Stock Pick

  • I’m a cybersecurity expert who likes using AI. But I’d never share a few things with ChatGPT or its competitors.

    A man shushing
    Most companies don't have AI policies, but take care not to upload sensitive data to a bot.

    iStock; BI

    • A cybersecurity expert warns against oversharing with AI chatbots like ChatGPT and Google's Gemini.
    • Chat data can be used to train generative AI and can make personal data searchable.
    • Many companies lack AI policies, leading employees to unknowingly risk confidential information.

    This as-told-to essay is based on a conversation with Sebastian Gierlinger, vice president of engineering at Storyblok, a content management system company of 240 employees based in Austria. It has been edited for length and clarity.

    I'm a security expert and a vice president of engineering at a content management system company, which has Netflix, Tesla, and Adidas among its clients.

    I think that artificial intelligence and its most recent developments are a boon to work processes, but the newer capabilities of these generative AI chatbots also require more care and awareness.

    Here are four things I would keep in mind when interacting with AI chatbots like OpenAI's ChatGPT, Google's Gemini, Anthropic's Claude, or Perplexity AI.

    Liken it to using social media

    An important thing to remember when using these chatbots is that the conversation is not only between you and the AI.

    I use ChatGPT and similar large language models myself for holiday suggestions and type prompts like: "Hey, what are great sunny locations in May with decent beaches and at least 25 degrees."

    But problems can come up if I am too specific. The company can use these details to train the next model and someone could ask the new system details about me, and parts of my life become searchable.

    The same is true for sharing details about your finances or net worth with these LLMs. While we haven't seen a case where this has happened, personal details being fed into the system, and then revealed in searches would be the worst outcome.

    There could already be models where they are able to calculate your net worth based on where you live, what industry you are in, and spare details about your parents and your lifestyle. That's probably enough to calculate your net worth and if you are a viable target or not for scams, for example.

    If you are in doubt about what details to share, ask yourself if you would post it on Facebook. If your answer is no, then don't upload it to the LLM.

    Follow company AI guidelines

    As using AI in the workplace becomes common for tasks like coding or analysis, it is crucial to follow your company's AI policy.

    For example, my company has a list of confidential items that we are not allowed to upload to any chatbot or LLM. This includes information like salaries, information on employees, and financial performance.

    We do this because we don't want somebody to type in prompts like "What is Storyblok's business strategy" and ChatGPT proceeds to spit out "Story Block is currently working on 10 new opportunities, which is company 1, 2, 3, 4, and they are expecting a revenue of X, Y, Z dollars in the next quarter." That would be a huge problem for us.

    For coding, we have a policy that AI like Microsoft's Copilot cannot be held responsible for any code. All code produced by AI must be checked by a human developer before it is stored in our repository.

    Using LLMs with caution at work

    In reality, about 75% of companies don't have an AI policy yet. Many employers have also not subscribed to corporate AI subscriptions and have just told their employees: "Hey, you're not allowed to use AI at work."

    But people resort to using AI with their private accounts because people are people.

    This is when being careful about what you input into an LLM becomes important.

    In the past, there was no real reason to upload company data to a random website. But now, employees in finance or consulting who would like to analyze a budget, for example, could easily upload company or client numbers into ChatGPT or another platform and ask it questions. They would be giving up confidential data without even realizing it.

    Differentiate between chatbots

    It is also important to differentiate between AI chatbots since they are not all built the same.

    When I use ChatGPT, I trust that OpenAI and everyone involved in its supply chain do their best to ensure cybersecurity and that my data won't leak to bad actors. I trust OpenAI at the moment.

    The most dangerous AI chatbots, in my opinion, are the ones that are homegrown. They are found on airline or doctors' websites and they may not be investing in all the security updates.

    For example, a doctor may include a chatbot on his website to do an initial triage, and the user may start inserting very personal health data that could let others know of their illnesses if the data is breached.

    As AI chatbots become more humanlike, we are swayed to share more and open up to topics we would not have before. As a general rule of thumb, I would urge people not to blindly use every chatbot they come across, and stay away from being too specific regardless of which LLM they are talking to.

    Do you work in tech or cybersecurity and have a story to share about your experience using AI? Get in touch with this reporter: shubhangigoel@insider.com.

    Read the original article on Business Insider

  • We sold 8 houses in Michigan to cram our family of 6 into a 2-bedroom apartment in California. We have no regrets.

    Man and woman with a view of Los Angeles in the background
    Evelyn Pech-Vazquez and her husband moved to LA with their four kids to find diversity.

    Evelyn Pech-Vazquez

    • Evelyn Pech-Vazquez became worried about Michigan's lack of diversity and how it would impact her four children.
    • She and her husband decided to sell their Michigan house — along with seven rental homes — for a profit of $177,000.
    • In California, they can only afford a two-bedroom apartment but say the benefits outweigh the higher cost of living. 

    We were on vacation in Florida, having breakfast in the hotel, when my 5-year-old son made an observation that left me speechless: "Mama, no somos los únicos hablando Español."

    It was true. That morning we were surrounded by a lot of other people also speaking Spanish — a mix of Mexican, Cuban, and Puerto Rican accents could be heard in the background. Three other guests had even joined our large table, as no other seats were available. My son was surprised to see them bow their heads when we said grace, as salsa music played in the background.

    My son's reaction reminded me of the importance of diversity and had me questioning the sense of community back home in Lansing, Michigan. After returning home, he continued to ask why no one spoke Spanish in our neighborhood, and I felt sad, explaining that Orlando had more people from different countries.

    The lack of diversity prompted us to leave Michigan

    We never intended to stay in Michigan as long as we did. We also didn't realize that the lack of diversity would have a noticeable impact on our children. It took my son's comment to realize we needed to leave.

    My husband is from Yucatan, Mexico; my father is from Cameroon, and I grew up in Cleveland, where my mother was born.

    I saw that my four children were the only bilingual kids in the neighborhood. As they got older, it got harder for them to appreciate speaking two languages and they constantly fought our efforts.

    In addition to not having other bilingual friends, I began to see something else very disconcerting. My children, who had spent their entire lives in the same town, were becoming close-minded. There was a common belief in our area that one had all they'd need in their own community, and few had any interest in discovering the outside world.

    It was scary to think that all my efforts to diversify them — traveling, living briefly in Mexico, and speaking multiple languages — would be wasted simply because of the surrounding culture. It took five more years for us to leave, but when the pandemic shook the world and presented an unexpected opportunity, my husband and I seized it.

    Mom and four kids
    Seeing her four kids proud to be bilingual makes the author feel proud.

    Evelyn Pech-Vazquez

    After selling our house and rental properties, we made the move

    We sold seven rental homes and our main residence with the goal of buying a house in California and broadening our children's horizons.

    In April 2021, we moved 3,000 miles west to a small town in Southern California. The increase in diversity was apparent from the start. In my daughter's first year of kindergarten, she made several bilingual friends. I was surprised by how many kids spoke Spanish, not to mention the long list of other languages.

    In our new home in Simi Valley, 40 miles from Downtown Los Angeles, the demographic for Hispanic or Latino residents is 26.2%, nearly double that of Michigan's state capital, per the United States Census Bureau.

    I'll never forget the first day my oldest, now 20, came home excitedly from his job at McDonald's and said he was helping train a new employee who only spoke Spanish. This was coming from the boy who had complained about being forced to speak Spanish for years.

    For the first time, he looked proud to be bilingual. All three of the younger kids have had similar experiences, whether it was helping translate for a new immigrant in class or speaking Spanish for fun with bilingual friends.

    Housing prices made it hard, but we have no regrets

    Three years in, we are still paying $2,600 for a two-bedroom, one-bath apartment, evidence of the biggest challenge we've faced: housing. With the profits of eight Midwestern houses, adding up to $177,000, we still don't have enough to buy a home. Zillow listed the average home value in Simi Valley as $846,159. Many of these houses are half the size of our place back in Michigan.

    One pleasant surprise was that our high-school graduates might qualify for two years of free community college through the California Promise Program, which waives first-time students' enrollment fees and, in some cases, tuition, as well. This was great news for our big family.

    Overall, the sacrifices we made to move to Southern California were worth the benefits of living in a melting pot. We would do it all over again.

    Got a personal essay about culture shock or relocating a family that you want to share? Get in touch with the editor: akarplus@businessinsider.com.

    Read the original article on Business Insider

  • 3 things about the Global X FANG+ ETF (FANG) every smart investor knows

    The letters ETF sit in orange on top of a chart with a magnifying glass held over the top of it

    The Global X Fang+ ETF (ASX: FANG) is an exciting exchange-traded fund (ETF) that has delivered excellent returns. There are plenty of compelling elements to know about this investment.

    It may not be as well-known as some of the other ASX-listed, US-focused ETFs, such as Betashares Nasdaq 100 ETF (ASX: NDQ) and iShares S&P 500 ETF (ASX: IVV), but I think it could be an ETF worth owning.

    The FANG ETF tracks an index of some of the largest US tech companies. The ETF was started in February 2020, so it’s relatively young compared to some ASX ETFs.

    If I were considering the FANG ETF, I’d want to know about the below factors.

    Concentrated exposure

    Investors who want exposure to the US technology giants can get it in abundance with this ASX ETF.

    There are only ten holdings in the portfolio, meaning there isn’t much diversification on the surface. As of 7 June 2024, these are the holdings and the weightings:

    • Nvidia (12.28%)
    • Alphabet (11.66%)
    • Apple (10.48%)
    • Broadcom (10.27%)
    • Netflix (9.81%)
    • Tesla (9.68%)
    • Amazon.com (9.66%)
    • Microsoft (9.43%)
    • Meta Platforms (9.19%)
    • Snowflake (7.5%)

    The holdings are meant to be equally weighted, and the current allocations are just a measure of the share price performance in recent times.

    While it may offer little diversification, the strength of this collective group of businesses has been exceptional in the last few years, so it has been beneficial to own them. In the three years to June 2024, the FANG ETF has returned an average of 22% per year. But I wouldn’t expect the next three years to be anywhere near as strong.

    Great tailwinds

    Many of these stocks give exposure to some of the strongest growth themes.

    Nvidia, Microsoft and Alphabet offer AI exposure. Alphabet, Apple and Meta Platforms are benefiting from the global growth of smartphone usage. Amazon, Microsoft, and Alphabet are generating good earnings growth in cloud computing. The long-term global shift towards online video is another benefit, which helps Netflix, Alphabet (YouTube) and Apple. And so on.

    Several global technological shifts are taking place, and these companies seem to be at the heart of those changes.

    Cheaper than the NDQ ETF

    One of the most popular ways to gain elevated exposure to US tech giants is the NDQ ETF, which has $4.7 billion of net assets. Betashares Nasdaq 100 ETF has an annual management fee of 0.48%, which is cheaper than what many global active fund managers might charge.

    If investors are buying the NDQ ETF for US tech exposure, then the FANG ETF’s annual management fee of 0.35% could be more appealing because it is 13 basis points (0.13%) cheaper per year.

    Over the three years to 31 May 2024, the NDQ ETF has delivered an average return per annum of 16.6%, which is weaker than the FANG ETF’s return of 22% per annum. Of course, past performance (and prior outperformance) can’t be relied on for future performance.

    The post 3 things about the Global X FANG+ ETF (FANG) every smart investor knows appeared first on The Motley Fool Australia.

    Should you invest $1,000 in Etfs Fang+ Etf right now?

    Before you buy Etfs Fang+ Etf 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 Etfs Fang+ Etf 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

    Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. 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 Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Amazon, Apple, BetaShares Nasdaq 100 ETF, Meta Platforms, Microsoft, Netflix, Nvidia, Snowflake, Tesla, 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 and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has positions in and has recommended BetaShares Nasdaq 100 ETF. The Motley Fool Australia has recommended Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Netflix, Nvidia, 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.

  • 1 ASX dividend stock down 34% to buy right now

    Modern accountant woman in a light business suit in modern green office with documents and laptop.

    The Charter Hall Long WALE REIT (ASX: CLW) share price is down 34% from April 2022, as shown on the chart below. The ASX dividend stock may be able to provide a high level of passive income.

    This real estate investment trust (REIT) is one of the larger businesses in the property sector.

    It has a portfolio across a range of different property sectors, including office leases with the government, pubs and bottle shops, telecommunication exchanges, service stations, quality retail, grocery and distribution, food manufacturing, waste and recycling management, Bunnings warehouse properties and other sectors.

    I’m not suggesting the ASX dividend stock just because it’s fallen. It also has a number of appealing factors that make it a compelling long-term buy.

    Appealing rental factors

    As the name of the REIT suggests, it has a long weighted average lease expiry (WALE) of 10.8 years. In other words, the business has signed its tenants on long-term rental contracts, which provides a lot of rental visibility for investors and locks in a lot of future income for the business.

    At 31 December 2023, Charter Hall Long WALE REIT had an occupancy rate of 99.9%, so its portfolio is generating almost as much rental income as it can. Nearly all of its tenants are government, ASX-listed, multinational or national tenants.

    The business is benefiting from a pleasing level of rental income growth, with around half of the portfolio exposed to CPI-linked reviews. The ASX dividend stock reported a weighted average rental review (WARR) of 4.3% in the FY24 first half, which I think is a solid level of rental growth for a diversified REIT.

    Large valuation discount?

    Every reporting period, the business tells the market what its net tangible assets (NTA) are. This is the business’ best estimate of the underlying value of its assets and liabilities.

    At 31 December 2023, the ASX dividend stock had NTA of $5.14 per security, so the Charter Hall Long WALE REIT share price is at a 31% discount to this.

    It’s hard to say precisely what the property portfolio is worth without going through a sales process, but another way to look at the business is based on how much passive income it’s producing.

    ASX dividend stock’s passive income yield

    The business pays out 100% of its operating (rental) profit each year, which is a generous distribution payout ratio.

    However, that choice can still lead to success for shareholders because the rental income is steadily growing, and over time, the properties will hopefully increase in value (thanks to the growing rental potential).

    The estimate on Commsec suggests the business could pay a distribution per unit of 27 cents, which is a distribution yield of 7.6%. I think that’s a solid yield and could grow in future years with rental growth, though what happens with interest rates could have a sizeable impact on its net rental profits in the coming years.

    The post 1 ASX dividend stock down 34% to buy right now appeared first on The Motley Fool Australia.

    Should you invest $1,000 in Charter Hall Long Wale Reit right now?

    Before you buy Charter Hall Long Wale Reit 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 Charter Hall Long Wale Reit 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 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.

  • 1 popular ASX stock I’m steering clear of

    Woman in an office crosses her arms in front of her in a stop gesture.

    Commonwealth Bank of Australia (ASX: CBA) is one of the most popular, large-cap shares on the ASX. However, bigger doesn’t automatically mean a better investment. Personally, I’m not attracted to the ASX bank stock for a few different reasons.

    Yes, the business has performed very well for investors over the past three decades and is still paying a solid dividend yield.

    But, I believe there’s more to consider about a potential investment than just the amount of passive income it can deliver. So here’s what makes me want to avoid CBA shares right now.

    Competition limiting growth

    I think the banking environment has changed significantly over the past decade due to the rise of digital banking and mortgage brokers.

    These days, smaller banks and lenders don’t need large branches to provide customers with the service they’re after. This has enabled lenders like Macquarie Group Ltd (ASX: MQG) and ING to increase their market share significantly.

    In addition, loans appear to have become commoditised, and prospective borrowers are increasingly using mortgage brokers to help them choose the best loan. Price is a key factor, so lender net interest margins (NIMs) are being challenged. In the quarterly update for the period ending 31 March 2024, CBA said its net interest income was 1% lower than the prior corresponding period, partly due to “continued competitive pressures.”

    Just think how many lenders there are on the ASX – CBA, Macquarie, Westpac Banking Corp (ASX: WBC), ANZ Group Holdings Ltd (ASX: ANZ), National Australia Bank Ltd (ASX: NAB), Bank of Queensland Ltd (ASX: BOQ), Bendigo and Adelaide Bank Ltd (ASX: BEN), AMP Ltd (ASX: AMP) and Pepper Money Ltd (ASX: PPM). That’s a lot of competition all vying to win volume.

    High CBA share price valuation

    Every business has a valuation, and we can compare different ASX shares based on certain metrics, such as the price-to-earnings (P/E) ratio or the price-to-book ratio (which compares a company’s market capitalisation to its balance sheet).

    Last month, broker UBS said CBA shares were trading at a FY25 price-to-book ratio of 2.7x and a forward P/E ratio of 23x. That puts it among the most expensive banks in the world. The CBA share price is close to 5% higher than it was a month ago, making it even more expensive again.

    Using UBS’ estimates, the Westpac share price is valued at 14x FY25’s estimated earnings, the ANZ share price is valued at 12x FY25’s estimated earnings and NAB is valued at 16x FY25’s estimated earnings.

    So it seems CBA stock is much more expensive than its peers. I also think there are plenty of other ASX shares, and even industries, where we can find better opportunities that can deliver stronger earnings growth for their valuation. And UBS thinks CBA’s earnings per share (EPS) of $5.72 in FY25 and $5.78 in FY26 are expected to be lower than FY24’s EPS of $5.79.

    Furthermore, it’s much harder to grow a huge ASX stock from $200 billion to $300 billion than a smaller business from $1 billion to $2 billion. The bigger a business becomes, the fewer customers it has to reach.

    So, while CBA is not a bad company by any stretch, I believe there are many smaller investments on the ASX that could deliver better outcomes for shareholders.

    CBA share price snapshot

    Since the start of 2024, CBA shares have risen by around 10%. That compares to a rise of just 3% for the S&P/ASX 200 Index (ASX: XJO).

    The post 1 popular ASX stock I’m steering clear of appeared first on The Motley Fool Australia.

    Should you invest $1,000 in Commonwealth Bank Of Australia right now?

    Before you buy Commonwealth Bank Of Australia 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 Commonwealth Bank Of Australia 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 Macquarie Group. The Motley Fool Australia has positions in and has recommended Bendigo And Adelaide Bank and Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

  • Don’t listen to the bears! Buy this ASX mining stock

    Over the long weekend, I wrote about how analysts at Goldman Sachs are feeling very bearish about Mineral Resources Ltd (ASX: MIN) shares. You can read about that here.

    The broker believes the ASX mining stock is seriously overvalued and could be destined to crash deep into the red.

    However, another broker doesn’t agree with this view and is urging investors to buy its shares right now.

    What is the broker saying about this ASX mining stock?

    According to a note out of Bell Potter, its analysts were pleased with news that the company has sold a 49% interest in the Onslow Iron Haul Road to Morgan Stanley Infrastructure Partners for gross proceeds of $1.3 billion. It commented:

    The timing of the haul road sale is in-line with guidance, following the commencement of ship loading on 21 May 2024. Prior to the announcement, we had estimated MIN would achieve net after tax proceeds of A$1.1 billion for 49% of 50Mtpa of capacity. The sale is value accretive relative to our estimates as (1) higher net-proceeds will be realised relative to our estimate, and (2) a lower proportion of potential future tolling fees was sold (40 Mtpa vs 50 Mtpa).

    In response to the news, the broker has reaffirmed its buy rating with a slightly trimmed price target of $84.00.

    Based on the current Mineral Resources share price of $68.63, this implies potential upside of 22% for investors over the next 12 months.

    What else did it say?

    Bell Potter notes that the Onslow iron ore operations are now ramping up and this means that iron ore production is on the verge of increasing materially.

    In light of this and expansions elsewhere in its portfolio, the broker believes the future is looking bright for the ASX mining stock. It concludes:

    The commencement of the ramp-up of Onslow operations is the precursor to strong forecast Iron Ore and Mining Services earnings growth, with Stage 1 completion expected by June 2025. MIN is also advancing an unparalleled portfolio of growth options. We expect near-term news flow on (1) the expansion of Onslow to 50Mtpa, (2) development and financing options for MIN’s energy discoveries, with (3) details on lithium expansion timing at Wodgina and Bald Hill also possible. EPS changes are, FY24: 0%, FY25: -46%, FY26: -12% on increased forecast depreciation allowances. Our valuation reduces -1.2% as we increase forecast sustaining capital in FY25.

    All in all, time will tell whether the bulls or bears make the right call on this one.

    The post Don’t listen to the bears! Buy this ASX mining stock appeared first on The Motley Fool Australia.

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

    Before you buy Mineral Resources 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 Mineral Resources 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 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.

  • Bell Potter says these ASX 200 shares are strong buys with 20%+ upside

    The ASX 200 index is home to the biggest and brightest shares that Australia has to offer.

    Two that could be strong buys this month according to analysts at Bell Potter are listed below.

    Here’s why they have been named on its favoured list in June:

    GUD Holdings Limited (ASX: GUD)

    The auto parts products company could be a top option for investors in June according to the broker.

    It likes the ASX 200 share due to the resilience of its legacy auto business and exposure to improving new car sales. The broker commented:

    The company recently reported an impressive FY23 result with NPAT of $119 million beating Citi forecast by 3% and consensus by 14%. This was driven by the better-than-expected APG performance (the highest-quality business in GUD, in our view) and the improvement in gearing. We see GUD as well-placed to benefit from the ongoing improvement in OEM supply constraints into FY24. Overall, our Buy rating for GUD is predicated on the relative resilience of the legacy auto business and improving momentum in new car sales, which should be favourable for APG’s earnings.

    Bell Potter has a buy rating and $12.80 price target on GUD’s shares. This suggests that upside of 22% is possible over the next 12 months. A dividend yield of ~3.5% is also expected from its shares over the same period.

    Transurban Group (ASX: TCL)

    Another ASX 200 share that has been given the thumbs up by analysts at Bell Potter this month is Transurban. It is a toll road operator with a portfolio of important roads across Australia and North America.

    Bell Potter likes the company due to its low risk cash flow, positive exposure to inflation, and its significant growth pipeline. It explains:

    We believe the current inflationary environment is favourable for Transurban given its inflation-linked revenue stream with annual escalators. Moreover, TCL provides low risk cash flows over the long term, with long concession duration (30+ years), and relative traffic/income resilience. The group’s current pipeline of growth projects is $3.3 billion (TCL’s share of total project cost) and further huge development opportunities are expected over the next few decades, supported by population and economic growth.

    The broker currently has a buy rating and $15.50 price target on its shares. This implies potential upside of 21% for investors from current levels. In addition, it is expecting a dividend yield in the region of 5%.

    The post Bell Potter says these ASX 200 shares are strong buys with 20%+ upside appeared first on The Motley Fool Australia.

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

    Before you buy Gud 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 Gud 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 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 Transurban 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.

  • Why the DroneShield share price is up 35% in a month

    a young woman raises her hands in joyful celebration as she sits at her computer in a home environment.

    The share price of ASX defence company DroneShield Ltd (ASX: DRO) has been on a tear recently – soaring close to 35% higher in just the last month alone. This continues an impressive run for DroneShield (and its shareholders), with the stock up an eyewatering 440% over the past year.

    Investors seemingly can’t get their hands on enough DroneShield shares. A recent share purchase plan, announced on 18 April, literally had to close early because of overdemand.

    The company was only hoping to raise $5 million from retail investors but received orders for an eye-popping $40 million. The company had to scale back the amount raised to its maximum cap of $15 million and return the remaining funds to investors.

    So, what’s the big deal about DroneShield? What has got investors so excited – and why has its share price been rising so much this past month?

    What does DroneShield do?

    DroneShield develops technology to protect military, government, infrastructure and other critical assets against attacks or surveillance by unmanned aerial devices (in other words, drones). Its products include tactical machinery that can be used to detect and disable drone attacks. It also develops software solutions that can analyse and assess drone threats in real time and launch a coordinated response.

    Recent military conflicts in Ukraine and the Middle East have demonstrated how prevalent drones have now become in modern warfare. They are cheap and easy to manufacture, which makes them a particularly pernicious threat on the battlefield. So, it’s no real surprise that demand for technology that effectively counteracts them has been on the increase.

    The financials

    This uplift in demand is reflected in DroneShield’s recent financial performance. FY23 revenues (for the 12 months ended 31 December 2023) surged 226% higher versus the prior year to a record $55.1 million. DroneShield also reported net profit of $9.3 million for the year — the first time the company has posted an annual profit in its entire history.

    And with revenues continuing to trend upwards at such a rapid rate, it’s unlikely to be the last.

    In its most recent quarterly activities report, for the three-month period ending 31 March 2024, DroneShield stated that revenues were up a mind-blowing 1000% versus 1Q23, to $16.5 million. What makes this result even more eye-catching is that the March quarter is usually DroneShield’s weakest in terms of sales — which suggests 2024 is already shaping up to be another bumper year.

    DroneShield also maintains a very strong balance sheet, with $56.4 million in cash and no debt (as of 31 March 2024).

    Why is the DroneShield share price up over the past month?

    DroneShield’s share price was buoyed by its 22 May announcement that it had been awarded a $5.7 million repeat contract with a US Government customer – with further ‘material orders’ expected. The order was for DroneShield’s counter-drone (‘C-UsX’) systems, which are capable of detecting and disabling attacks by unmanned devices on air, land and sea.

    And this comes hot on the heals of DroneShield’s 17 April announcement that it had been awarded a framework agreement with NATO – the first such agreement awarded in NATO’s history. This could increase DroneShield’s sales by an ‘order of magnitude’ over the coming years, according to the company’s press release.

    What’s in store for the future?

    Things are going pretty well for DroneShield at the moment, and management is understandably bullish about its near-term outlook.

    DroneShield considers the counter-drone market to still be in its infancy. It believes military and security companies are watching conflicts overseas and are realising just how vital counter-drone capabilities are going to be for their ongoing defence. This means spending on counter-drone technology could ramp up even further as militaries around the world bolster their stockpiles. As a global leader in counter-drone technology, DroneShield believes it is well-positioned to take advantage of these emerging trends.

    The post Why the DroneShield share price is up 35% in a month appeared first on The Motley Fool Australia.

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

    Before you buy Droneshield 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 Droneshield 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 Rhys Brock 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 DroneShield. 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.

  • Check out the coolest things Apple’s AI can do

    Apple WWDC 2024
    The company announced Apple Intelligence during its WWDC keynote Monday.

    Apple

    • Apple gave a highly anticipated announcement on its AI work at WWDC on Monday.
    • The company introduced Apple Intelligence
    • From summarizing messages to generating images, here are some of the coolest things it can do.

    Apple finally showed off its contribution to the AI wars, and there are some pretty cool use cases for it.

    The company made a splash with its AI announcement for Apple Intelligence during a keynote Monday at its annual WWDC event. CEO Tim Cook called Apple Intelligence "the new personal intelligence system that makes your most personal products even more useful and delightful."

    Apple Intelligence can be used across iPhones, iPads, and Macs. On your phone, for example, it can organize notifications by priority to make sure you don't miss something important. New writing tools available through Apple Intelligence can also help rewrite, proofread, and summarize text for you across apps like Mail, Notes, and Safari.

    Apple Intelligence can also lend a hand when it comes to image generation, another hot frontier for the AI race. You can create personalized images to add to your conversations in one of three styles — sketch, illustration, or animation.

    One example shown in the demo highlights that Photos learns to recognize people regularly in your pictures. For example, it can create an image of your friend blowing out candles that you can send when you wish them a happy birthday.

    This works in apps like Messages, Notes, Freeform, Keynote, and Pages.

    Apple WWDC 2024
    Apple Intelligence can handle tasks like these across various apps.

    Apple

    Apple Intelligence can also help with tasks that require knowledge of your "personal context," said Craig Federighi, Apple's senior vice president of software engineering.

    "Apple Intelligence is grounded in your personal information and context, with the ability to retrieve and analyze the most relevant data from across your apps as well as to reference the content on your screen like an email or calendar event you're looking at."

    As an example, Federighi imagined a meeting was rescheduled and he was wondering if it'd prevent him from getting to his daughter's play on time.

    Apple Intelligence can "understand who my daughter is, the play details she sent several days ago, the time and location for my meeting, and predicted traffic between my office and the theater," he said in the demo.

    Apple Intelligence will also open up a new world of possibilities for Siri, said Kelsey Peterson, Apple's director of machine learning and AI.

    It'll allow you to speak more conversationally with Siri; if you stumble on your words or accidentally misspeak before correcting yourself, Siri will still understand what you mean.

    Siri will also maintain conversational context, so you can follow up in a conversation without having to spell everything out for Siri again in each question or command you give.

    new Siri abilities powered by Apple Intelligence, as discussed at Apple WWDC 2024
    Apple Intelligence will revamp Siri with new capabilities like these.

    Apple

    If you don't want to talk to Siri, you'll be able to double-tap at the bottom of your screen and type your questions or commands in there.

    In addition, you can ask Siri questions about settings or features on your iPhone, even if you don't know their specific name, and she'll show you the answer or relevant result in the iPhone User Guide.

    Apple Intelligence will also give Siri on-screen awareness to understand and act upon what's on your screen.

    If a friend texts you his new address, for example, you can tell Siri from the Messages app, "Add this address to his contact card." Siri will take the address from the message on-screen, as well as the name of your friend, and carry out the task.

    In the demo, Siri was also able to handle a request to "show me my photos of Stacey in New York wearing her pink coat" and surface the photos.

    Read the original article on Business Insider

  • Can the Appen share price recover amid AI mania?

    Investor looking at falling ASX share price on computer screen

    Appen Ltd (ASX: APX) used to be part of ASX tech royalty. It was a member of the once-vaunted WAAAX group of stocks, along with WiseTech Global Ltd (ASX: WTC), Altium Ltd (ASX: ALU), Afterpay – now owned by Block Inc (ASX: SQ2) – and Xero Ltd (ASX: XRO).

    However, whereas the other WAAAX shares suffered through some rocky post-COVID years but have since mostly recovered to even greater highs (with the exception of Afterpay), the Appen share price has lagged far behind.

    Like, really far behind.

    Since topping out at a share price well above $40 back in August of 2020, Appen has lost close to 99% of its value, and is now trading for just 52 cents a share. Ouch!

    A company that once had a market cap of nearly $5 billion, is now sitting at just over $100 million.

    So, what went wrong?

    To answer that question, let’s start by taking a closer look at what Appen actually does.

    What is an Appen?

    Appen is a tech company that provides high-quality datasets to artificial intelligence (AI) companies. It uses a crowdsourced global workforce to annotate and curate data which it then sells to big tech companies to help ‘train’ their AI programs.

    Large language models, like ChatGPT, work by ingesting huge amounts of data. The AI algorithm searches through this data to identify patterns, correlations, and other connections, to essentially ‘learn’ how human language is constructed.

    Appen supplies the data.

    But hold on – isn’t AI meant to be a booming industry right now? It’s all over the news – and American AI giant Nvidia Corp (NASDAQ: NVDA) even briefly broke through the magical US$3 trillion market cap barrier. That puts it right up alongside tech behemoths Apple Inc and Microsoft Corp as the largest listed companies in America.

    So, if AI is booming, and AI programs need data to function, shouldn’t this be fertile ground for a massive rally in the Appen share price? So then why isn’t Appen following Nvidia to the top of the stock market?

    I’m glad you asked.

    Concentration risk

    Concentration risk is when a company relies too heavily on a small group of large customers to generate its revenues. If those customers cut back on their spending, it leaves a massive hole in the company’s income statement.

    Unfortunately, that is what happened to Appen.

    It has relied heavily on five major customers to generate most of its revenues: Microsoft, Apple, Meta Platforms, Google parent company Alphabet, and Amazon. And while that might seem like an enviable list of clients to have in your rolodex, relying on them too heavily is still risky.

    This came to a head back in 2021, when Apple changed the privacy policy on its operating system to limit the ability for digital advertisers to track customer activity across multiple apps. As part of the Apple update, users could now opt out of having their data collected.

    This led to a cutback in digital AI advertising spending from Appen’s major clients.

    As a result, Appen had to issue multiple earnings downgrades over the years, disappointing shareholders. For an indication of how far Appen has now fallen, compare its FY23 annual revenues of US$273.0 million with the record revenues of US$447.3 million it reported in FY21. That’s a decline of almost 40% in just two years.

    And there was more bad news to come in January 2024, when Google parent company Alphabet announced it would be severing all ties with Appen. To put this in context, Google contributed US$83 million of the US$273 million total revenues Appen reported in FY23.

    Can the Appen share price stage a comeback?

    Despite what should be favourable macroeconomic conditions, Appen has continued to struggle – and this latest piece of bad news from Google isn’t going to help it at all in the near term.

    However, if there is some silver lining to all this, it has been Appen’s pivot towards new markets – and away from its reliance on the big hitters in Silicon Valley. Appen’s Chinese clients delivered record-high quarterly revenue contribution of US$11.1 million in 4Q23. While this certainly won’t make up for the loss of Google, if anything is going to rescue Appen’s business it’s going to be new clients in new markets.

    The post Can the Appen share price recover amid AI mania? 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

    Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. 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 Rhys Brock has positions in Altium, Appen, Block, and WiseTech Global. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Altium, Amazon, Appen, Apple, Block, Meta Platforms, Microsoft, Nvidia, WiseTech Global, and Xero. 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 Block, WiseTech Global, and Xero. The Motley Fool Australia has recommended Alphabet, Amazon, Apple, Meta Platforms, Microsoft, and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.