez Research. "Because I do think we're going to get to a point where people are not willing to make that tradeoff."

    Apple's assurances come amid growing concerns over OpenAI's commitment to safety. A group of current and former employees went public earlier this month in a New York Times report with worries over the company's financial motivations and approach to creating responsible AI.

    OpenAI trains ChatGPT on user interactions and information. Generative AI trained in this way could eventually correctly guess sensitive information about a person based on what they type online, Business Insider previously reported.

    "Some people are OK with that, and some people aren't," Lopez said. "But if you provide a platform and say there's no way to opt out of it, that could be difficult."

    The opt-out ability on Apple devices offers customers a modicum of control amid the coming freight train of AI, Lopez added.

    Apple is notably taking a safety-first approach to adopting AI. The company said Monday that it did not use customers' private or personal data to train the foundation models that will power Apple Intelligence. Instead, the Apple model was trained on licensed data and publicly available information. The system will also be operated via Private Cloud Compute, an infrastructure designed to handle large AI requests privately.

    Meanwhile, much of the marketing for Apple Intelligence already appears to be focused on safety and privacy protection, with advertisements boasting a "brand-new standard for privacy in AI." 

    Apple's apparent commitment to privacy, as well as its need to protect its strong brand, could explain why the company was late to the AI game, Lopez said.

    "Everybody says they're behind, but I think they took a lot of time trying to work through these things," she said. "Because maybe Sam Altman doesn't get sued. But Apple sure as heck does."

    Read the original article on Business Insider

  • 2 ASX companies that could benefit from warehouse shortages

    two women stand at a computer smiling in a large factory with high shelves piled with goods, as though working in logistics.

    The COVID-19 pandemic transformed our lives in many ways. Some changes were temporary, but others have stayed with us.

    One significant change is the shift in consumer behaviour. The surge in online shopping and demand for faster delivery times have added extra pressure on inventory supply and logistics. In response, many retailers are seeking options to enhance their warehouses and logistics centres.

    In this article, we’ll see two ASX-listed companies benefitting from this global trend.

    Why are industrial properties doing well?

    Ideally, these logistics centres should be located near metropolitan areas to provide quick access to large consumer markets and minimise transportation costs and delivery times.

    However, the availability of land surrounding these strategic locations is limited, with competing priorities for residential and other commercial uses exacerbating the shortage in land supply. Colliers elaborates on this dynamic in its report, saying:

    Demand for Australian industrial and logistics assets remains significant, with an unprecedented amount of capital seeking to expand or enter the sector.

    Record infrastructure spending on transport projects, coupled with the continued growth of e-commerce and low cost of debt has underscored demand, particularly along the east coast states where 78% of the Australian population resides.

    As reported by The Sydney Morning Herald, industrial properties are also benefiting from other factors. For example, there’s a big increase in data centres powered by artificial intelligence (AI). In addition, property investors are moving their interest away from offices, which don’t have much demand right now.

    Which ASX shares are ways to capitalise on this trend?

    Goodman Group (ASX: GMG) is a global integrated commercial and industrial property group. The company particularly specialises in owning, developing, and managing industrial real estate assets.

    In May, the company reported strong 3Q FY24 results, led by 4.9% like-for-like net property income growth and 98% occupancy across its partnerships. The robust business results led management to raise the company’s full-year guidance, expecting operating earnings per share growth of 13% in FY24.

    As my colleague James highlighted here, Goodman CEO Greg Goodman remains optimistic about the company’s future outlook. He said:

    The Group continues to execute on its strategy. The challenge of the uncertain interest rate environment, persistent inflation, combined with slowing economic growth, is prolonging volatility in global markets and increased cost of capital.

    In the near term, we believe aggregate logistics demand is likely to remain at more moderate levels compared to that experienced in the pandemic period. However, supply has been significantly reduced globally, and is generally very constrained in our markets.

    Our customers remain focused on maximising productivity from their space, preferring infill locations and increasing their investments in technology and automation. Combined with the scarcity of available assets in the markets we operate, should support rental growth and high occupancy.

    The Goodman share price is up 77% over the last 12 months.

    Brickworks Ltd (ASX: BKW) is a building materials provider on the surface but an industrial property developer at the heart. As I highlighted in this earlier article, much of Brickworks’ net tangible asset (NTA) worth $5.6 billion comes from its investments in listed shares and property ventures, which the company estimates to be worth $3.3 billion and $2 billion, respectively.

    In fact, its building material business accounts for less than 15% of its NTA, with the remainder comprising the company’s large stake in Washington H Soul Pattinson & Company (ASX: SOL) and property development joint ventures with Goodman group.

    Brickworks owns many parcels of land in prime locations around metropolitan areas, previously utilised for manufacturing building materials. Brickworks partnered with Goodman Group to develop its land holdings. Over time, the partnership has evolved, leading to Brickworks’ property division now managing two 50%/50% joint venture property trusts.

    One of its important land holdings is in Oaklands Estate located in Western Sydney, which is partially developed. Brickworks’ current rent in this area is well below the market rate, leaving room for rental income growth in the future. The company explained this in a recent investor presentation by saying:

    Theses structural trends, along with land supply issues, have driven up rent for prime industrial property in western Sydney by 55% in the past two years. We estimate that the current passing rent within the Industrial JV Trust of $147/m2 is now 35% below average market rent of $225/m2.

    Including the Brickworks Manufacturing Trust, the current annualised rent across our portfolio is $172 million. At market rates, the rent potential of Property Trust assets once fully developed is around $340 million. This includes an additional $88 million in rent from completion of our development estates (Oakdale West and Oakdale East) in western Sydney over the next five years.

    The Brickworks share price is up just 1.45% over the last 12 months.

    The post 2 ASX companies that could benefit from warehouse shortages appeared first on The Motley Fool Australia.

    Should you invest $1,000 in Brickworks Limited right now?

    Before you buy Brickworks Limited shares, consider this:

    Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Brickworks Limited wasn’t one of them.

    The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    And right now, Scott thinks there are 5 stocks that may be better buys…

    See The 5 Stocks
    *Returns as of 5 May 2024

    More reading

    Motley Fool contributor Kate Lee has positions in Brickworks. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Brickworks and Goodman Group. The Motley Fool Australia has positions in and has recommended Brickworks. 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.

  • Why Apple stock popped Tuesday morning

    Woman relaxing and using her Apple device

    This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

    Shares of Apple (NASDAQ: AAPL) were on a tear Tuesday morning, with the stock adding as much as 6.7%. As of 1:53 p.m. ET, the stock was still up 6.2%.

    The catalyst that sent the iPhone maker higher was the company’s big artificial intelligence (AI) reveal to kick off Apple’s Worldwide Developer Conference (WWDC).

    The long-awaited announcement

    Investors have been waiting since early last year for insight into Apple’s plans to join the AI revolution. At the WWDC keynote yesterday, CEO Tim Cook finally detailed the company’s plans, and Wall Street’s response was extremely bullish.

    The biggest revelation was the debut of Apple Intelligence, which will provide on-device generative AI processing across the company’s entire product line while also maintaining Apple’s famous emphasis on security.

    Siri will get a long-awaited AI upgrade and have a greater ability to interact with other iPhone apps. ChatGPT will also be integrated into the iPhone, giving users the option to engage the chatbot for specific topics. Apple also unveiled a host of other AI-powered features that will debut with iOS 18, which will be released this fall.

    Wall Street is once again bullish on Apple

    Many investors had taken a “wait and see” approach with Apple, worried about waning sales of its flagship iPhone. However, in the wake of the company’s presentation, Wall Street has turned decidedly bullish.

    Wedbush analyst Dan Ives expressed the prevailing sentiment, suggesting the addition of these new tools to the iPhone will spark “an AI-driven iPhone upgrade cycle starting with iPhone 16.” The analyst also suggested AI will add $30 to $40 per share to Apple’s growth story.

    Even as big tech has staged a significant rally over the past year, Apple’s stock has been the outlier, up just 7%, compared to 25% gains for the S&P 500. A laundry list of AI-powered features will likely mark the dawn of the next upgrade cycle, boosting the company’s results and putting Apple back in investors’ good graces. 

    This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

    The post Why Apple stock popped Tuesday morning appeared first on The Motley Fool Australia.

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    Danny Vena has positions in Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Apple. The Motley Fool Australia has recommended Apple. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

  • Want a $2 million superannuation fund? Here’s how I’d aim to build one with exactly $400 per month

    Having a superannuation account with $2 million sitting in it is a prospect that many Australians would find both equally tantalising and sobering.

    Tantalising because $2 million in super is enough to fund not just a comfortable retirement, but a lavish one. It would imply that one could enjoy an annual income of at least $80,000 (using the 4% rule) without even drawing down on the principal of that $2 million balance.

    But it is also sobering because, as we’ve discussed many times here at the Motley Fool, most Australians’ current superannuation balances are not nearly adequate to get them to $2 million before they hit the age of 67. As we discussed just last month, the average superannuation balance for someone aged between 70 and 74 in Australia was recently pinpointed at just $481,483.

    But even if you’re on a salary that is decidedly not in the 1% of income earners in Australia, I think getting to a superannuation balance of $2 million is possible for many of us. Here’s how I would plan it.

    How to hit $2 million in your superannuation fund

    I would start by making sure your superannuation contributions are being invested in the most efficient manner possible. Most super funds put your cash into what’s known as a ‘balanced’ fund. It is called that because it balances the aim for maximising returns with the desire of many Australians to minimise volatility in their super funds.

    Your fund walks this tightrope by investing your money into a range of different asset classes, all with different historical rates of return and levels of volatility. There are ASX and international shares to maximise portfolio growth. But there are also bonds and cash investments that trade lower long-term returns for volatility protection.

    Not all things should be balanced

    This might be good for your peace of mind, but it can be deleterious to your retirement.

    We don’t need to access our super until we’ve reached retirement age. So if you’re in your 20s, 30s, or 40s, you should arguably be prioritising portfolio returns over reducing volatility. Opting for a shares-only ‘growth’ option in your super fund can, therefore, make a big difference to one’s final superannuation balance.

    AustralianSuper tells us that their ‘Balanced’ option has returned an average of 8.16% per annum over the ten years to 30 June 2023. But their share-based ‘High Growth’ portfolio has achieved a 9.62% return.

    That might not seem like much, but it would make a huge difference over decades. Let’s say someone started off investing $400 into a super fund every month (for argument’s sake, we’ll disregard the superannuation guarantee) and got a return of 8.16%. After 40 years, they would have a balance of approximately $1.31 million (not taking into account fees and taxes).

    But if they instead achieved that higher return of 9.62% per annum, they would instead have $1.93 million to their name.

    There’s no guarantee that those rates of return will be consistent going forward. However, I think most Australians under 50 should opt for a higher-growth option for their super. It is arguably an essential step if you ever wish to get to a $2 million retirement fund over your career.

    A little extra superannuation goes a long way

    Another way you can potentially boost your super fund to hit $2 million is by making extra superannuation contributions. The Australian Taxation Office (ATO) allows most Australians to make both before- and after-tax super top-ups, which can be a very tax-efficient way to build wealth.

    So, let’s say our investor from earlier increases their super contributions from $400 a month to $500. Instead of ending up with $1.93 million after 40 years, they would have a nest egg worth $2.31 million.

    Of course, finding extra cash to put into super is a tough ask for many, given the current cost-of-living crisis. But we can’t ignore the fact that this is probably going to be essential if you want to boost your super fund to $2 million.

    Foolish takeaway

    Everyone’s financial circumstances are different. As such, it is essential you speak to a financial adviser or tax expert before you start fiddling with your superannuation or making extra contributions. You don’t want to end up paying extra taxes in the pursuit of a $2 million super fund.

    However, I think most people have a shot at this pot of gold if they prioritise building up their super funds and ensuring they are getting the best return for their buck.

    The post Want a $2 million superannuation fund? Here’s how I’d aim to build one with exactly $400 per month appeared first on The Motley Fool Australia.

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    Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has 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.