ASX bank shares make up an important part of many investors’ portfolios. Surprisingly, it is ANZ Group Holdings (ASX: ANZ) that has brought the best returns amongst the big four banks this year. 

Since the start of the year ANZ shares have risen more than 22%.

For context, the S&P/ASX 200 BANKS (ASX: XBK) is up 8.7% in the same period. 

Why the strong rise?

In January, ANZ shares were trading at roughly $28 and hit a yearly high in November of almost $39. 

That’s an increase of more than 35%. 

This was driven by strong business credit, real estate credit growth and investor mortgage growth. 

However since then, the share price has slid almost 10%. 

Analysts at Macquarie indicate this could be due to early signs of revenue underperformance. 

Is there any upside left for ANZ shares?

After such a strong year, investors may feel they have missed the boat on ANZ shares. 

Sentiment is seemingly mixed amongst experts. 

Yesterday, The Motley Fool’s Samantha Menzies reported that Macquarie has neutral rating on ANZ shares with a target price of $35

This indicates the share price is hovering close to fair value. 

However, Greg Burke, Equity Strategist at Wilsons Advisor/Canaccord Genuity said in November that ANZ shares are comfortably the ‘best value’ bank on all key valuation metrics, while offering the most attractive yield.

ANZ has reset its cost base lower and has a strong capital position. ANZ’s 2030 strategy offers a clear pathway to a structurally lower cost-to-income ratio, an improved ROE, and growth in dividends over time. Recent EPS revisions momentum is another relative appeal vs CBA and NAB.

The sentiment out of the Canaccord Genuity Group last month was that outside of CBA shares, valuations in ASX bank shares are more reasonable. 

When excluding index heavyweight CBA, valuations are more reasonable – especially relative to a fully priced ASX 200. 

On average, the Big 4 ex-CBA trade at a modest discount to the market and sit within their historical relative P/E range (vs the ASX 200), albeit towards the upper end. This suggests bank sector valuations are elevated, but not extreme, outside of CBA.

How have the other big four banks performed?

After a bull run to start the year, Commonwealth Bank of Australia (ASX: CBA) shares have cooled off considerably. 

Australia’s largest bank is now relatively flat across 2025, up just 1.2%. 

National Australia Bank Limited (ASX: NAB) has performed better than CBA, rising approximately 9% since the start of the year. 

The second best performing big four bank share this year has been Westpac Banking Corporation (ASX: WBC). 

Westpac shares have risen 18%. 

The post Up 22% in a year! The red-hot ANZ share price is smashing CBA, Westpac and NAB shares appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Bell has positions in National Australia Bank. 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 L1 Long Short Fund Ltd (ASX: LSF) is one of the most successful ASX stocks on the Australian share market.

Since duplicating its managed fund into a listed investment company (LIC) back in 2018, this LIC’s portfolio has generated an average return of 12.7% per annum. That stretches to 23.1% per annum over the past five years.

Now, the L1 Long Short Fund is primarily an Australia-focused investment, with ASX stocks making up at least 70% of the fund at any given moment. It is a rather unusual LIC in that it uses a long-short strategy. This involves traditional investing in other shares in hopes of future returns (long investing). But also short-selling companies that it thinks are in for rough times ahead.

This long-short strategy has clearly been effective at generating returns for its investors on the Australian market. But L1 Capital has just launched a new ASX fund that it hopes can replicate the success of its ASX-focused cousin on the international stage.

ASX veterans might find a bell ringing when we mention Platinum Asset Management. Platinum used to be one of the ASX’s most sought-after stock pickers. But a recent run of underperformance has left it struggling. As a consequence, Platinum Asset Management’s Platinum Capital Ltd listed investment company was approached by L1 Capital with a takeover offer. The offer was accepted, and, earlier this month, was merged into a new LIC that will take L1’s long-short strategy to global markets.

That LIC is now known as L1 Global Long Short Fund Ltd (ASX: GLS), and it might be worth a closer look.

An ASX stock that has banked 70% since January?

We’ve already touched on the ASX-focused L1 Long Short Fund’s previous success. Even though the L1 Global Long Short Fund has only been on the ASX in its new form for a few days, stock investors have a preview of its potential success.

In a merger presentation, L1 fund managers Raphael Lamm and Mark Landau seeded an initial version of what has now become the L1 Global Long Short Fund back in January in a trial run of sorts. Between 1 January and 31 October, that trial run returned a whopping 67.5%. 

Past performance is never a guarantee of future success, of course. But no one can deny that this new ASX stock is off to a flying start.

Some of the long positions that can currently be found in the L1 Global Long Short Fund’s portfolio include Alcoa, ING and Zillow. Meanwhile, the fund has shorted US electric car maker Lucid Motors.

L1 will have to keep up its outperformance for new investors to get bang for their buck, though. After an initial grace period, this new ASX stock will charge a management fee of 1.4% per annum. That’s in addition to a performance fee.

The post This new ASX stock has returned 70% since January appeared first on The Motley Fool Australia.

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• Is Sigma Healthcare share a healthy buy, after hitting new lows?
• 5 things to watch on the ASX 200 on Tuesday
• Up 22% in a year! The red-hot ANZ share price is smashing CBA, Westpac and NAB shares
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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Zillow 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.

The ASX dividend share Elders Ltd (ASX: ELD) has seen a sizeable valuation decline since 2022, as the chart below shows. This could be a buying opportunity, in my view.

The agricultural business has operations across a wide variety of areas, including farming sector retail products, wholesale products, livestock and wool agency services, storage and handling of wool, feed lots for cattle, real estate sales agency and property management services, financial services (including insurance), digital and technical services (including investments in AuctionsPlus and the Clear Grain Exchange online trading platforms), and own-brand agricultural chemicals and animal health products.

In summary, it’s heavily involved in Australia’s agricultural sector and associated services.

Following the decline of the Elders share price, it could now offer a very large dividend yield for investors by FY27.

Passive income projections

Payouts are decided based on how much profit a company generates as well as how generous the board of directors is feeling.

According to the projection on CMC Markets, the business is forecast to increase its annual payout per share to 36.5 cents. Following that, the ASX dividend share could grow its dividend to 39.5 cents per share in the 2027 financial year.

Using the valuation at the time of writing, this translates into a potential grossed-up yield of 8% including franking credits or 5.6% excluding the franking credits.

Let’s take a look at why now could be a good time to invest in the agricultural business.

Strong outlook for the ASX dividend share?

The earnings per share (EPS) forecasts on CMC Markets suggest the business could deliver 58.2 cents of EPS in FY26 and then 63 cents of EPS in FY27. Based on those projections, the Elders share price is valued at just 11x FY27’s estimated earnings.

When Elders announced its FY25 result, it gave some comments regarding FY26:

Elders is optimistic about the outlook for FY26, supported by a forecast recovery from dry conditions in South Australia and Victoria, as well as the commencement of benefits following implementation of our new retail system. In addition, we welcome Delta Agribusiness to Elders, expanding our Rural Products business in FY26.

The outlook and fundamentals for Australian livestock remain sound with prices for sheep and cattle forecast to be supported by strong international demand against a backdrop of tightening supply, especially from regions recovering from drought. The outlook for the regional residential property market remains positive, benefitting from stabilisation of interest rates at lower levels.

Elders will continue to invest in strategic initiatives, in line with its Eight Point Plan, while maintaining a focus on cost and capital efficiency.

With that in mind, I think the ASX dividend share could be a good under-the-radar buy for long-term investors.

The post This ASX dividend share is projected to pay an 8% yield by 2027 appeared first on The Motley Fool Australia.

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

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

Let’s turn the calendar back six months to early June. 

Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) was down over 10% year to date, while the S&P 500 had recovered from the tariff-induced sell-off in April and was roughly flat on the year.

Fast-forward to today, and Alphabet is up 67% year to date, has more than doubled off of its 52-week low, and surpassed Microsoft to become the third-most valuable company in the world behind Nvidia and Apple. In 2025, Alphabet is by far the best-performing “Magnificent Seven” stock, with Nvidia in a distant second place with a 35.1% year-to-date gain.

Here’s why Alphabet’s rise wasn’t a fluke, how you can identify Alphabet-like stocks before they pop, and why Alphabet has room to run in 2026. 

Alphabet was epically mispriced

Finance classes will teach you theories such as the efficient market hypothesis, which essentially posits that asset prices are accurately determined based on available information. In practical application, the hypothesis attributes outsize gains to taking on outsize risks — effectively discrediting the finding of true value independent of risk in the market.

Alphabet is a prime example of why the hypothesis is incorrect.

Earlier this year, Alphabet got so cheap that it traded at a discount to the S&P 500. It was the least expensive Magnificent Seven stock, despite the company generating substantial free cash flow, achieving steady high-margin growth, repurchasing a significant amount of stock, paying dividends, and maintaining a solid balance sheet.

Simply put, Wall Street failed to price in Alphabet’s growth potential and labeled it as an artificial intelligence (AI) loser. That assumption couldn’t be further from the truth.

From laggard to leader

Alphabet has a massively diversified business, spanning Google Search, Google Cloud, YouTube, Android, Google services like Gmail and Google Drive, “other bets” like Waymo and Google Fiber, research and development arm Google DeepMind, and more. But despite all these moving parts, Alphabet still depends on Google Search for over half of its revenue and the majority of its operating income.

Large language models (LLMs) present the greatest threat to Google Search in its history. And for a while, there were fears that tools like OpenAI, Claude, Copilot, DeepSeek, Grok, and others would slowly erode Alphabet’s once-dominant share of the search market. If queries shifted from web-based text links to conversational, that would disrupt the very fabric of Google Search’s identity.

Instead of sitting on its hands and letting the LLM wave weather its once-impenetrable moat, Alphabet integrated its model, Gemini, into Google Search, as well as a stand-alone app. Rather than reinvent the wheel, Alphabet essentially upgraded Chrome with AI features, making it more powerful and providing an incentive for users to stay on the platform instead of switching to a different tool entirely.

The strategy worked. Google Search continues to grow despite upgrades from rival LLMs. Alphabet is generating all-time-high earnings and investing heavily in long-term projects, including the expansion of Google Cloud infrastructure. Alphabet is thriving and is far from being a legacy tech giant, with its best days in the rearview mirror. And yet just six months ago, the market was pricing Alphabet like a washed-up relic.

Engagement continues to rise on Gemini — with the app surpassing 650 million monthly active users.

As an added vote of confidence, Berkshire Hathaway announced a stake in Alphabet — marking a stark contrast from quarter after quarter of trimming its Apple position — indicating Warren Buffett and his team perceive Alphabet as a good value.

Meta Platforms is considering purchasing Alphabet’s Tensor Processing Unit (TPU) chips, which Alphabet developed with Broadcom. Custom-made TPUs are a cost-effective solution for data centers, offering a more affordable alternative in certain applications than graphics processing units, such as those manufactured by Nvidia or Advanced Micro Devices.

Flipping the script

Alphabet’s investment thesis has evolved, but the bigger change impacting its stock price is perception. Now, the market views Alphabet as a leader in search through its reimagined Chrome and Gemini. Google’s TPUs are recognized as a leading method for training AI models, opening a new revenue stream for Alphabet by selling TPUs to hyperscalers.

Alphabet is a textbook example of the upside potential that comes with investing in dirt cheap growth stocks rather than simply betting big on red-hot highfliers. When growth expectations are virtually nonexistent, a company doesn’t have to do much to garner a favorable response from Wall Street.

If we examine Alphabet’s timeline over the last six or so months, I would say that a significant change occurred in late summer and fall, when Alphabet began to be recognized as a major player in AI rather than a laggard. The recent run-up over the last few weeks is attributed to a positive response to Gemini 3, which was announced in mid-November, and news that Meta was interested in buying TPU chips.

These announcements are undoubtedly great news for Alphabet investors, but they didn’t emerge from nowhere. Alphabet’s Google Search and Gemini results have been exceptional for several quarters. Alphabet and Broadcom’s seventh-generation TPU is 30 times more powerful than the first cloud TPU from 2018. But still, the partnership has been going on for a while now.

Alphabet remains a solid buy now

Alphabet has room to run in 2026 because its valuation is still reasonable at 30 times forward earnings. With multiple levers to pull to grow earnings, Alphabet is a balanced buy now. But it isn’t the dirt cheap value stock it used to be. Now, Alphabet is at a similar valuation to peers like Microsoft and Amazon, and more expensive than Meta Platforms.

All told, Alphabet is a great example of why there’s a lot of money to be made in the stock market if you can find quality companies that are mispriced because fears are overshadowing fundamentals and growth potential.

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

The post Here’s why Alphabet is the best-performing “Magnificent Seven” stock in 2025 (and why it has room to run in 2026) appeared first on The Motley Fool Australia.

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

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

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Daniel Foelber has positions in Nvidia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Advanced Micro Devices, Alphabet, Amazon, Apple, Berkshire Hathaway, Meta Platforms, Microsoft, and Nvidia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Broadcom and has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has recommended Advanced Micro Devices, Alphabet, Amazon, Apple, Berkshire Hathaway, 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.

It’s no surprise to me that the best Australian stocks are able to outperform the ASX share market. Quality is appealing for a reason.

Investing in great businesses seems like a winning formula, in my opinion. They can continue re-investing the generated profit into great opportunities inside their existing operations which are already performing well.

Following recent share price declines, I believe both of the Australian stocks below are compelling investments that I’d happily put $10,000 into today.

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

This investment conglomerate has been demonstrating its quality for a number of decades and it remains a leading example of how to manage a business for the long-term.

The Australian stock has built an impressive portfolio of assets across a number of industries, including building products, industrial properties, resources, telecommunications, swimming pools, electrification, farming, water entitlements, financial services, credit, healthcare and plenty more.

The business has designed its portfolio to be defensive and generate strong cash flow in all economic conditions for shareholders. This makes it likely the business can continue growing the cash flow its portfolio generates, which is a key statistic of focus, as it invests in additional opportunities.

The Soul Patts share price has dropped close to 20% since 10 September 2025, making it a lot cheaper to grab a piece of this excellent business.

I’m confident the company has a compelling future ahead because of how it can adjust its portfolio when it sees new opportunities arise. Additionally, it can sell assets if it’s no longer optimistic about an investment.

I think this business is likely to be around in another 20, 30 and 50 years thanks to its investment flexibility, while delivering a solid dividend along the way.

Pro Medicus Ltd (ASX: PME)

Pro Medicus describes itself as a leading healthcare informatics company, which provides a full range of medical imaging software and services to hospitals, imaging centres and healthcare groups around the world.

The business aims to provide an end-to-end offering in healthcare imaging across radiology information systems (RIS), picture archiving and communication systems (PACS), AI and e-health solutions.

Pro Medicus’ software is clearly resonating with customers, with the number of large new contracts it’s winning, as well as add-on modules.

For example, at the start of December, the company announced a seven-year, $25 million contract to add another module for Baycare, which is one of Pro Medicus’ largest existing contracts.

The Australian stock has rapidly ramped up its revenue – in FY25 alone, revenue climbed 31.9% to $213 million, while net profit after tax (NPAT) surged 39.2% to $115.2 million.

While revenue growth is strong, the company’s underlying operating profit (EBIT) margin is an extremely high 74% – that’s one of the highest on the ASX. Such a high EBIT margin means most of the revenue translates into profit for the company.

The Pro Medicus share price has dropped more than 20% since September, making its forward price/earnings (P/E) ratio seem more reasonable. It’s now trading at 99x FY28’s estimated earnings, according to the projection on Commsec at the time of writing.

The post 2 strong Australian stocks to buy now with $10,000 appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in Pro Medicus and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Pro Medicus. The Motley Fool Australia has positions in and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Pro Medicus. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.