The team at Bell Potter has provided updated guidance on two ASX small-cap stocks that indicate big upside in 2026. 

Before investing in small-cap stocks, it’s important to remember they can come with increased volatility. 

Many small-cap companies operate pre-profit, relying on external/government funding for research and development. 

This can create large fluctuations in share price. 

On the flip side, there is always the possibility of small-cap companies becoming the large-cap stocks of the future. 

With this in mind, here are two that have drawn attractive price targets from Bell Potter. 

Biome Australia Ltd (ASX: BIO)

Biome Australia develops and commercialises clinically backed innovative live biotherapeutics (probiotics), marketing 18 products under the ‘Activated Probiotics’ brand.

Activated Probiotics is a range of live biotherapeutic products aimed to help prevent and support the management of various health concerns. 

Its stock price is down more than 30% over the last 12 months. However, it has risen 7% so far in 2026. 

The team at Bell Potter released a new report on Biome Australia following its quarterly activities and cash flow report.

Bell Potter said the 2Q26 result was excellent. 

Results included: 

• Quarterly EBITDA / operating cash flow passing $1m for the first time
• 2Q26 sales had been pre-released and were up c.41% yoy to c.$6.5m
• Cash receipts were up c.43% to c.$6.2m
• Annualised run rate on sales is now c.$26m, while gross margins are being maintained at >61%

The broker has maintained its buy recommendation and 12-month price target of $1 on this ASX small-cap stock. 

From yesterday’s closing price, that indicates an upside of more than 122%. 

We have adjusted our 1H26 estimate to reflect the EBITDA beat, although we are maintaining our FY26 estimates. It is encouraging to see operating leverage begin to flow through to the financial results. Free cash flow generation should be the final hurdle to attracting wider investor interest. We look forward to the HY update that should enable investors to gain further insight into progress on international expansion and brand development through the Mecca partnership.

AML3D Ltd (ASX: AL3)

Bell Potter has also maintained its speculative buy recommendation on ASX small-cap defence stock AML3D Ltd. 

This update came after the company’s quarterly report yesterday, which included significant order growth.

AL3’s December 2025 quarterly report points to increased system orders in the US, emerging demand signals from the UK and European defence sectors and ongoing R&D in Australia to support the next generation of ARCEMY systems.

Bell Potter said the company’s order book is now $16.5m, which includes $9m of orders on hand at the opening of FY26 plus more recently announced orders including $1.7m from FasTech (US contract printer), $4.5m from HII (Newport News Shipbuilding ordering two ARCEMY systems), and $1.2m from Austal (for a rapid deployment system). 

AL3 retained a strong cash position at quarter-end of $29m (prior quarter $31m), with no debt. 

The broker has a price target of $0.40 on this ASX small-cap stock, which indicates an upside of 122%. 

AL3’s technology is particularly suited to maritime applications, giving it strong leverage into demand growth from the US Navy’s Maritime Industrial Base and the US SHIPS Act. Over FY26-27, we expect AL3 to increase deployment of ARCEMY  systems to the US and Europe, increase prototyping activity and ultimately commence commercial scale production of components.

The post Are these ASX small-cap stocks about to double? appeared first on The Motley Fool Australia.

More reading

• Is this ASX defence stock the next DroneShield? Broker tips 120% upside
• This ASX small-cap stock just jumped 10%. Here’s why

Motley Fool contributor Aaron Bell 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 Greatland Resources Ltd (ASX: GGP) share price is in focus after the miner produced 86,273 ounces of gold in the December quarter at an all-in sustaining cost (AISC) of $2,196 per ounce, generating $406 million in cash flow and closing the quarter debt free with $948 million in cash.

What did Greatland Resources report?

• Quarterly gold production: 86,273 ounces; copper production: 3,528 tonnes
• All-in sustaining cost (AISC): $2,196 per ounce of gold
• Net revenue: $507 million from sales of 72,212oz gold and 3,301t copper
• Operating cash flow: $406 million; closing cash balance at $948 million
• No debt; undrawn $75 million working capital facility for total liquidity of $1.02 billion
• Completion of Havieron Feasibility Study confirming pathway to world-class, low-cost mine

What else do investors need to know?

The December quarter capped Greatland’s first full year of owning the Telfer operation, in which it produced over 335,000 ounces of gold and 14,000 tonnes of copper, generating approximately $1.3 billion in cash flow. The company invested $61.2 million in Telfer growth capex and completed more than 54,000 metres of resource development drilling, with exploration progress targeting potential mine life extensions.

Safety remained a focus, with just one lost time injury during the quarter and improved TRIFR safety metrics. Greatland also strengthened future prospects by completing the Havieron Feasibility Study and securing a $500 million corporate debt facility commitment with a syndicate of major Australian banks, although the company remains debt free at quarter end.

What did Greatland Resources management say?

Managing Director Shaun Day said:

We are pleased to have delivered another strong operational performance in the December quarter, with gold production of 86,273 ounces at an AISC of $2,196 per ounce… Conclusion of the December quarter completes our first full 12 months of ownership of Telfer in which we produced over 335,000 ounces of gold and 14,000 tonnes of copper, generated ~$1.3 billion cash flow from operations, and built our net cash by ~$800 million. An important milestone was achieved during the quarter with the completion and release of the results of the Havieron Feasibility Study which confirmed the pathway to a world-class, long-life, lowest quartile cost Australian gold-copper mine.

What’s next for Greatland Resources?

Looking ahead, Greatland expects full-year FY26 production to reach the upper end of its 260,000–310,000 ounce gold guidance range, while aiming for AISC at the lower end of the $2,400–$2,800 per ounce range. Development of the Havieron project is now underpinned by both strong internal cash generation and a $500 million debt commitment, with first gold targeted roughly 2.5 years after receiving environmental approvals.

Ongoing drilling programs at Telfer and Havieron are set to support further growth and potential life extensions, with resource estimates due for key underground targets in early 2026.

Greatland Resources share price snapshot

Over the past 12 months, Greatland Resources shares have risen 92%, outperforming the S&P/ASX 200 Index (ASX: XJO) which has risen 6% over the same period.

View Original Announcement

The post Greatland Resources delivers strong Q4 cash flow and mine expansion progress appeared first on The Motley Fool Australia.

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• Woodside Energy posts record 2025 production as project pipeline advances
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• West African Resources posts strong December quarter cash inflows
• 5 things to watch on the ASX 200 on Wednesday

Motley Fool contributor Laura Stewart 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. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial summary of the company announcement. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.

The Ampol Ltd (ASX: ALD) share price is in focus today after the company reported a strong Lytton Refiner Margin and lifted preliminary FY25 profit figures.

What did Ampol report?

• Lytton Refiner Margin (LRM) for Q4 FY25 was US$15.14 per barrel, up from US$4.60 year-on-year
• Preliminary Group RCOP EBITDA for FY25 of approximately $1,435 million
• Preliminary Group RCOP EBIT for FY25 of approximately $945 million
• Convenience Retail volumes fell 4.4% to 3,489 million litres (ML) over the year
• Total sales volume (Group) declined 7.7% to 25,175 ML
• Refinery production rose 4.9% year-on-year to 5,519 ML

What else do investors need to know?

Ampol’s Convenience Retail business in Australia achieved mid-single digit EBIT growth, showing resilience despite a dip in volumes. In New Zealand, the fourth quarter delivered a stronger EBIT, helping full-year results remain steady amid challenging conditions.

The fuels and infrastructure segment in Australia posted high single-digit percentage RCOP EBIT growth, even as wholesale volumes declined. International fuels and infrastructure delivered a modest profit, reflecting the company’s focus on supplying its own operations in Australia and New Zealand.

What’s next for Ampol?

Ampol will detail its final audited FY25 results on 23 February 2026. Management highlights a continued focus on operational performance and margin optimisation in both refining and retail segments.

The company looks to maintain momentum in convenience and infrastructure while navigating changing market dynamics, especially in the face of economic challenges across its markets.

Ampol share price snapshot

Over the past 12 months, Ampol shares have risen 7%, running slightly ahead of the S&P/ASX 200 Index (ASX: XJO) which has risen 6% over the same period.

View Original Announcement

The post Ampol FY25 profits rise on refinery margin strength appeared first on The Motley Fool Australia.

More reading

• Emerald Resources shares in focus after Dingo Range resource boost
• Woodside Energy posts record 2025 production as project pipeline advances
• Greatland Resources delivers strong Q4 cash flow and mine expansion progress
• West African Resources posts strong December quarter cash inflows
• 5 things to watch on the ASX 200 on Wednesday

Motley Fool contributor Laura Stewart 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. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial summary of the company announcement. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.

I think that one of the best ways to grow wealth is to make buy and hold investments.

The good news is that exchange traded funds (ETFs) make this style of investing easier than ever by allowing you to buy large groups of shares in one go.

But which Australian ETFs could be good buy and hold forever options? Let’s take a look at three top funds:

Vanguard Australian Shares Index ETF (ASX: VAS)

The first Australian ETF that could be a forever-style hold is the Vanguard Australian Shares Index ETF.

Rather than relying on judgement calls or stock selection, this ETF simply mirrors the Australian share market itself. As companies grow, shrink, merge, or disappear, the index adjusts automatically. That means the portfolio is always evolving without needing to take action.

This is a powerful idea for long-term investors. You are not betting on which shares will win, only that Australian businesses as a whole will continue to generate profits over time. Dividends, franking credits, and gradual capital growth are all captured along the way.

The Vanguard Australian Shares Index ETF works because it removes decision-making. For many investors, that simplicity is exactly what allows them to stay invested for decades.

Betashares Australian Quality ETF (ASX: AQLT)

Another Australian ETF to consider is the Betashares Australian Quality ETF, which takes a more selective approach.

Instead of owning the entire market, the fund focuses on ASX shares with strong balance sheets, high returns on equity, and consistent earnings. In other words, it leans toward businesses that tend to do fewer things wrong over time.

In addition, quality-focused portfolios often experience less extreme swings than the broader market, which can make them easier to hold through periods of uncertainty. That can matter just as much as returns when investing over very long timeframes.

Overall, the Betashares Australian Quality ETF could suit investors who want Australian exposure, but with a built-in tilt toward financial strength and discipline rather than size alone.

The team at Betashares recently recommended this ETF.

BetaShares S&P/ASX Australian Technology ETF (ASX: ATEC)

A final Australian ETF to look at is the BetaShares S&P/ASX Australian Technology ETF.

It provides investors with exposure to Australia’s technology sector, including software, payments, and digital platform businesses. This is a space defined by innovation, but also by volatility, and that has been on full display recently.

This ASX ETF is currently down almost 25% from its 52-week high amid broader weakness across global tech shares. This could prove to be a compelling opportunity for buy and hold investors.

This fund was also recently recommended by Betashares.

The post 3 Australian ETFS to buy and hold forever appeared first on The Motley Fool Australia.

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The West African Resources Ltd (ASX: WAF) share price is in focus today after the gold miner reported operating cash inflows of $388.6 million for the December quarter and finished the year with $584.1 million in cash and cash equivalents.

What did West African Resources report?

• Operating cash inflow: $388.6 million for the quarter; $789.7 million for the year to date
• Ending cash and cash equivalents: $584.1 million at 31 December 2025
• Payments to suppliers and employees: $229.3 million for the quarter; $616.7 million for the year to date
• Capital expenditure (property, plant, equipment): $112.9 million for the quarter; $430.0 million for the year
• Borrowings: $24.3 million proceeds raised; $27.9 million repayments in the quarter
• No dividends announced during the quarter

What else do investors need to know?

West African Resources has a robust financial position, with total available funding of $584.1 million at quarter end. The group increased its cash balance significantly over the quarter, highlighting strong operating performance and ongoing cash generation.

The company continues to invest in property, plant, and equipment, supporting its production operations. Financing activity included both the drawing and repayment of borrowings during the quarter, with major secured loans arranged through Sprott Resource Lending Corp and Coris Bank International SA, as well as unsecured equipment finance.

What’s next for West African Resources?

Looking ahead, West African Resources appears well-funded to support further production and possible expansion projects, with no indication of funding shortfalls. The company’s consistent cash flows from its mining operations offer a foundation for ongoing site development and potential new exploration activities.

Investors will likely watch for future updates on production volumes, expansion projects, or any material changes in capital allocation as the company builds on its strong cash position.

West African Resources share price snapshot

Over the past 12 months, West African Resources shares have risen 132%, outperforming the S&P/ASX 200 Index (ASX: XJO) which has risen 6% over the same period.

View Original Announcement

The post West African Resources posts strong December quarter cash inflows appeared first on The Motley Fool Australia.

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Motley Fool contributor Laura Stewart 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. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial summary of the company announcement. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.

It’s fair to say the S&P/ASX 200 Index (ASX: XJO) is off to a strong start in 2026. 

Australia’s benchmark index is up approximately 2% already in January. 

This has been led by resources and materials sectors that have both risen by roughly 10%. 

Two strong performing individual ASX 200 stocks have been Alcoa Corp (ASX: AAI) and Lynas Rare Earths Ltd (ASX: LYC). 

However, yesterday both companies endured a heavy sell-off, with share price drops of 9% and 5% respectively. 

The question investors might now be asking is if this is a buy the dip situation or if these stocks have already peaked.

Let’s find out. 

Alcoa Corp (ASX: AAI)

Alcoa is a vertically integrated aluminum company whose operations include bauxite mining, alumina refining, and manufacturing primary aluminum. 

It is the world’s largest bauxite miner and alumina refiner by production volume, and the eighth-largest aluminum producer. Profits are closely tied to prevailing commodity prices along the aluminum supply chain.

Its share price is up roughly 50% in the last 12 months, and remains up 5% in 2026 even including yesterday’s heavy fall. 

It has benefited from tailwinds over the last year including rising commodities, strategic decisions, and new capital flows into hard assets. 

There was no price sensitive news out of the company yesterday, however the stock price tumbled almost 9%. 

After hitting 52 week highs prior to releasing its full-year FY25 earnings, it appears this ASX 200 stock is now coming back down closer to fair value. 

So should investors buy the dip?

Analyst ratings via TradingView suggest fair value for Alcoa Corp shares is around $87.86. 

This is just 3% higher than yesterday’s closing price. 

Based on this price target, it seems there is limited upside potential for this ASX 200 stock. 

Lynas Rare Earths Ltd (ASX: LYC)

Lynas Rare Earths have been another mining stock that has enjoyed a bull run in the last 12 months. 

Its stock price is up almost 150% in the last 12 months, including 31% just in January 2026. 

However yesterday it appears investors were profit taking as the stock price fell 5%. 

The company is primarily involved in the exploration, development, and processing of rare earth minerals in Australia and Malaysia. It is one of few rare earth producers outside of China.

Expert ratings of this ASX 200 stock are mixed. 

Morgan Stanley is the most optimistic, with a price target of $19.45 suggesting an upside of 21.49%. 

However, Bell Potter believes that this ASX 200 stock has peaked. 

The broker has a price target of $11.15, which indicates a downside of 30%. 

The post Should you buy the dip on these red hot ASX 200 stocks? appeared first on The Motley Fool Australia.

More reading

• Alcoa shares dip despite 25% earnings boost in FY25
• Why Lynas shares could crash 33%
• Lynas, South32, Liontown: Can these surging shares go higher?
• 5 things to watch on the ASX 200 on Friday
• Why is this ASX 200 mining share up 93% in six months?

Motley Fool contributor Aaron Bell has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Lynas Rare Earths Ltd. 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.

S&P/ASX 200 Index (ASX: XJO) shares closed higher on Tuesday, up 0.92% to 8,941.6 points.

In this article, three experts provide their views on three big names in the marketplace today.

South32 Ltd (ASX: S32)

The South32 share price closed at $4.50 on Tuesday, up 2.51%, after hitting a 52-week high of $4.54.

Morgans has a buy rating on this diversified ASX 200 mining share with a 12-month price target of $5.

The broker increased its price target from $4.50 after South32 released its 2Q FY26 update last week.

Morgans said South32 achieved a modest beat on consensus expectations for operations, supported by strong alumina and silver output.

The broker commented:

FY26 guidance on operated assets unchanged, Brazil Aluminium under review.

We have applied updated house precious metal forecasts to our estimates.

Post-Illawarra divestment, S32 is ~90% base metal producer with limited execution risk (ex-Hermosa) and enjoying a healthy (and material) upgrade cycle from copper, aluminium and silver prices.

Positioned to benefit from the upcycle, we maintain our BUY rating with a A$5.00 Target Price (was A$4.30).

Sigma Healthcare Ltd (ASX: SIG)

The Sigma Healthcare share price closed at $3.09 on Tuesday, up 0.98%.

On The Bull this week, Remo Greco from Sanlam Private Wealth revealed a hold rating on this ASX 200 healthcare share.

Greco explained:

At its recent annual general meeting, this retail pharmacy franchisor and pharmaceutical wholesaler announced it would continue to roll out new stores domestically and internationally. It would revitalise the Amcal and Discount Drug Store brands.

Chemist Warehouse network sales were up 17.9 per cent in the first quarter of 2026 and like-for-like sales were up 14.7 per cent.

So far, SIG appears to be delivering on its lofty expectations.

Technology One Ltd (ASX: TNE)

The Technology One share price closed at $27.11, down 0.26% today.

Stuart Bromley from Medallion Financial Group has a hold rating on this ASX 200 tech share.

Bromley described the company as a high quality, recurring revenue software business with product depth and customer loyalty.

However, he noted the share price pullback, with Technology One losing 31% of its value over six months.

Bromley commented:

Near term momentum has been lacklustre, with growth rates moderating.

The share price pull-back leaves TNE as a hold, or even presents an opportunity to accumulate a longer term powerhouse during a period of sector- wide re-pricing.

TNE remains a structural leader in enterprise applications and we don’t see this market strength ceasing any time soon.

The post Sigma Healthcare, TechnologyOne, South32 shares: Buy, hold, or sell? appeared first on The Motley Fool Australia.

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• 3 unstoppable ASX 200 shares to buy and hold forever

Motley Fool contributor Bronwyn Allen has positions in South32. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Technology One. The Motley Fool Australia has recommended Technology One. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

ASX ETFs are a great investment tool for instant diversification.

Many investors see ETFs as a way to reduce risk/overexposure. 

However many investors also assume this limits upside. 

It’s true that an ASX ETF isn’t going to double in a day of trading like a speculative penny stock. 

But thematic funds can still post market beating gains. 

As a benchmark, the S&P/ASX 200 Index (ASX: XJO) is up 2.45% year to date. 

The S&P 500 Index (SP: .INX) is up 1.72%. 

Here are three ASX ETFs that are off to a red hot start to the year – bringing investors big returns compared to these benchmark indexes. 

BetaShares Global Gold Miners ETF – Currency Hedged (ASX: MNRS)

Gold shares and gold mining companies were one of the headline stories of 2025 as investors looked towards the safe-haven asset. 

This investment trend has continued into 2026. 

The Betashares Global Gold Miners ETF has already risen 22.92% since the start of the year. 

According to Betashares, the fund aims to track the performance of an index (before fees and expenses) that comprises the largest global gold mining companies (ex-Australia), hedged into Australian dollars.

The fund is up 191% over the last 12 months. 

At the time of writing, it is made up of 49 holdings, with its largest geographical exposure being to: 

• Canada (44.0%)
• United States (14.3%)
• South Africa (13.4%)

Global X Copper Miners ETF (ASX: WIRE)

This ASX ETF soared more than 7% higher yesterday. 

After yesterday’s surge, the fund is now up approximately 19% year to date and 112% over the last 12 months. 

According to Global X, it provides access to a global basket of copper miners which stand to benefit from being a key part of the value chain facilitating growth in major areas of innovation such as technology, infrastructure and clean energy.

It is currently made up of 39 Australian and international holdings all operating in the metals and mining sector.

Global X Semiconductor ETF (ASX: SEMI)

Another fund off to a hot start in 2026 is the Global X Semiconductor ETF. 

It has risen by more than 11% year to date and 54% over the last 12 months. 

According to Global X, it seeks to invest in companies that stand to potentially benefit from the broader adoption of tech-enabled devices that require semiconductors. 

This includes the development and manufacturing of semiconductors.

These companies are primarily located in United States (62.25%), Taiwan (11.85%) and Netherlands (11.75%).

The post 3 ASX ETFs off to a hot start in 2026 appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Bell 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.

I’m sure if investors had a time machine, they would go back to this time last year and buy DroneShield Ltd (ASX: DRO) shares.

Since then, this popular ASX defence stock has risen an incredible 575%.

But perhaps you don’t need a time machine after all. That’s because Bell Potter believes there is a small cap ASX defence stock which has the potential to deliver incredible returns over the next 12 months.

Though, it is a high risk, high reward play, which means it would only be suitable for investors with a high tolerance for risk.

Which ASX defence stock?

The stock that Bell Potter is tipping as a speculative buy is AML3D Ltd (ASX: AL3).

It is a $97 million welding, metallurgical science, robotics, and software business, which produces automated 3D printing systems that utilise wire additive manufacturing (WAM) technology to produce metal components and structures.

Bell Potter highlights that WAM is particularly useful for the printing of large scale complex industrial parts for the defence, oil & gas, and aerospace sectors.

What is the Bell Potter saying?

The broker highlights that there are growing demand signals from the UK and European defence sectors for AML3D’s offering, with its order book increasing strongly. It said:

AL3’s December 2025 quarterly report points to increased system orders in the US, emerging demand signals from the UK and European defence sectors and ongoing R&D in Australia to support the next generation of ARCEMY systems. AL3’s order book is now $16.5m, which includes $9m of orders on hand at the opening of FY26 plus more recently announced orders including $1.7m from FasTech (US contract printer), $4.5m from HII (Newport News Shipbuilding ordering two ARCEMY systems) and $1.2m from Austal (for a rapid deployment system).

Bell Potter also highlights that the ASX defence stock’s US expansion strategy is gathering momentum, adding:

AL3 continues to advance its US expansion strategy and while the key orders in this quarterly had previously been reported, the report highlights that the revenues are expected to be forthcoming in the current financial year. Delivery into the July 2025 US Navy LOI is yet to reach critical mass (only the HII order so far) and is the key opportunity for sales growth through HII and other defence sector prime contractors.

UK/Europe is also a key opportunity where system sales should commence and accelerate in the coming quarters. AL3’s sales model (upfront payments from customers) has again enabled maintenance of a strong balance sheet.

Big potential returns

According to the note, the broker has retained its speculative buy rating and 40 cents price target on the ASX defence stock.

Based on its current share price of 18 cents, this implies potential upside of 120% for investors over the next 12 months.

Commenting on its recommendation, Bell Potter concludes:

AL3’s technology is particularly suited to maritime applications, giving it strong leverage into demand growth from the US Navy’s Maritime Industrial Base and the US SHIPS Act. Over FY26-27, we expect AL3 to increase deployment of ARCEMY systems to the US and Europe, increase prototyping activity and ultimately commence commercial scale production of components.

There is potential for the Navy LOI to expand beyond the Maritime Industrial Base to land-based assets. AL3 will also look to deploy its technology into non-defence sector industrial manufacturing.

The post Is this ASX defence stock the next DroneShield? Broker tips 120% upside appeared first on The Motley Fool Australia.

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• DroneShield hits $200m milestone as 9.2m options vest and 2025 expense revealed

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 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.

Consumer staples stock Ricegrowers Ltd (ASX: SGLLV) has been gaining some serious momentum over the last year. 

Recent performance saw it added to the S&P/ASX 300 Index (ASX: XKO) during 2025. 

The company offers rice and related products. 

Business activities of the company are operated under Rice Pool, International Rice, Rice Food, Riviana, CopRice, and Corporate segments. 

The principal activities of the company and its entities consist of the purchase and storage of paddy rice, the milling, processing, manufacturing, procurement, distribution, and marketing of rice and related products, animal feed and nutrition products, groceries, and others.

Recent performance

This consumer staples stock closed trading yesterday at $16.17 per share. 

That’s a 53% increase over the past year. 

For context, the S&P/ASX 200 Consumer Staples Index (ASX: XSJ) is up just 0.82% over that same period. 

The consumer staples sector in general has been one of the poorest performing in the last year. 

This growth from Ricegrowers isn’t just exclusive to the last 12 months. 

According to Bell Potter, since transitioning its listing to the ASX in 2019, Ricegrowers has achieved compound revenue growth of +11% p.a., compound EBITDA growth of +17% p.a. and compound EPS growth of +15% p.a. 

Initiated coverage from Bell Potter

The team at Bell Potter has initiated coverage on this ASX consumer staples stock with a buy recommendation. 

The broker says it expects FY27e to be a year of earnings consolidation given the materially reduced NSW rice crop (to a 7-year low). 

Bell Potter also highlighted the 2030 targets from the company. 

At the heart of the strategy SGLLV has a stated aspirational targets of reaching $3.0Bn in revenues, improving profitability margins and delivering consistent paddy prices >$500/t to create a more stable rice pool in the Riverina (@~500kt). 

Central to the strategy is doubling the revenue base in ANZ, USA and the Middle East, continuing to develop the rice based snacking business and enhancing growth in the consumer and pet food portfolios.

Attractive valuation 

The team at Bell Potter said the current valuation is relatively attractive compared to similar businesses. 

The broker said parts of its rice business are comparable to dairy processors, its stockfeed operations are similar to other listed feed companies, and its cropping exposure is in line with agricultural peers. 

Even though grain processors usually trade at lower valuations than dairy or FMCG companies, SGLLV’s current valuation of about 8–9x future EBITDA looks cheap versus a more reasonable long-term blended valuation of around 10–11x.

Bell Potter currently has a price target of $18.75. 

This indicates a potential upside of almost 16% from yesterday’s closing price. 

The post Up 50% in 6 months, this ASX consumer staples stock is tipped to keep rising appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Bell 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 Ricegrowers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.