Scott Kleinman spoke to Bloomberg Television on Wednesday about the private equity return environment.
Bloomberg Television
Apollo's Scott Kleinman warned of a "dry spell" for investors as deals from a friendlier era unwind.
Managers must adjust financial projections from deals done in the zero-interest rate era.
Investors want their money back, but managers often don't want to sell at a perceived discount.
A leading private equity executive just warned that investors are in for a "pretty dry spell for a few years."
"I'm here to tell you everything is not going to be OK," Scott Kleinman, the co-president of Apollo Global Management, said at a session during Berlin's SuperReturn International conference on Wednesday.
Managers have to adjust their financial projections for deals struck in the looser world of zero interest rates, when financing was cheap and consumers spent more.
"It's going to be a little bit tougher for private equity firms to see the types of returns they were looking for, versus in years past," Kleinman told Bloomberg Television on the conference's sidelines.
Some fund managers have to think creatively about how they wind down these deals, since the public markets have been touch-and-go for initial public offerings and potential private buyers have higher debt costs than a few years ago.
Private equity firms can't hold their investments forever. Their fund agreements typically limit their involvement to about 10 years, from fundraising to purchasing to selling, although it's become more common for investors to agree to extend the fund's life.
Investors don't want their money tied up for long, since they can't reinvest it. Across every stage of investing, from venture capital's startups to private equity's late-stage companies, investors are clamoring to get their money back. But managers don't want to sell at what they think is a discount to what the investment is worth.
"Eventually, sponsors are just going to have to accept that the valuation environment is lower and start selling companies," Kleinman said.
Apollo, long known for distressed investing, will be ready to invest: It had $65 billion of dry powder on hand at the end of the first quarter. The firm manages more than $670 billion overall.
A Ukrainian soldier with a machine gun in his hands rides along a dirt road on a Challenger-2 tank on August 3, 2023 in Ukraine.
Serhii Mykhalchuk/Global Images Ukraine via Getty Images
A retired UK colonel and a war historian are sounding the alarm on Britain's tank production.
They warned against relying on advanced weapons too costly to scale up, a mistake Nazi Germany made.
Their chief concern is with the Challenger-3 tank program, which is set to produce 148 vehicles.
A retired British Army colonel and a World War II historian are urging UK authorities to recalibrate weapons production, saying Britain is too fixated on building world-class military tech that it can't scale up.
This was the same problem that partially brought Nazi Germany to its knees, wrote Hamish de Bretton-Gordon and James Holland in a commentary published on Wednesday by The Telegraph.
"It would appear we are doomed to repeat the mistake Nazi Germany made in the Second World War — relying on sophisticated weaponry that is too expensive for mass production and will never produce decisive battlefield results," wrote the pair.
Holland is a World War II historian, and de Bretton-Gordon led several commands in his 23-year military career, including NATO's Rapid Reaction CBRN Battalion and the UK's Joint Chemical, Biological, Radiological, and Nuclear Regiment. Before he retired, de Bretton-Gordon was an assistant director in intelligence services.
Not enough tanks
One of the pair's major concerns is the Challenger-3 program, which aims to supply the UK with its latest, best-in-class tank fitted with a powerful 120mm smooth-bore gun.
But the UK is only planning to field 148 of them, and de Bretton-Gordon and Holland said that's far too few to fill the country's defense needs.
They recalled how Nazi Germany had obsessed over the quality of its tanks, chiefly the King Tiger, but meanwhile only managed to produce less than 500 of them. The tank most heavily produced by Germany at the time was the Panzer IV, but even so, Hitler's industrial complex built 8,500 vehicles at maximum.
Holland and de Bretton-Gordon contrasted that to the US producing more than 50,000 Sherman tanks and the Soviet Union building up to 84,000 T-34s.
In total, Nazi Germany built just under 50,000 tanks during the war, while the US built over 100,000. The Soviet Union built nearly 120,000 tanks.
The sheer numbers made a difference in World War II, and they'll make a difference now, de Bretton-Gordon and Holland wrote.
"The old adage of 'mass matters' is as relevant in the battle for the Donbas today as it was for the battles of Kursk, a few kilometers to the east in 1943," they wrote.
The UK's current main battle tank is the Challenger-2, with an estimated inventory of 227 vehicles. However, a UK Defense Committee report in March 2023 said that only about 157 are available for operations in a 30-day notice.
Prime Minister Rishi Sunak and Ukrainian President Volodymyr Zelenskuy meet Ukrainian troops being trained to command Challenger 2 tanks at a military facility on February 8, 2023 in Lulworth, Dorset, England.
Andrew Matthews/WPA Pool/Getty Images
Western tanks such as the Challenger 2 and Leopard 2 might win against their adversaries in a one-on-one fight, but the Ukraine war is showing that they aren't making enough of a difference because Kyiv lacks the mass to push through Russian lines, the war experts wrote.
As the pair put it: "One leopard is no match for a pack of hyenas."
Advanced technology can still turn the tide of battle, but it must be a given that the enemy cannot counter the threat, they added.
Both called on UK authorities to "wake up," writing:
Whoever leads the country next needs an urgent Defence Review. Two massive aircraft carriers and 150 tanks are no deterrence to the likes of Russia or China. And it is these countries which we need to design our deterrence around, not some imaginary enemy that suits single service rivalries. Ten billion pounds spent on tanks rather than carriers would give us the conventional deterrence so lacking at the moment, for instance.
Notably, de Bretton-Gordon was also once a commander of the 1st Royal Tank Regiment.
Russia's mass-production game
In June 2023, de Bretton-Gordon praised British armor for its quality in his commentary on the war in Ukraine. He said that Kyiv's battle doctrine allowed it to effectively use tanks supplied by the UK against Russia's low-morale conscripted forces.
"As a former tank commander, I know the Challenger 2 vastly outmatches what's left of Russia's armor," de Bretton-Gordon wrote.
While de Bretton-Gordon continues to laud the capabilities of British tanks, the optimism and global conversation regarding Ukraine has shifted as Russia puts its economy on a war footing.
Moscow quickly expanded its defense manufacturing complex and recruitment drives to fuel mass reinforcements in Ukraine, prompting worries that it could sustain its heavy losses for several years.
Sberbank CEO Herman Gref and Russian President Vladimir Putin.
Mikhail Svetlov/Getty Images
Russia's economy is "definitely and strongly overheated," said Sberbank CEO Herman Gref.
Gref said it's "impossible" to exceed the current production capacity, which is at 84%.
Russia's sanctions-hit economy grew 3.6% GDP last year, driven by wartime activities.
Russia's economy appears to have an intensifying issue following more than two years of war with Ukraine: It's overheating.
Herman Gref, the CEO of Sberbank — Russia's largest bank by assets value — said the country's economy is "definitely and strongly overheated," TASS state news agency reported on Tuesday.
Gref, who was speaking in parliament, said production capacity was at a historically high level of 84%. He added it's simply "impossible" to cross this production capacity threshold and produce even more.
At first glance, Russia's economy appears unusually resilient despite the West's sweeping sanctions. It posted 3.6% GDP growth last year.
However, reports from Russia suggest the country's economy is primarily driven by wartime activities that generate demand for military goods and services, subsidies that steady the economy, and sharp policy-making.
Rosy GDP figures alone are not a good measure of economic performance during wartime since weapons and munitions don't better the quality of life for Russians or contribute to future economic growth, Sergei Guriev, a former chief economist at the European Bank for Reconstruction and Development, said in January.
Gref was speaking in the context of Russia's central bank's tight policy. Its key interest rate at 16%. He said the central bank is pursuing a rational policy and that the economy must weather the current high-interest rate cycle, even though it is "unpleasant."
"There is no other way. We know approximately when rates were not raised for political reasons, and then how it ended," he said, referencing Turkey. The Turkish central bank has hiked interest rates all the way up to 50% to deal with persistent runaway inflation.
Gref's concerns echo those of Elvira Nabiullina, Russia's top central banker, who issued a warning in December that the country's economy was at risk of overheating.
Russia's labor crisis
Russia's inflation is in part due to a labor crisis. Its war in Ukraine is siphoning manpower away from its economy.
Russia's unemployment rate hit a record low 2.6% in April, while real wages jumped nearly 13% in March from a year ago due to an ongoing labor crunch, official data shows.
The manpower crunch has gotten so bad that the Russian military is now offering sign-on bonuses and salaries that are so competitive that even the country's lucrative oil and gas industry isn't keeping up.
This, in turn, contributes to price hikes. Russia's inflation rate stood at 8.17% from May 28 to June 3 — up from 8.07% a week earlier.
Russia's central bank is slated to announce its next interest rate decision on Friday.
Buying high-yield ASX dividend shares is always a risky business. Get the call right, and you can potentially lock in a lucrative stream of passive dividend income for years into the future. Not to mention the potential of valuable franking credits.
But get the call wrong, and you could be caught in the dreaded dividend trap and see your investment lose value whilst not receiving nearly as much income as you had banked on.
Whenever an ASX 200 share trades on a high dividend yield it should automatically ring alarm bells. After all, the market doesn’t usually price ASX dividend shares with yields at 8% or higher for long, unless it is expecting that yield to be unsustainable.
So today, let’s check out three of the highest-yielding shares on the S&P/ASX 200 Index (ASX: XJO), and discuss whether they might be worth buying, or else avoided at all costs.
A caveat: we’ll just be using ordinary dividends in our calculations today, as including special dividends gives off a distorted projection of what kind of income one can expect to receive going forward.
The three highest-yielding dividend shares on the ASX today
Fortescue is one of the more well-known dividend shares on the ASX, thanks to the veritable shower of cash it has rained onto its investors in recent years. Today, this ASX 200 iron ore miner is trading on a dividend yield of 8.58%, which typically comes with full franking credits attached too.
This dividend yield hails from Fortescue’s last two dividend payments, which were worth $1 and $1.08 per share respectively.
Fortescue’s ability to fund dividend payments rests almost entirely on the going price for iron ore in any given six-month period. As such, this is a difficult stock to anticipate when it comes to future dividends.
I wouldn’t bank on an 8%-plus yield forever if you buy Fortescue shares today. But I think Fortescue will continue to be one of the highest-yielding stocks on the ASX going forward, barring a major collapse in global iron ore markets.
Next up we have ASX 200 share and construction materials company Fletcher Building. Fletcher stock is today trading on a huge trailing dividend yield of 11.31%.
However, we already know this is an unsustainable yield. This yield comes from the 37.6 cents per share in unfranked dividends that the company forked out over 2023. But in the company’s half-year earnings report from February this year, Fletcher revealed a net loss after tax of NZ$120 million. This resulted in Fletcher suspending its dividend entirely.
The company’s high yield that we see today is more of a consequence of the near-40% drop its shares have endured over 2024 so far. With no future income on the horizon, this looks like a classic dividend trap to me.
Finally, we get to the highest-yielding ASX 200 share on the market today â fund manager Platinum. Platinum shares are currently trading on a monstrous dividend yield of 13.04% right now. This comes from the total of 13 cents per share that the company has doled out over the past 12 months.
Again, this looks like it could be a dividend trap. Platinum’s dividends, alongside its funds management business, have been on the slide for years. Back in 2018, Platinum funded an annual total of 32 cents per share in fully franked dividends. But by the 2023 calendar year, this had more than halved to 14 cents.
Fund managers usually make their profits (and thus fund their dividends) from their underlying base of funds under management (FUM). Unfortunately for Platinum, its FUM has been on a downward trajectory for years now.
Just last month, the company revealed that its total FUM decreased 11% from $15.46 billion at the end of March to $13.75 billion by the end of April.
Unfortunately, we have to conclude from this data that Platinum shares are another dividend trap today.
Should you invest $1,000 in Fletcher Building Limited right now?
Before you buy Fletcher Building 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 Fletcher Building Limited wasn’t one of them.
The online investing service heâs 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…
Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
The gold price has been trending higher since late October 2022.
And it really began to lift off in February this year.
On 15 February, bullion was trading for US$1,992 per ounce. After hitting a series of new all-time highs in May, the yellow metal has retraced a touch and is currently trading for US$2,370 per ounce.
As you’d expect, that 19% increase has offered heady tailwinds to ASX gold stocks like Northern Star Resources Ltd (ASX: NST), Regis Resources Ltd (ASX: RRL) and Newmont Corp (ASX: NEM), to name a few.
To give you some idea, since market close on 15 February, the S&P/ASX All Ordinaries Gold Index (ASX: XGD) has rocketed 23.0%. That compares to a gain of 3.8% posted by the All Ordinaries Index (ASX: XAO) over the same time.
Atop from buying gold stocks, a lot of investors are also looking to own the physical metal.
And with the gold price soaring, a new trend is taking off.
Rocketing gold price spurs new buying trend
As Bloomberg reports, South Korean convenience store GS Retail sells all the usual items you’d expect.
Next to the cash register and checkout snacks, you’ll also find a gold vending machine. The machine sells gold bars ranging in size from 37.5 grams to less than 1 gram.
Now, this trend first kicked off in 2022 with five GS Retail stores sporting gold vending machines.
But with the gold price rocketing, the company now has 30 gold vending machines in South Korea.
According to a GS spokesperson (quoted by Bloomberg):
Currently, we are seeing about 30 million won [AU$33,000] of sales per month. The gold vending machine draws customers’ attention due to increasing demand for safe haven assets and the spreading trend of micro-investing.
And the competition has taken note.
BGF Retail Co, which operates CU convenience stores in the country, started selling 1 gram gold cards on 1 April and sold out within two days.
“Sales accelerated as CU’s fixed-price gold products became cheaper than the market price,” a CU spokesperson said.
Commenting on the soaring gold price and rising consumer demand for physical bullion, Â Seokhyun Paik, an economist at Shinhan Bank, said:
Retail investors who put their money into assets such as US Treasury bonds and Japanese yen from last year didn’t get a return they wanted. Then they turned their attention to gold.
Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Newmont wasn’t one of them.
The online investing service heâs 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…
Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
It’s looking like this Thursday will be another positive session for ASX shares (touch wood). At the time of writing, the All Ordinaries Index (ASX: XAO) has gained a healthy 0.65% and is back over 8,070 points. But let’s talk about what’s going on with the Core Lithium Ltd (ASX: CXO) share price.
Core Lithium shares are having a stinker. This ASX lithium stock closed at 12.5 cents yesterday afternoon, but today is trading at 11.1 cents at the time of writing, down a horrid 12% so far this session. Â
What’s worse, Core Lithium shares descended as low as a flat 11 cents each earlier this morning, which marks a new 52-week low for the lithium stock. This new 52-week low is just the latest blow for Core’s long-suffering shareholders though. Get ready for some sobering numbers.
Over just the past five trading days, the Core Lithium share price has given up more than 17% of its value. Year to date, we’ve seen 58.5% wiped off the value of this company. Investors are also nursing a loss of 89.6% over the past 12 months.
The Core Lithium share price is down a staggering 94% or so from the company’s last all-time highs of over $1.87 a share that we saw back in late 2022. Check all of that out for yourself below:
Just how low can the Core Lithium share price go?
Core Lithium’s more recent woes can be put down to a series of unfortunate events. Firstly, lithium prices have decisively come off the boil over the past 12 months or so. This has put pressure on the prices of almost all ASX lithium shares.
But Core Lithium has been dealing with some specific issues as well, which seem to have dented investor confidence.
The company also posted a net loss of $167.6 million for the six months ending 31 December, which didn’t exactly help boost sentiment. A more recent quarterly update did nothing to assuage these concerns either.
Back in March, Core also revealed that its CEO Gareth Manderson would abruptly depart. Last month, Core did announce that Paul Brown would take Manderson’s place, but this game of musical chairs at the top of the company also seems to have contributed to the investor apathy we see today.
So where are Core shares destined to head from here? Well, it might be prudent to keep legendary investor Benjamin Graham’s wise words in mind here. Graham once said, “In the short run, the market is a voting machine but in the long run, it is a weighing machine”.
Well, investors have been voting the Core Lithium share price down significantly in recent months. But the company doesn’t have a lot of good news that might tip the balance of the market’s weighing machine.
As such, it’s hard to see what might happen next. But until there’s some good news out of the company, we might not see much improvement in Core Lithium shares from here.
ASX expert says sell
That’s certainly the view of one ASX broker right now. As we covered last month, ASX broker Goldman Sachs doesn’t see Core restarting its Finniss mine anytime soon. Goldman gave the Core Lithium share price a sell rating alongside a 12-month share price target of 11 cents per share.
Probably not the news that Core investors want to hear right now, but let’s see if this company can prove its detractors wrong.
At the current Core Lithium share price, this ASX lithium stock has a market capitalisation of $267.11 million.
Should you invest $1,000 in Core Lithium Ltd right now?
Before you buy Core Lithium Ltd 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 Core Lithium Ltd wasn’t one of them.
The online investing service heâs 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…
Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has 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.
Investors have been buying up the Life360 shares in recent months, doubling the share price since the beginning of the year. At the time of writing, the Life360 share price is trading at $14.69.
Rapid growth
Life360 is a leading technology platform connecting millions of people worldwide. The Life360 mobile application offers features including communication, driving safety, digital safety, and location sharing.
The company has experienced rapid growth in recent years, particularly in the United States. Life360’s subscription revenue rose from US$86.6 million in 2021 to US$220.8 million in 2023. Management believes its core subscription revenue could continue growing by at least 20% in 2024.
While the company is still incurring a net loss, it has reduced from $33.6 million in 2021 to $28.2 million in 2023.
Listing on Nasdaq
Earlier this week, Life360 announced the launch of its US IPO, offering 5,750,000 shares of common stock. The company plans to use the proceeds from the offering to enhance its financial flexibility, create a public market for its stock in the US, and for general corporate purposes.
Once completed, the company expects to trade on Wall Street under the ticker code Life360 Inc (NASDAQ: LIF). The company’s Chess Depositary Interests (CDIs), representing shares of common stock, will remain listed on the Australian Securities Exchange (ASX).
What does this mean for ASX investors?
As my colleague James highlighted, analysts at Bell Potter believe this could be positive news for Life360 shares and its current shareholders. The broker previously noted:
Key potential catalysts for the stock include another strong quarter of paying circle growth in Q2 (April was another good month), a potential upgrade to the 2024 guidance sometime in H2, and a U.S. listing at some stage in the next 12 months.
We have increased the multiple we apply in the EV/Revenue valuation from 5.5x to 6.5x given the proposed US listing and potential re-rating of the stock given the much higher multiples of comps like Reddit (NYSE: RDDT).
Bell Potter has a buy rating and a $17.75 price target on Life360 shares.
Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Life360 wasn’t one of them.
The online investing service heâs 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…
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 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.
Five Below's sales were hurt due to overstock of Squishmallows and price-sensitive customers.
Inflation has made customers prioritize food and drink items, said Five Below CEO.
Low-cost retailers say they're seeing a slowdown in discretionary spending.
Five Below said its sales were hurt this quarter because it bought far more Squishmallows than its customers wanted.
The popular soft toys went viral in the years after their 2017 launch, becoming "Gen Z's Beanie Babies," Business Insider reported in 2020.
On Wednesday, Five Below cut its forecasts for the year because of price-sensitive customers who are prioritizing buying food, candy, and drinks over Squishmallows. Outdated inventory, like older Squishmallows, is also hurting Five Below, chief executive officer Joel Anderson said in an earnings call on Wednesday.
"The quarter solidified that consumers are feeling the impact of multiple years of inflation across many key categories, such as food, fuel, and rent, and are therefore far more deliberate with their discretionary dollars," Anderson said.
Shares of the retailer were down nearly 4% at closing time and have fallen 38% year-to-date.
Just months earlier, Squishmallows looked like a good bet for Five Below, which lists 40 items from the brand on its website. The product was on Five Below's list of "strong performers" for 2023, Anderson said on a March earnings call.
However, a rise in cost of living around the US is hitting Five Below, like other low-cost retailers who are seeing a slowdown in non-essential spending.
A rise in expenses means that Americans are saving less — the personal savings rate slumped to 3.2% in March, according to government data, down from 5.2% a year ago.
Over the last month, McDonald's, Burger King and Wendy's all announced meals at or under $5 to win back penny-pinching customers.
Russian leader Vladimir Putin (left) and former President Donald Trump (right).
Contributor via Getty Images; Seth Wenig-Pool via Getty Images
Vladimir Putin says he thinks Donald Trump's felony conviction was politically motivated.
Putin said Trump's rivals were "simply using the judicial system in an internal political struggle."
A Trump campaign spokesperson said that Putin "knows a second Biden term means a weaker America."
Former President Donald Trump's conviction in his Manhattan hush money criminal trial was due to his rivals' political machinations, Russian leader Vladimir Putin said on Wednesday.
"It is obvious all over the world that the prosecution of Trump, especially in court on charges that were formed on the basis of events that happened years ago, without direct proof, is simply using the judicial system in an internal political struggle," Putin told reporters at the annual St. Petersburg International Economic Forum, per Reuters.
"They are burning themselves from the inside, their state, their political system," he said.
But getting convicted might have become a blessing in disguise for The presumptive GOP presidential nominee. Trump's campaign said on Monday that they raised $53 million within a day of his guilty verdict.
"This shows that people of the United States have no trust in the justice system, which makes such decisions. On the contrary, they believe that these decisions were made for political reasons," Putin said on Wednesday, referencing the surge in donations to Trump's campaign, per the state-run Russian news agency TASS.
"There's one candidate who Putin has endorsed— Crooked Joe Biden— because he knows a second Biden term means a weaker America," the spokesperson said in a statement to BI.
"But we will work with any US leader whom the American people trust," he added.
Trump was quick to capitalize on Putin's remarks then, saying that it was actually "a great compliment" because it showed how he was a threat to Russia's interests.
"He doesn't want to have me. He wants Biden because he's going to be given everything he wants, including Ukraine," Trump said at a rally in South Carolina in February.
To be sure, Biden has stridently opposed Russia's war in Ukraine. Besides galvanizing US allies to support Ukraine, the Biden administration has sent around $51 billion in military assistance since the war began in February 2022.
On the other hand, Trump has been eager to flaunt his admiration and relationship with Putin. The former president once praised Putin's justification for invading Ukraine as a "genius" and "wonderful" move.
"As Putin said, 'You're the most vicious president ever. There's never been a president that did this to me.' And yet, I got along with him. Isn't that nice," Trump said in July.
The first ASX 300 share earning a broker upgrade is global wine company Treasury Wine Estates Ltd (ASX: TWE).
After gaining 5.3% yesterday, Treasury Wine shares are up 1.0% today, trading for $12.12 apiece. That sees the Treasury Wine share price up 13.2% so far in 2024.
Atop those share price gains, the ASX 300 share trades on a partly franked trailing dividend yield of 2.8%.
Investors have been bidding up the stock following Monday night’s bullish update on the growth opportunities in its North American markets. Management also reaffirmed the company’s full-year guidance for FY 2024.
Barrenjoey has raised Treasury Wine to a ‘neutral’ rating. But following five consecutive trading days of gains, the broker’s $11.50 share price target is more than 5% below current levels.
Which brings us to the second ASX 300 share getting a broker upgrade, jewellery retailer Lovisa Holdings Ltd (ASX: LOV).
Earlier this week, Lovisa was downgraded by numerous brokers, including Barrenjoey, Citi, Morgan Stanley and Canaccord.
That came after the company announced on Monday that CEO Victor Herrero will be stepping down on 31 May next year. With Herrero widely credited for helping drive the company’s strong outlet growth in recent years, investors sent the stock crashing 10.4% on Monday and another 2.2% on Tuesday.
But following Wednesday’s rebound and another 2.0% intraday gain today, the Lovisa share price has recouped much of those losses to be trading for $31.15. That sees the ASX 300 share up 55.9% in 12 months. Lovisa shares also trade on a partly franked trailing dividend yield of 2.6%.
And Macquarie believes the company can continue to grow. The broker raised Lovisa to an ‘outperform’ rating with a $33.70 price target. That represent a potential upside of more than 8% from current levels.
Rounding off the list…
One stock getting downgraded
The ASX 300 share getting hit with a broker downgrade is online-only furniture and homeware retailer Temple & Webster Group Ltd (ASX: TPW).
The Temple & Webster share price is up 0.6% today at $9.53. That sees the stock up a whopping 102% over 12 months.
While Citi still sees more growth potential from here, the broker reduced its target price by 10% to $11.00 a share.
That still represents a potential upside of more than 15% from today’s levels.
Should you invest $1,000 in Lovisa Holdings Limited right now?
Before you buy Lovisa 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 Lovisa Holdings Limited wasn’t one of them.
The online investing service heâs 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…
Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Lovisa, Macquarie Group, and Temple & Webster Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool Australia has recommended Lovisa, Temple & Webster Group, and Treasury Wine Estates. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
