Motley Fool Australia Chief Investment Officer Scott Phillips joined Jane Goldsmith for Nine’s Late News on Monday night to unpack the latest business news, including the average Australian wage now over $100k, worries for inflation, Endeavour Group Ltd (ASX: EDV) sales slow, and two e-commerce retailers turn a profit corner. 

The post Average wage tops $100k, worries for inflation, e-commerce flies: Scott Phillips on Nine’s Late News appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Brokers say these ASX dividend shares are buys
• 5 things to watch on the ASX 200 on Tuesday
• Endeavour share price drops on half-year profit weakness
• 5 things to watch on the ASX 200 on Monday

Motley Fool contributor Scott Phillips has positions in Adairs, Adore Beauty Group, and Kogan.com. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Adairs, Kogan.com, and Lovisa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Adore Beauty Group. The Motley Fool Australia has positions in and has recommended Adairs. The Motley Fool Australia has recommended Adore Beauty Group, Kogan.com, and Lovisa. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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It has been another busy day of earnings releases on Wednesday.

Some results have gone down well with investors, others have not.

For example, listed below are two ASX 300 shares that are being sold off following the release of their respective releases.

Here’s what they reported:

Australian Clinical Labs Ltd (ASX: ACL)

The Australian Clinical share price is down 10% to $2.35. This morning, the pathology services company reported a 6.4% decline in revenue to $337.3 million and an 80.5% reduction in profit to $5 million.

This was driven by lower COVID-related earnings and a challenging macro environment. The good news is that management believes things will be better in the second half. It said:

1H FY24 characterised by continued challenging macro environment with reduced referrer availability, increase in GP private billing and hospital challenges. Government initiatives introduced in November 2023 expected to start having a positive impact on 2H

Kelsian Group Ltd (ASX: KLS)

The Kelsian share price is down 12% to $5.79. This follows the release of the travel and transport company’s half-year results.

Kelsian, formerly known as Sealink, reported a 44.9% increase in revenue to $982.7 million. But due to weaker margins, it only achieved a 20.4% lift in underlying net profit after tax and before amortisation (NPATA) to $43.1 million.

The ASX 300 share’s management notes that “inclement weather in the all-important month of December, as well as a softening in demand for domestic travel in December did impact the result.”

Nevertheless, it appears positive on its outlook due to its significant growth opportunities. It said:

The Company is well placed to continue to deliver growth underpinned by economies of scale, efficiencies, and global procurement opportunities. Over the longer term the list of growth opportunities is significant, with many markets around the world liberalising and welcoming operational experts to support their decarbonisation agendas.

The post 2 ASX 300 shares crashing up to 12% on earnings updates appeared first on The Motley Fool Australia.

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More reading

• Why Flight Centre, Fortescue, Kelsian, and Neuren shares are dropping today
• 2 ASX healthcare shares with ‘compelling’ valuations to buy
• 3 ‘attractive’ small-cap ASX shares ready to rocket in 2024

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has 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.

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Three S&P/ASX 200 Index (ASX: XJO) shares just scored significant broker upgrades.

The analysts’ bullish assessments for these companies, including share price gains of up to 13%, follow on the release of yesterday’s earnings results.

So, without further ado, here are the three stocks with some sizeable potential gains ahead.

(Broker data courtesy of The Australian.)

Why these ASX 200 shares could surge in 2024

The first ASX 200 share earning a broker upgrade is medical device developer Polynovo Ltd (ASX: PNV).

For its half-year results (1H FY 2024) Polynovo reported a 54.9% year on year increase in sales to $42.2 million. That represents a new half-year record for the healthcare stock.

Meanwhile, revenue soared 65.6% from 1H FY 2023 to $48.8 million. And net profit after tax (NPAT) came in at $2.7 million, up from a loss of $3.8 million.

The Polynovo share price closed down 1.7% yesterday. But investor sentiment has turned sharply bullish today, with Polynovo shares up 9.3% in afternoon trade at $2.17.

Wilsons sees further upside potential even after that big boost. The broker raised Polynovo to an overweight rating with a $2.44 price target. That represents a potential 12% gain from current levels.

Which brings us to the second ASX 200 share receiving a broker upgrade, plumbing parts company Reece Ltd (ASX: REH).

Reece also reported its half-year results yesterday.

Among the highlights was an 8% year on year increase in adjusted earnings before interest, tax, depreciation and amortisation (EBITDA), which came in at $526 million. The company’s adjusted net profit after tax (NPAT) was up 6% to $224 million.

And passive income investors were treated to a fully franked interim dividend of 8 cents per share, in line with last year.

The Reece share price gained a whopping 18.3% yesterday. With some likely profit-taking going on shares are down 4.0% today, trading for $27.37 apiece.

Citi believes that it’s undervalued. The broker raised Reece to a neutral rating with a $28.90 price target, 5.6% above current levels.

Australian oil and gas giant tipped to outperform

Rounding out the list of ASX 200 shares receiving broker upgrades following their earnings results is oil and gas giant Woodside Energy Group Ltd (ASX: WDS).

Woodside reported its full 2023 results yesterday.

With the prices it receives for oil and gas both coming down sharply from 2022, so did Woodside’s revenues. Operating revenue of US$13.99 billion declined 17% year on year.

Underlying NPAT of US$3.32 billion was down 37% from the prior year. This saw the final, fully franked dividend cut by 58% to 60 US cents per share.

Still, those are some strong profit and revenue figures, with Woodside also reporting free cash flow of US$560 million. And the ASX energy giant still trades on a fully franked yield of 7.2%.

Woodside shares gained 0.9% yesterday and are down 0.5% today, trading for $30.15 apiece.

And Morgan Stanley sees some sizeable upside potential for the ASX 200 share from here.

The broker upgraded Woodside shares to an overweight rating with a $34 price target. That’s almost 13% above the current share price.

The post 3 ASX 200 shares just scored significant broker upgrades. Here’s how appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Wednesday
• Here are the top 10 ASX 200 shares today
• Here’s everything you need to know about the Woodside dividend
• 2 popular ASX 200 healthcare shares tanking on earnings updates
• Reece share price jumps 13% on stronger than expected half-year profits

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 PolyNovo. 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.

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The ASX dividend stock Charter Hall Long WALE REIT (ASX: CLW) is a strong option for passive income because of the large distributions it sends to shareholders every year.

The real estate investment trust (REIT) owns a variety of properties including industrial and logistics, convenience retail (service stations), high-quality retail, retail, social infrastructure, agri-logistics, Bunnings properties and so on.

Why it’s a good option for passive income

First, it is paying a large distribution yield. It’s achieving this partly by paying all of its rental profit to investors each year.

According to Commsec, the business is predicted to pay a distribution per unit of 26 cents in FY24. That translates into a forward distribution yield of 7.1%.

When the REIT reported its FY24 first-half result it said that its portfolio weighted average lease expiry (WALE) was 10.8 years. The WALE provides income security for investors according to Charter Hall Long WALE REIT, helping the passive income.

It also said that 99% of its portfolio’s tenants are blue-chip, meaning they’re the government, ASX-listed, multinationals or national tenants.

It’s challenging to know what’s going to happen with its costs (mainly due to interest rates) in the medium term, but the ASX dividend stock’s rental income is seeing annual growth. Charter Hall Long WALE REIT said 52% of leases are linked to CPI, with a 5.4% weighted average increase of CPI-linked leases in FY24, while 48% of leases are fixed, with an average fixed increase of 3.1%.

$3,100 of annual passive income

Owning enough Charter Hall Long WALE REIT units can mean getting $3,100 of annual investment income.

If we have 11,923 units, it’s projected to pay $3,100 of annual passive income in FY24. The same number of units could pay $3,219 in FY25 because of the projected 27 cents payment per unit, according to Commsec .

At the current Charter Hall Long WALE REIT share price, that would be a cost of $43,519 thanks to the strong distribution yield.

If the rental income can grow faster than interest costs in the next couple of years, then the distribution could keep increasing from the ASX dividend stock.

At the moment, it’s one of my preferred long-term REIT ideas because of its long WALE, rental income growth and good yield.

The post Buy 11,923 shares of this super ASX dividend stock for $3,100 per year in passive income appeared first on The Motley Fool Australia.

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More reading

• 2 ASX 200 shares making big moves on strong earnings
• 1 ASX dividend giant I’d buy before ANZ shares for February onwards

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.

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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record a small decline. At the time of writing, the benchmark index is down 0.1% to 7,654.3 points.

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

Flight Centre Travel Group Ltd (ASX: FLT)

The Flight Centre share price is down 7% to $20.14. This follows the release of the travel agent’s half-year results. Flight Centre reported a 15% increase in total transaction value to $11.3 billion and a 565% jump in underlying profit before tax to $106 million. As strong as this was, it was still short of consensus estimates.

Fortescue Ltd (ASX: FMG)

The Fortescue share price is down almost 3.5% to $26.60. This has been driven by the mining giant’s shares going ex-dividend this morning for its latest payout. Eligible shareholders can now look forward to being paid its fully franked $1.08 per share dividend next month on 27 March.

Kelsian Group Ltd (ASX: KLS)

The Kelsian share price is down 13% to $5.75. This morning, Kelsian, formerly known as Sealink, released its half-year results. It reported a 44.9% increase in revenue to $982.7 million. However, due to weaker margins, it only achieved a 20.4% lift in underlying net profit after tax and before amortisation (NPATA) to $43.1 million.

Neuren Pharmaceuticals Ltd (ASX: NEU)

The Neuren share price is down 13% to $18.73. This has been driven by the release of sales data for its Daybue product. Its partner Acadia Pharmaceuticals (NASDAQ: ACAD) announced fourth quarter Daybue net sales in the United States of US$87.1 million. It also provided 2024 guidance for sales of between US$370 million and US$420 million. This appears to be short of the market’s expectations.

The post Why Flight Centre, Fortescue, Kelsian, and Neuren shares are dropping today appeared first on The Motley Fool Australia.

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More reading

• Why is this ASX 200 pharmaceuticals stock crashing 15% today?
• How is the Fortescue share price down 3% today?
• Flight Centre shares plunge 7% despite return of the interim dividend
• Flight Centre share price on watch amid 565% half-year profit surge
• 5 things to watch on the ASX 200 on Wednesday

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

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The S&P/ASX 200 Index (ASX: XJO) is having a fairly depressed kind of day so far this Wednesday. At the time of writing, the ASX 200 has slipped by around 0.15%. But ASX 200 lithium shares like Liontown Resources Ltd (ASX: LTR) are having a very different experience.

Liontown shares are on fire today. This lithium stock is currently up a whopping 7.97% at $1.25 a share.

But these gains aren’t just confined to the Liontown share price. The ASX’s largest lithium stock, Pilbara Minerals Ltd (ASX: PLS), is experiencing something similar, with Pilbara shares up 5.54% so far today at $4.10 each.

Sayona Mining Ltd (ASX: SYA) stock has risen 7.7%, while Arcadium Lithium plc (ASX: LTM) shares have increased by 4.43% at present.

So something is clearly in the water with lithium shares today.

Why are ASX 200 lithium shares like Liontown surging today?

Unfortunately, it’s not really clear what that something in the water actually is. There’s been no major ASX news out today from any of the big lithium stocks.

Looking at the US markets might provide some explanation, though.

Last night during US trading, we saw the share price of Albemarle Corporation (NYSE: ALB) rise significantly. Albemarle, a US$15 billion lithium giant, experienced a 5.82% surge in value last night, with the shares rising from US$121.52 up to US$128.59.

This was potentially a result of a major US broker in Mizuho raising its share price target from US$105 to US$115.

As one of the largest lithium stocks in the world, Albemarle shares often set the tone for what happens with the ASX’s lithium players.

So that’s one possible explanation for this bullishness we are seeing with Liontown shares and the like.

Another factor we can potentially point to is a growing sense that lithium prices may have found a bottom. ASX lithium shares like Liontown have been smashed in recent months as global lithium prices have plummeted. We saw this quantified in the recent ASX earnings reports from Pilbara Minerals and other lithium shares.

Have lithium prices found a bottom?

Sam Berridge, portfolio manager and resources specialist at Perennial Funds Management, recently told the Australian Financial Review (AFR) that “We are at the bottom… The big question is how long will [lithium] prices go sideways, and that depends on demand, rather than supply”.

The same report quoted Ben Cleary of Tribeca Investment Partners, who said:

I don’t expect [lithium spodumene] prices to bounce back towards where they were [around $US8,000 per tonne)… But I am comfortable that we could see long-term prices around $US1,200 which would still give Australian producers $US600 a tonne on a 50 per cent operating margin.

Of course, we also can’t discount a simple reversion to mean for ASX lithium shares. Before this week, the Liontown share price, as well as that of Pilbara Minerals and other ASX lithium shares, were exploring multi-year lows. It’s also possible that some investors are thinking that it’s time to start buying back in at these historically low share prices.

Whatever the cause of today’s strong bounce in lithium stocks, it will no doubt be welcomed by investors.

The post Why are ASX lithium shares like Liontown having such a bumper session today? appeared first on The Motley Fool Australia.

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More reading

• Should you buy Pilbara Minerals shares today?
• These are the 10 most shorted ASX shares
• Top brokers name 3 ASX shares to buy next week
• Why ASX 200 investors remain upbeat on Pilbara Minerals shares
• Brokers name 3 ASX shares to buy now

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.

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The All Ordinaries Index (ASX: XAO) is up a slender 0.2% since last Friday’s close despite some very heavy lifting from this ASX All Ords stock.

Shares in the boron and lithium miner closed on Friday trading for 16.5 cents apiece. At time of writing in afternoon trade on Wednesday, less than three full trading days later, shares are swapping hands for 31 cents apiece.

That puts this ASX All Ords stock up an eye-popping 87.9% so far this week.

Any guesses?

If you said 5E Advanced Materials Inc (ASX: 5EA), give yourself a virtual gold star.

Here’s what’s been spurring investor interest.

What’s sending the ASX All Ords stock rocketing?

The 5E Advanced Materials share price gained 6.6% on Monday after the miner released an operational update, marked as non-price sensitive.

Shares closed up another 28.6% yesterday and the All Ords stock is rocketing 37.8% higher today.

The mining operations update involves the company’s 5E Boron Americas Complex, for which it has a United States government Critical Infrastructure designation. And investor enthusiasm appears to have been piqued as the project moves closer to initial production.

Among recent progress, 5E Advanced Materials commenced mining operations last month.

The company said all four of its production wells to extract boric acid and lithium have been successfully running. Initial head grade and recovery rates were reported to be in line with historical expectations, with the wells continuing to be conditioned to achieve their final operational profile.

With final electrical engineering work at the facility now nearly completed, management expects to begin operating the plant commercially in the second quarter of 2024. If this occurs to plan, that could offer ongoing support for the ASX All Ords stock.

“This is an exciting time for all stakeholders of the company as we finalise a number of initiatives that will see us commence initial production next quarter,” 5E Advanced Materials CEO Susan Brennan said.

Brennan added:

Our operations team is working diligently to transition our facility to operational status, and we are concurrently ramping up our commercial and marketing activities in order to leverage the value of our boron and lithium with potential customers.

I cannot emphasise enough the importance 5E will represent in the US in the coming months as a new and secure producer of critical materials needed for clean energy economies.

5E Advanced Materials share price snapshot

Despite the 88% boost to the 5E Materials share price this week, the ASX All Ords stock has a way to go before recouping the past months of losses.

Shares remain down 70% over 12 months.

The post This ASX All Ords stock just surged 88% in less than 3 days! Any guesses? appeared first on The Motley Fool Australia.

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More reading

• Why is the Chalice Mining share price rocketing 20% today?
• $20,000 in savings? Here’s how I’d aim for $20,000 in passive income
• Corporate earnings, CPI and retail sales on the agenda: Scott Phillips on Nine’s Late News
• Why the Coles share price could keep rising after the result
• Why is this ASX 200 pharmaceuticals stock crashing 15% today?

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.

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The Chalice Mining Ltd (ASX: CHN) share price is having a stunning session on Wednesday.

In afternoon trade, the mineral exploration company’s shares are up 20% to $1.22.

Why is the Chalice Mining share price jumping?

Investors have been scrambling to buy the company’s shares today despite there being any news out of it.

Though, it is worth noting that Chalice Mining released a presentation yesterday ahead of its appearance at the BMO Global Metals & Mining Conference.

This presentation highlighted its 100% ownership of the Gonneville project. It is the largest undeveloped palladium resource and one of the largest critical minerals discoveries in the western world.

Speaking of palladium, the price of the metal has recently started to rebound after falling heavily over the last couple of years.

And while it is still a long way from its February 2022 levels, investors may believe that this recent recovery means that a bottom has finally been reached.

What else?

It’s possible that we are witnessing a short squeeze on Wednesday.

A short squeeze is what happens when short sellers scramble to buy shares so they can close their positions.

Demand can get so strong on the buy side that it drives a share price higher and higher. This in turn can lead to other short sellers trying to close positions in a hurry, driving a share price even higher.

As per our more recent update on short selling data, the company had short interest of 9%. This means that 9% of its shares outstanding were in the hands of short sellers.

And while they may be getting burned today, they aren’t likely to be overly concerned. The Chalice Mining share price remains down 80% over the last 12 months.

The post Why is the Chalice Mining share price rocketing 20% today? appeared first on The Motley Fool Australia.

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More reading

• These are the 10 most shorted ASX shares
• These are the 10 most shorted ASX shares
• Here are the top 10 ASX 200 shares today
• These are the 10 most shorted ASX shares
• Here are the top 10 ASX 200 shares today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has 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.

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Earning $20,000 in annual passive income from $20,000 in savings may seem out of reach for many ASX investors.

But by investing in the right basket of ASX dividend shares, and importantly reinvesting those dividends, it’s a lot easier than you might think.

Now it obviously won’t happen overnight. Not unless you know of some ASX shares paying a 100% yield. (If so, drop us a line!)

But with a diversified, high-yielding ASX portfolio, and tapping into the magic of compounding, a little patience should pay off handsomely.

Here’s how I’d go about it.

Targeting ASX shares for $20,000 in passive income

Over the past three years the S&P/ASX 200 Gross Total Return Index (ASX: XJT) – which includes all cash dividends reinvested on the ex-dividend date – has gained 30%.

To give you an idea of the importance of dividends and reinvesting those payouts to turbocharge your gains over time, the S&P/ASX 200 Index (ASX: XJO) is only up 15% over that same period.

So by reinvesting my dividends, and with history as my guide, I can comfortably aim for a long-term 10% annual return to build up my passive income stream.

Within the dividend-paying ASX shares, I’d preference companies paying fully franked dividends. That should see me hold onto more of my second income at tax time. (Though we’ll stick to the 10% annual returns for the purposes of this article to keep things simple and relatively conservative.)

Now I’d spread my $20,000 across at least five different ASX dividend shares operating across different sectors and ideally in various geographic locations. That kind of diversification will reduce the risk of my passive income taking a big hit if a particular company or sector comes under unexpected pressure.

Now, let’s crunch some numbers.

To the maths!

Turning to my trusty compound interest calculator, if I invest $20,000 in ASX shares today at 10% annual returns, I’d have $66,073 in 12 years. If I didn’t want to touch my capital (I don’t), then that would yield me $6,607 a year in annual passive income.

So, we’ve got a ways to go before reaching $20,000 a year. Though not as long as you may think.

With compounding working for us, just 12 years later (or 24 years from my initial $20,000 investment in ASX shares) I’d expect to be sitting on a portfolio worth $218,282.

That should allow me to take out $21,828 a year in passive income without drawing down on that investment capital.

The post $20,000 in savings? Here’s how I’d aim for $20,000 in passive income appeared first on The Motley Fool Australia.

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More reading

• Corporate earnings, CPI and retail sales on the agenda: Scott Phillips on Nine’s Late News
• Why the Coles share price could keep rising after the result
• Why is this ASX 200 pharmaceuticals stock crashing 15% today?
• DroneShield share price flying 13% on first profitable year
• How is the Fortescue share price down 3% today?

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.

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Motley Fool Australia chief investment officer Scott Phillips joined Peter Overton for Nine’s Late News on Sunday night to unpack the latest business news, including modest growth in ASX-listed corporate earnings, a look at inflation due out later in the week, and the potential for retail sales to bounce back after a poor December.  

The post Corporate earnings, CPI and retail sales on the agenda: Scott Phillips on Nine’s Late News appeared first on The Motley Fool Australia.

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Motley Fool contributor Scott Phillips 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.

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