When it comes to investing in the mining sector, three of the most popular options for investors are BHP Group Ltd (ASX: BHP), Rio Tinto Ltd (ASX: RIO), and Fortescue Ltd (ASX: FMG) shares.

These miners are popular because they have high quality operations and generate significant amounts of free cash flow when times are good. This free cash flow then allows them to reward their shareholders with big dividends.

However, all three mining giants are at the mercy of commodity prices. And one particular commodity has a major influence on their profitability and ultimately their dividends – iron ore.

And while BHP and Rio Tinto are diversifying their operations, the iron ore price still has a significant impact on their performances. For example, US$9.7 billion of BHP’s first half underlying EBITDA of US$13.9 billion was generated from its iron ore operations.

Whereas for Rio Tinto, iron ore contributed US$20 billion of its US$23.9 billion underlying EBITDA in FY 2023. And of course Fortescue only generates revenue from iron ore at present.

Clearly, the future direction of the iron ore price will have a major impact on how these miners perform.

But where is the steel making ingredient heading in the coming years? Let’s take a look at what analysts at Goldman Sachs are forecasting for the base metal.

Iron ore price forecast through to 2027

According to a note out of the investment bank this week, its analysts expect the benchmark 62% fines iron ore price to average US$111 a tonne in 2024. This is broadly in line with the current spot price of US$109 a tonne, but down from an average of $120 a tonne in 2023.

Further weakness is expected in 2025, with Goldman forecasting an average price of US$95 a tonne for the year. This reflects the broker’s belief that global seaborne iron ore demand will increase slightly to 1,573 million tonnes (MT), but for supply to lift 2% to 1,573 MT, leaving supply and demand balanced.

A smaller decline in the iron ore price is expected in 2026, with Goldman forecasting an average price of US$93 a tonne. This is based on the broker’s forecast for a small reduction in global demand to 1,560 MT, largely due to weaker demand in China. At the same time, Goldman expects global supply to lift 1% to 1,594 MT. This creates a 34 MT surplus.

Finally, in 2027, the broker is forecasting a further small decline to an average of US$92 a tonne for the iron ore price. This reflects a 2% lift in global seaborne supply to 1,629 MT and smaller 1% lift in demand to 1,580 MT, creating a 49 MT surplus.

In summary, that is:

• 2024: US$111 a tonne
• 2025: US$95 a tonne
• 2026: US$93 a tonne
• 2027: US$92 a tonne

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

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• 3 ASX stocks Warren Buffett could buy 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.

I love looking at opportunities that have been sold off because they offer the potential to buy the dip. Some S&P/ASX 200 Index (ASX: XJO) shares could be a bargain amid recent volatility.

When businesses have long-term potential but suffer a short-term valuation decline, it could suggest it’s an opportunistic time to buy.

Some industries, such as ASX retail shares and ASX mining shares, can behave quite cyclically, giving us a chance to buy at a temporarily lower price.

With that in mind, I think the two ASX shares below are worth scrutinising.

Super Retail Group Ltd (ASX: SUL)

Super Retail is one of the largest retailers in Australia with four key brands – Supercheap Auto, Rebel, BCF and Macpac.

The chart below shows that the Super Retail share price has fallen more than 20% since 20 February 2024.

Why the negativity? The company said in an update that sales have slowed, with total sales in the second half of FY24 showing a negative year-over-year change. According to Super Retail, in the second half of FY24, total like-for-like sales were down 1%, with Rebel sales down 2% and BCF sales down 5%.

However, the company revealed some positives – group sales across March and April were up approximately 1% year over year. Supercheap Auto benefited from “strong demand in auto maintenance categories”, Rebel footwear sales improved after introducing new and expanded brand ranges, and Macpac sales growth was “driven by a strong performance in New Zealand.”

The increase in wages and other costs is a headwind for the business’ profitability, but I don’t believe it will last forever. The company said in its May trading update that store foot traffic and transaction volumes “continue to grow”, which is a positive.

It has opened 16 net new stores during FY24 to date, with expectations of opening another seven before the end of FY24. I think this bodes well for future revenue growth, once trading conditions improve on a per-store basis.

According to Commsec, the Super Retail share price is valued at just 12x FY24’s estimated earnings.

Sandfire Resources Ltd (ASX: SFR)

Sandfire is one of the larger ASX copper shares, with a market capitalisation of approximately $4 billion. It’s a global miner, with projects in Western Australia, Spain and Botswana.

Copper is an important decarbonisation resource that’s useful because it conducts electricity well. For example, electric vehicles need more copper than traditional vehicles. Copper is also needed for the expansion of the electrical grid and the manufacture of renewable energy generation like wind.

McKinsey research suggests there could be a 6.5 million metric ton deficit between supply and demand by 2031, which translates into a 20% deficit in percentage terms. I think this could provide strong support for the copper price and Sandfire’s earnings over the next decade.

As shown on the chart below, the Sandfire share price is down around 10% since 20 May 2024, following a decline in the copper price over the same time period.

I think this could be an opportunity to invest in the ASX 200 share at a lower price.  

The post Are these beaten-up ASX shares too cheap to ignore? appeared first on The Motley Fool Australia.

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• 4 top ASX dividend shares to buy next week
• Here are the top 10 ASX 200 shares today

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

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

Nvidia (NASDAQ: NVDA) stock has been a superb performer over the short and long terms. The artificial intelligence (AI) chip leader held its initial public offering (IPO) in January 1999, six years after the company was founded. In honor of Nvidia stock turning 25 years old earlier this year, below are 25 reasons — in no particular order — to buy it.

As background, Nvidia has four market platforms: data center, gaming, professional visualization, and auto & robotics. Data center is its largest (accounting for 87% of revenue in its most recent quarter) and fastest growing due to surging adoption of AI, particularly generative AI. Generative AI exploded onto the scene in late 2022 with the release of the ChatGPT chatbot.

1. Company is run by a founder

Nvidia CEO Jensen Huang was one of the company’s three co-founders. Studies show that stocks of founder-led companies tend to outperform others over the long term.

2. Founder-CEO has much skin in the game

Huang owns about 868 million shares of Nvidia stock following Friday’s 10-for-1 stock split (discussed in No. 6), as of the most recent available data. This stake is worth about $105 billion, as of the stock’s closing price on June 7. Given this massive stake, investors can be sure Huang’s interest is aligned with their interests.

3. CFO’s huge stock holdings suggest much confidence in Nvidia’s future

CFO Colette Kress owns 6.43 million shares of Nvidia stock following Friday’s 10-for-1 stock split (discussed in No. 6). These shares were worth about $777 million, as of June 7. A CFO probably has the best handle of everyone in a company — including its CEO — on its financial performance at any given time. So, it seems safe to say that Kress is very optimistic about Nvidia’s growth prospects.

4. Nvidia stock’s longer-term performance is phenomenal

Over the last 10 years, Nvidia stock has returned 25,431% through June 7. That’s more than 100 times the S&P 500 index’s return of 230%. Put another way, a $1,000 investment in Nvidia stock a decade ago would now be worth more than $250,000.

A stock’s past performance is no guarantee of its future performance. However, a stock’s long-term performance often reflects the ability of a company’s top management to establish and implement successful strategies.

5. AI market is projected to continue to grow briskly

In 2024, the global AI market is projected to reach revenue of $184 billion, and have a compound annual growth rate (CAGR) of 28.5% through 2030, when it will be worth an estimated $826.7 billion, according to Statista.

This is a huge positive for Nvidia, whose graphics processing unit (GPU) chips and related products and services are used for training and deploying AI applications.

6. Nvidia’s 10-for-1 stock split just occured on June 7

On Friday, June 7, Nvidia stock split 10-for-1. Investors who owned the stock as of the day before received nine additional shares for each share they owned. The stock is scheduled to begin trading on a split-adjusted basis on Monday, June 10.

On Friday, Nvidia stock’s closing price was $1,208.88, which means that its split-adjusted price was $120.89.

Potential benefits for investors of Nvidia’s stock split include a boost in price from greater demand for shares, and a higher chance at being included on the Dow Jones Industrial Average index.

7. The company dominates the data center AI chip market

It’s widely estimated that Nvidia has more than a 90% share of the market for AI GPU chips for data centers, and more than an 80% share of the overall data center AI chip market.

8. Data center AI chip market is projected to continue to grow like gangbusters

In 2023, the global market for chips to accelerate AI processing in data centers was worth about $45 billion, according to an estimate by Advanced Micro Devices (NASDAQ: AMD) CEO Lisa Su. She projects this market will reach $400 billion in revenue by 2027, which equates to a blistering CAGR of 72.7%.

9. Nvidia’s data center business has strong competitive advantages

Advanced Micro Devices (AMD) and Intel have recently entered Nvidia’s turf — AI-enabling GPUs for data centers. Investors shouldn’t be overly concerned. Nvidia’s competitive advantages don’t only stem from its GPUs, but also its software, particularly CUDA, which has been used by millions of developers for many years. CUDA enables its GPUs to possess the parallel processing capabilities needed for accelerating general and AI computing.

10. Its revenue is growing rapidly

Nvidia’s year-over-year revenue growth over the last four quarters starting with the most recent quarter: 262%, 265%, 206%, and 101%.

11. Its profits are increasing even faster than revenue

Nvidia’s adjusted earnings per share (EPS) are growing faster than its revenue, which reflects its expanding profit margins. This dynamic is being driven by its highly profitable data center business growing faster than its other businesses. Here’s the company’s year-over-year adjusted EPS growth over the last four quarters starting with the most recent quarter: 461%, 486%, 593%, and 429%.

12. Its free cash flow is also growing rapidly

Nvidia’s year-over-year free cash flow (FCF) growth over the last four quarters starting with the most recent quarter: 465%, 546%, N/A (FCF was negative in year-ago period), and 634%.

13. Wall Street expects strong profit growth over the next 5 years

As of June 7, Wall Street projects that Nvidia will grow adjusted EPS at an average annual rate of 46.5% over the next five years.

14. Nvidia nearly always beats Wall Street’s expectations

Nvidia nearly always beats Wall Street’s quarterly earnings estimates — and oftentimes, by a lot. In the prior four quarters, the company’s adjusted EPS has exceeded the analyst consensus estimate by percentages ranging from 10% to 29%.

If this dynamic continues, Nvidia’s CAGR over the next five years will be higher than the 46.5% that analysts now expect.

15. The stock’s valuation is reasonable

At Friday’s closing price, Nvidia stock is priced at 44.6 times forward estimated earnings. In a vacuum, this is a high valuation. But it’s reasonable for a company that Wall Street expects to grow adjusted EPS 109% this fiscal year and at an average annual rate of 46.5% over the next five years. Moreover, analysts are likely underestimating its growth potential, as covered above.

16. It’s much more profitable than its main competitors and peers

Company	GAAP Profit Margin (TTM)
Nvidia	53.4%
Advanced Micro Devices	4.9%
Intel	7.4%
Qualcomm	23%
Broadcom	29.9%

List is not all-inclusive. Data sources: YCharts and finviz.com. GAAP = generally accepted accounting principles. TTM= trailing 12 months.

17. It’s reportedly forming a custom chip business unit

Sources have reported and signs suggest that Nvidia is forming a custom chip business unit so that it can capture some of the custom chip development work for big tech companies that currently goes to chipmakers such as Broadcom. The new unit will reportedly help companies design custom chips for AI and other applications.

18. It’s the largest supplier of graphics cards for gaming

Gaming is Nvidia’s second largest market platform, accounting for 10% of its revenue in its most recent quarter. The company is the world’s largest supplier of graphics cards for computer gaming. In the first quarter of 2024, it had an 88% share of the desktop discrete GPU market, according to Jon Peddie Research. AMD and Intel had a 12% and less than 1% share, respectively.

19. PC gaming market is projected to continue its solid growth

In 2023, the global personal computer (PC) gaming market generated about $80.3 billion in revenue, according to Statista, which projects this market will be worth $141.9 billion in 2028. That equates to a CAGR of about 12.1%.

20. Nvidia generates some recurring revenue

Nvidia has relatively recently begun launching software and service offerings that generate recurring revenue. In February, CFO Kress said that in fiscal Q4 the company’s software and services offerings reached an annualized revenue run rate of $1 billion.

21. Its revenue should get a big boost when driverless vehicles become legal

Nvidia’s revenue should get a big boost when driverless vehicles become legal across the U.S. and world. Hundreds of vehicle manufacturers, tier 1 suppliers, and others are developing on the company’s autonomous vehicle AI computing platform, DRIVE.

When Nvidia’s partners use its DRIVE platform in production vehicles, they need to buy a DRIVE AI computer for each vehicle. Its big-name partners include luxury vehicle maker Mercedes-Benz and electric vehicle (EV) giant BYD.

22. Its sovereign AI business has multibillion-dollar potential

Nations and other sovereign entities have relatively recently begun using Nvidia’s technology to build their own sovereign AI cloud services. The “sovereign AI infrastructure market represents a multibillion-dollar opportunity over the next few years,” CFO Kress said last November on the company’s fiscal Q3 2024 earnings call.

23. It just ramped up its robotics initiatives

In March, Nvidia introduced it Project GR00T (Generalist Robot 00 Technology) AI foundation model for humanoid robots and major updates to its Isaac robotics platform.

24. Its balance sheet is in solid shape

At the end of the last quarter, Nvidia had cash and cash equivalents of $7.6 billion and long-term debt of $8.5 billion.

25. Employes really like working for Nvidia

On Glassdoor.com, Nvidia employees and former employees give the company an overall rating of 4.6 stars (on a scale of 1 to 5), as of June 7. Employee satisfaction is particularly important for companies in the technology realm, as there is a limited amount of top tech talent. Nvidia’s rating is the highest of all the so-called Big Tech companies.

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

The post 25 reasons to buy Nvidia stock now appeared first on The Motley Fool Australia.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Advanced Micro Devices, BYD Company, Nvidia, and Qualcomm. Beth McKenna has positions in Nvidia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Broadcom and Intel and has recommended the following options: long January 2025 $45 calls on Intel and short August 2024 $35 calls on Intel. The Motley Fool Australia has recommended Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Multi-billion-dollar fund manager Ellerston Capital is the latest fundie to undertake a buy-up of ASX education stock IDP Education Ltd (ASX: IEL).

IDP Education is a global education company that offers English language tests and helps overseas students get into university courses in Australia, New Zealand, the United States, and the United Kingdom.

IDP Education shares are trading at $15.04 on Tuesday, down 1.89% for the day.

Let’s investigate.

What’s happening with this ASX 200 stock?

This ASX 200 stock has taken a beating over the past 12 months, falling 37.3% while the S&P/ASX 200 Index (ASX: XJO) has risen 8.4%.

Key challenges for the company include cuts to migration in several countries, thereby stemming the flow of international students seeking a world-class education via its placement services and language tests.

Some traders expect IDP shares to weaken further, thereby providing an opportunity for short-term profit via short bets. This is why the ASX 200 stock is one of the most shorted equities on the market right now.

However, other experts see an opportunity to buy the dip and capitalise on an anticipated rebound over the medium to long term.

As reported in the Australian Financial Review (AFR), Ellerston portfolio manager and director Chris Kourtis told clients in a note that IDP Education shares were trading at an “attractive entry point”.

Kourtis said:

[IDP Education] is a name we have patiently been monitoring for some time.

The uncertainty associated with the near-term earnings risk in major markets like Canada and the UK have clearly weighted heavily on the stock and analysts have rebased their earnings lower.

But Kourtis thinks they’ve overdone it, adding: “[IDP] should emerge stronger when global migration and education reverts in the medium term.”

What’s the latest news from IDP Education?

Last week, the company told the market that student visa changes in several countries had led to lower volumes of language testing and university placements in 2H FY24.

As a result, management is expecting flat earnings in FY24, with “challenging” market conditions ahead.

The company expects the size of the international education market to decline by 20% to 25% over the next 12 months.

As a result, IDP will cut costs to offset the impact of fewer students on revenue while aiming to grow its market share.

The company said:

As the leading quality player in the sector, IDP remains very well placed to help students and institutions navigate these challenging market conditions and expects to grow its market share in student placement.

Despite the shorter dated cyclical dynamics, IDP remains confident in the long-term growth drivers for the industry.

Experts explain why this ASX 200 stock is a buy

The AFR reports that Airlie Funds Management and DNR Capital have also bought this ASX 200 stock this year.

Magellan Financial Group Ltd (ASX: MFG) has also just become a major shareholder with an initial 5% stake purchased on 31 May.

Airlie’s Emma Fisher told the AFR last month that her fund deemed IDP a good business that was “cheaper than its worth”.

Jamie Nicols from DNR Capital told clients in a note that their purchase was opportunistic and part of a broader strategy to buy high-quality ASX businesses that were on the nose with investors.

Prasad Patkar, the head of investments at Platypus Asset Management, recently described the ASX 200 stock as offering “stand-out value”.

Goldman Sachs recently reiterated its buy rating on IDP Education. However, it reduced its 12-month share price target from $25.30 to $21.75 following the company’s update last week.

The broker commented:

IEL remains well placed to capitalise as conditions normalise into FY26E, with IEL selectively investing for growth while SP competitors come under significant pressure. In our view the regulatory headwinds are cyclical, while structural SP growth can resume off the FY25E baseline.

But not everyone is on board…

John Athanasiou of Red Leaf Securities reckons the ASX 200 stock is a hold for now.

Commenting on The Bull, he said:

IDP Education remains a quality business, but we have regulatory concerns about possible cuts to net migration in Australia.

Also, the company expects the international education market to decline between 20 per cent and 25 per cent in the next 12 months. It remains confident about the longer term.

While IDP’s fundamentals are robust, the company recently announced that adjusted earnings before interest and tax in fiscal year 2024 are expected to be broadly in line with the prior year. The company is implementing a cost cutting program. We suggest monitoring developments closely.

The post Guess which beaten-up ASX 200 stock is being bought up by this multi-billion-dollar fundie appeared first on The Motley Fool Australia.

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Motley Fool contributor Bronwyn Allen has positions in Magellan Financial Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group and Idp Education. 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.

It’s been an absolutely dire start to the trading week for the S&P/ASX 200 Index (ASX: XJO) and most ASX 200 shares this Monday. At the time of writing, the ASX 200 has tanked by a horrid 1.3%, pulling the index down to under 7,760 points. But strangely, that hasn’t stopped no less than three ASX exchange-traded funds (ETFs) smashing out new record highs today.

Yep, we’ve seen three popular ASX ETFs spring to new records this Monday.

First up is the BetaShares Nasdaq 100 ETF (ASX: NDQ). NDQ units are currently up a robust 1.11% at $43.80 each but climbed as high as $43.81 earlier this morning – a new record high.

Then we have the iShares S&P 500 ETF (ASX: IVV). This index fund is presently enjoying a lift of 1.01% up to $54.16 a unit. That’s right on this ETF’s new record high.

Finally, let’s talk about the VanEck MSCI International Quality ETF (ASX: QUAL). QUAL units are trading at $56.61 at the time of writing, up a compelling 0.95% for the day thus far. But those units climbed as high as $57 each earlier this morning, which, you guessed it, is a new record high for QUAL.

So how on earth are these three ASX ETFs hitting new record highs today while the ASX 200 is having such a horror show of a Monday?

How are these three ASX ETFs hitting new record highs today?

This might seem like a very strange occurrence. But there is a simple explanation for these three ETFs’ new highs today. All three are largely uncorrelated to the ASX 200 Index and the performance of ASX shares.

The BetaShares Nasdaq 100 ETF is an index fund that tracks the largest 100 non-financial US shares that are listed on the NASDAQ stock exchange. The NASDAQ is one of the two major stock exchanges over in the United States. This exchange is famous for housing the vast majority of America’s tech giants. That’s everything from Apple, Amazon and Microsoft to PayPal, Netflix and NVIDIA.

Last Friday night (our time), the US markets exploded higher, in stark contrast to what we’re seeing on the ASX today. The NASDAQ-100 Index (NASDAQ: NDX), which the NDQ ETF tracks, rose 0.39% to 19,074.67 points, just a whisker off its all-time high of 19,113.88 points.

As such, it’s not too shocking to see an ASX-listed index fund that tracks the NASDAQ respond so enthusiastically to this Friday night move higher on the ASX today.

Different ASX ETF, same holdings

It’s a similar story with the iShares S&P 500 ETF. This index fund tracks the S&P 500 Index (SP: .INX). This index is composed of the largest 500 companies on the US markets, drawn from both the NASDAQ and the New York Stock Exchange.

Last Friday night saw the S&P 500 rise 0.26% up to 5,360.79 points. Again, that’s only a hair’s breadth away from the S&P 500’s all-time record of 5,375.08 points.

So again, there’s no shock to see an ASX-listed, S&P 500-tracking index fund leap higher today.

The VanEck International Quality ETF is a bit of a different case though. This ETF isn’t really an index fund; rather, it is an actively managed ETF that gives investors access to a portfolio of stocks chosen for their fundamental characteristics.

However, this ETF is still very much an international investment. More than 75% of its holdings are currently US shares. Further, its top holdings are the same names that you’ll find at the top of both NDQ and IVV’s portfolios: Nvidia, Apple, Microsoft and Meta Platforms.

Foolish takeaway

So once more, given the performance of the US markets last Friday night, there’s not much mystery as to why this ETF is performing so well today.

The experience of these three ASX ETFs this Monday just goes to show how having a diversified portfolio of shares that includes holdings from outside the ASX can help investors insulate their investments from the woes of a single stock market.

The post 3 popular ASX ETFs smashing record highs today appeared first on The Motley Fool Australia.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, 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 Sebastian Bowen has positions in Amazon, Apple, Meta Platforms, and Microsoft. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon, Apple, BetaShares Nasdaq 100 ETF, Meta Platforms, Microsoft, Netflix, Nvidia, PayPal, and iShares S&P 500 ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2026 $395 calls on Microsoft, short January 2026 $405 calls on Microsoft, and short June 2024 $67.50 calls on PayPal. The Motley Fool Australia has positions in and has recommended BetaShares Nasdaq 100 ETF. The Motley Fool Australia has recommended Amazon, Apple, Meta Platforms, Microsoft, Netflix, Nvidia, PayPal, and iShares S&P 500 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

With so many shares to choose from on the Australian share market, it can be difficult to decide which ones to buy. The good news is that brokers across the country are doing a lot of the hard work for you.

Three top ASX shares that leading brokers have named as buys this week are listed below. Here’s why they are bullish on them:

Brambles Ltd (ASX: BXB)

Analysts at Morgan Stanley have upgraded this logistics solutions company’s shares to an overweight rating with an improved price target of $16.60. The broker made the move on valuation grounds. It highlights that the company’s shares are trading at a huge discount to their five-year average multiples. This is despite Brambles having a positive earnings growth outlook and being positioned to announce material share buybacks in both FY 2025 and FY 2026. In light of this, its analysts believe that a compelling entry point has been created for investors and has upgraded its shares accordingly this morning. The Brambles share price is currently changing hands for $14.70.

Capricorn Metals Ltd (ASX: CMM)

According to a note out of Bell Potter, its analysts have retained their buy rating and $6.50 price target on this gold miner’s shares. The broker believes that recent share price weakness has created a very attractive opportunity for investors to buy Capricorn Metals’ shares at a cheap price. Particularly given a recent 26% increase in ore reserves at the 100%-owned Mt Gibson Gold Project in Western Australia. In addition, the broker highlights that the company has sector leading cash generation. Combined with its strong production record, it believes this means that its shares deserve to trade at a premium to sector average valuation metrics. The Capricorn Metals share price is fetching $4.48 on Tuesday.

Life360 Inc (ASX: 360)

Another note out of Bell Potter reveals that its analysts have retained their buy rating on this location technology company’s shares with a trimmed price target of $17.00. This follows the completion of the company’s highly anticipated Nasdaq IPO. Bell Potter was pleased with the listing, remains very positive on its outlook, and is forecasting strong earnings and revenue growth through to at least 2026. It also highlights that the next potential catalyst it sees for the stock is its half year result in August. The broker notes that it is expecting another solid result from the market darling. The Life360 share price is trading at $13.70 this afternoon.

The post Leading brokers name 3 ASX shares to buy today appeared first on The Motley Fool Australia.

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• Why Life360 shares can rocket almost 25%
• 5 things to watch on the ASX 200 on Tuesday
• Is this the very best ASX 200 gold stock to buy now?
• Here are the top 10 ASX 200 shares today
• Why Beach Energy, Life360, Viva Leisure, and Wildcat shares are dropping today

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 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.

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

Some might think Apple Inc‘s (NASDAQ: AAPL) best days are behind it. Revenue growth has ground to a halt. The company’s biggest new product in years, its Vision Pro mixed reality headset, might be a commercial flop. Apple’s reign as the largest company in the world based on market cap has ended. It’s now in third place behind Microsoft and Nvidia.

Don’t give up on Apple just yet, though. Anytime people have done so in the past, the company has reinvented itself and gone on to achieve tremendous success. Apple just might do it again. And the company could have a clear path to making it happen. Meet Apple’s new $186 billion market opportunity.

Living on the edge

Artificial intelligence (AI) could be bigger than the internet. That’s not just my opinion. Alphabet CEO Sundar Pichai and Altimeter Capital CEO Brad Gerstner think so. Nvidia CEO Jensen Huang believes that one specific type of AI — generative AI — will be bigger than the internet all by itself.

So far, AI development has been primarily done in the cloud. That’s why Nvidia’s data center revenue soared 427% year over year in the first quarter of 2024 and now makes up nearly 87% of the company’s total revenue.

But this story could soon change as edge AI gains momentum. Edge AI is the deployment of AI on devices near where data is created (on the “edge”). There are several advantages of edge AI compared to AI on the cloud, including lower latency (delays in data transfer) and bandwidth requirements along with increased privacy.

How big could the edge AI market be? Estimates vary, but there’s a consensus that the market will grow rapidly. Market researcher Market.us predicts the edge AI market will expand by a compound annual growth rate (CAGR) of 25.9% to $143.6 billion by 2032. Fortune Business Insights projects a CAGR of 27.5% with the edge AI market topping $186 billion by 2032.

Why Apple could be the leader in edge AI

Morgan Stanley wrote in a 2023 report that it believes “Apple will emerge as one of the key winners” in the edge AI market. I wholeheartedly agree with that assessment.

Edge AI must run on devices. Apple has over 2.2 billion devices in active use throughout the world. This number largely consists of iPhones, but the company also has other devices, including computers and wearables.

Importantly, Apple already has chips powerful enough to run AI apps on its devices. The company’s next-generation iPhone chip on the way will almost certainly provide even better AI performance.

Apple has the ecosystem to foster edge AI software development by other companies. It also has deep pockets to fund internal R&D and acquisitions to advance edge AI technology going forward.

Some might be excited by Apple’s AI announcements at its Worldwide Developers Conference (WWDC) this week. Others could be disappointed. Either way, any WWDC revelations are only the beginning. Look for Apple to continue to launch edge AI functionality over the coming years.

Does this opportunity make Apple stock a no-brainer buy?

Even for a company that generates as much revenue as Apple does, the edge AI market opportunity is big enough to move the needle significantly. But does this opportunity make Apple stock a no-brainer buy? Not necessarily.

Apple could squander its opportunity. It’s possible that edge AI won’t be as impactful as many expect. I don’t expect either to happen, though. However, Apple won’t be a no-brainer buy until there’s sufficient reason to believe the company will return to strong growth. We’re not at that point yet, but we could be relatively soon.

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

The post Meet Apple’s new $186 billion market opportunity 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. Keith Speights has positions in Alphabet, Apple, and Microsoft. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Apple, Microsoft, and Nvidia. 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 recommended Alphabet, Apple, Microsoft, and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record a disappointing decline. At the time of writing, the benchmark index is down 1.5% to 7,741.3 points.

Four ASX shares that are falling more than most today are listed below. Here’s why they are dropping:

Chalice Mining Ltd (ASX: CHN)

The Chalice Mining share price is down 8% to $1.51. This morning, this mineral exploration company released a metallurgical testwork and pre-feasibility study (PFS) update. Management advised that results indicate potential upside for overall metal recoveries. However, cleaner stage tests under locked-cycle conditions are required to quantify the impact. Chalice continues to target a final investment decision in late 2026 and is then aiming to commence production all the way out in 2029. It is also worth noting that most miners are sinking on Tuesday and dragging on the performance of the ASX.

Northern Star Resources Ltd (ASX: NST)

The Northern Star share price is down 6% to $13.70. This appears to have been driven by a bleak session for gold on Friday. The precious metal had its worst session in several years at the end of last week. And while it rebounded on Monday, that wasn’t enough for investors to stop hitting the sell button today. The S&P/ASX All Ordinaries Gold index is down 5.7% in afternoon trade.

Peninsula Energy Ltd (ASX: PEN)

The Peninsula Energy share price is down 9% to 10 cents. This has been driven by the completion of the retail component of the uranium developer’s entitlement offer. It has raised a total of $39.8 million at an offer price of 10 cents per share. This follows the successful completion of a placement which raised approximately $52.9 million and the institutional entitlement offer which raised approximately $13.3 million. In total, the company has now raised A$105.9 million before costs. The proceeds place Peninsula Energy in a strong financial position and is expected to fully fund operations at the Lance Projects through to sustainable free cash flow.

Service Stream Ltd (ASX: SSM)

The Service Stream share price is down 4% to $1.18. This is likely to have been driven by a broker note out of Macquarie this morning. According to the note, the broker has downgraded the essential services company’s shares to a neutral rating, but with an improved price target of $1.30. Macquarie made the move largely on valuation grounds following a strong run since the release of its half year results. Outside its valuation, the broker is positive on the company’s outlook.

The post Why Chalice Mining, Northern Star, Peninsula Energy, and Service Stream shares are sinking 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 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.

Finding undervalued stocks can be a great way to score big in the share market. One way to spot these opportunities is by looking for stocks trading below their book value. 

Book value represents a company’s worth based on its assets minus its liabilities. Think about your house, for example. If your house is valued at $1 million and you have a mortgage of $300,000, the net asset value (NAV) of your house is $700,000.

When a stock’s market price is below its NAV or book value, it might mean the market is undervaluing the company. 

While book value and NAV are similar in their meaning, book value refers to the value as reported in the balance sheet, whereas NAV could be based on what a company believes is the fair value based on the market value of the assets.

Before we dive in, please note this information is for idea-generation purposes only. Always do your own research or talk to a financial advisor before making an investment decision. 

The price-to-book value (P/B) ratio-based approach is easy to understand and valuable for industries like real estate, where physical assets are essential.

On the other hand, let’s remember some stocks are cheap for a reason, such as poor business prospects. Also, different accounting methods can affect the calculation of book value, potentially misleading investors. 

With that caveat out, here’s my list of three ASX shares trading under their book values today.  

HomeCo Daily Needs REIT (ASX: HDN)

HomeCo Daily Needs is a property trust that owns and manages high-quality, convenience-based retail assets across Australia. The company focuses on neighbourhood retail and large-format retail centres. The REIT boasts over 1,200 tenants spread across 51 properties. 

The company reported a book value of approximately $3 billion in December 2023, or a book value per unit of $1.44, representing a P/BV ratio of 0.9x using today’s share price.

It is a consistent dividend payer, offering a dividend yield of 6.7% using its distributions over the last twelve months. 

Morgans recently recommended HomeCo Daily Needs REIT to buy due to the resilience of its cash flows and its exposure to accelerating click and collect trends. 

Rural Funds Group (ASX: RFF)

Rural Funds Group owns and leases a diversified portfolio of high-quality farming assets. The REIT’s investments span various sectors, including cattle, vineyards, cotton, and almonds, providing stable returns for its investors. 

Rural Funds is trading at approximately 0.7x P/BV ratio using its reported book value of $1.8 billion as of December 2023. Its book value represents $2.74 on a per-unit basis, having grown from $1.55 in FY19.

The P/BV ratio becomes even more attractive using what Rural Funds itself believes is the true value of its assets. The business discloses its adjusted net asset value (NAV) which includes the market value of its water entitlements. Its adjusted NAV on 31 December 2023 was $3.07 per unit, indicating an adjusted P/BV ratio of 0.66x.  

As my colleague Tristan highlighted, Rural Funds is an ASX dividend stock worth considering. The business pays an annual distribution of 11.73 cents per unit, offering a distribution yield of 5.8% at the current share price. 

Australian Agricultural Company (ASX: AAC)

As one of Australia’s largest integrated cattle and beef producers, Australian Agricultural Company manages a diverse portfolio of properties across approximately 6.4 million hectares across Queensland and the Northern Territory. 

The company produces high-quality beef, catering to the domestic and international markets. 

The global cattle market has had a rocky ride over the past few years, pushing pressure on Australian Agricultural Company’s valuation.

The company is valued at a P/BV ratio of 0.6x, compared to its historical range of 0.5x to 1.4x. 

This is one of the reasons why Bell Potter maintained its positive view on the company. The broker said: 

RFF trades at a historical high discount to its market NAV per unit ($2.78 pu) at ~28%. While we are in general seeing large discounts to NAV in ASX listed farming and water assets to market NAV, the discount that RFF is trading appears excessive and we are seeing a valuable opportunity in RFF.

The Australian Agricultural Company share price is trading at $1.47 at the time of writing.

The post 3 ASX shares trading below their book values appeared first on The Motley Fool Australia.

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Motley Fool contributor Kate Lee 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 Rural Funds Group. The Motley Fool Australia has recommended HomeCo Daily Needs REIT. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The S&P/ASX 200 Index (ASX: XJO) is having a very tough start to the week. In afternoon trade, the benchmark index is down 1.45% to 7,745.6 points.

Four ASX shares that are not letting that hold them back today are listed below. Here’s why they are rising:

Arizona Lithium Ltd (ASX: AZL)

The Arizona Lithium share price is up 9% to 2.4 cents. This morning, this lithium explorer announced that it has received approval from the US Bureau of Land Management for the Permit of Exploration (POE) at the Big Sandy Lithium Project in Arizona, USA. This POE includes 131 exploration holes and a bulk sample. Arizona Lithium’s managing director, Paul Lloyd, commented: “This represents a substantial development opportunity for a deposit that presently contains a JORC resource of 320,800 tonnes LCE. With only 4% of the project drilled to date, we are looking to expand the existing Resource and validate the exploration target.”

Bapcor Ltd (ASX: BAP)

The Bapcor share price is up 13% to $4.93. This follows confirmation that the auto parts retailer has received an unsolicited, indicative, conditional and non-binding takeover proposal from Bain Capital. Under the terms of the indicative proposal, Bapcor shareholders would receive $5.40 cash per share from the private equity giant. The Bapcor board is currently considering the offer and has warned that “there is no guarantee that the Indicative Proposal put forward by Bain Capital will result in a binding offer or that any transaction will eventuate.”

Race Oncology Ltd (ASX: RAC)

The Race Oncology share price is up 3% to $1.84. This morning, this oncology company announced that the United States Food and Drug Administration (FDA) has extended Orphan Drug Designation (ODD) to its proprietary formulation of bisantrene, RC220. The ODD provides a wide range of benefits to sponsors of new treatments for orphan diseases. This includes seven-year US marketing exclusivity for approved orphan products. The company’s chief medical officer, Dr Michelle Rashford, said: “Orphan Drug Designation is a major asset beyond AML as it enables Race to work closely and constructively with the FDA on all of our RC220 bisantrene clinical programs as we progress towards opening an FDA IND in 2025.”

Tower Ltd (ASX: TWR)

The Tower share price is up 4% to 80 cents. This follows a guidance upgrade from the New Zealand based insurer. It now expects its underlying net profit after tax for the 12 months ending 30 September to be greater than NZ$40 million. This is up from its previous guidance for greater than $35 million. This increase is due to a continuation of positive trading conditions including unseasonably benign weather in the past two months.

The post Why Arizona Lithium, Bapcor, Race Oncology, and Tower shares are pushing higher appeared first on The Motley Fool Australia.

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