The Commonwealth Bank of Australia (ASX: CBA) share price will be on watch today.

That’s because the banking giant has just released its half-year results and delivered a cash profit slightly ahead of expectations.

CBA share price on watch following half-year results

For the six months ended 31 December, Australia’s largest bank reported the following compared to the prior corresponding period:

• Operating income up 0.2% to $13,649 million
• Operating expenses up 4% to $6,011 million
• Cash net profit after tax down 3% to $5,019 million
• Fully franked interim dividend up 2.4% to $2.15 per share

What happened during the half?

CBA’s operating income was up slightly to $13,649 million during the first half. This was supported by volume growth and higher volume-based fee income, offset by margin compression.

Speaking of which, the bank’s net interest margin has fallen 6 basis points since the end of FY 2023 to 1.99%. This reflects increased deposit price competition and deposit switching.

Also heading in the wrong direction were the bank’s expenses. CBA’s operating expenses increased 4% to $6,011 million due to inflationary pressures and additional spending on technology to support the delivery of strategic priorities.

This ultimately led to CBA’s cash net profit after tax falling 3% to $5,019 million. Statutory net profit after tax was down by 8% to $4,837 million.

Nevertheless, this didn’t stop the CBA board from lifting its fully franked interim dividend by 2.4% to $2.15 per share. This represents a payout ratio of 72%, which is up from 68% a year earlier.

CBA ended the period with a CET1 ratio of 12.3%.

How does this compare to expectations?

The good news for the CBA share price is that this result appears to have come in slightly ahead of expectations.

The market consensus estimate was for a first half cash profit of $4,972 million.

Outlook

CBA’s CEO, Matt Comyn, commented that 2023 was a challenging year and warned that there could be some tough times ahead. He said:

2023 was increasingly challenging for many of our customers who are finding it harder to absorb cost of living pressures. The economy has been fairly resilient, supported by a strong labour market, savings and repayment buffers, population growth and relatively high commodity prices. However, downside risks are building as slowing demand and persistent inflation impact Australian businesses. Ongoing geopolitical tensions also create uncertainty.

As cash rate increases have a lagged impact on households and business customers, we expect financial strain to continue in 2024, with an uptick in our arrears and impairments. We remain well provisioned and capitalised, with capacity to navigate an uncertain economic environment.

The CBA share price is up 6% over the last 12 months.

The post CBA share price on watch following $5b cash profit and dividend boost appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Wednesday
• Why the CBA dividend fountain will be in focus this week
• 3 top ASX bank shares hit 52-week highs today: Is there still value to be found?
• CBA could be eyeing record profits if first-half results echo the past
• Which Big Four ASX bank share will pay the biggest dividend this year?

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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If you’re wanting to give your portfolio a boost with some exchange traded funds (ETFs), then it could be worth checking out these three named below.

Smart investors have these in their portfolios and have reaped the rewards over the last five years. Here’s what you need to know about them:

BetaShares NASDAQ 100 ETF (ASX: NDQ)

The first ASX ETF to look at is the BetaShares NASDAQ 100 ETF.

This hugely popular fund provides investors with access to 100 of the best companies the world has to offer. These are the giants of Wall Street’s Nasdaq index and include the likes of Apple, Microsoft, and Tesla.

Over the last five years, the index it tracks has delivered an average return of 23% per annum.

VanEck Vectors Morningstar Wide Moat ETF (ASX: MOAT)

Another popular ASX ETF that has delivered the goods for smart investors is the VanEck Vectors Morningstar Wide Moat ETF.

If you’re a fan of Warren Buffett and his style of investing, then this could be the fund for you. That’s because it mirrors his investment style by providing you with access to companies with fair valuations, strong business models, and competitive advantages.

Over the last five years, it has delivered an average return of 16.5% per annum for investors.

Vanguard MSCI Index International Shares ETF (ASX: VGS)

A final ASX ETF for smart investors is the Vanguard MSCI Index International Shares ETF.

This fund provides investors with easy access to approximately 1,500 of the world’s largest listed companies from major developed countries.

Not only does this give investors access to global economic growth, but it also provides almost instant diversification to a portfolio. This is thanks to it offering exposure to sectors ranging from technology to financials and healthcare to energy.

Over the last five years, it has generated an average return of 13.75% per annum.

The post 3 ASX ETFs for smart investors to buy appeared first on The Motley Fool Australia.

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• 4 ASX ETFs to supercharge your portfolio in February
• 2 excellent ASX ETFs I’d buy for retirement
• Shares vs. property: Beginner investors choosing Aussie shares, ASX ETFs and rentvesting
• 3 excellent ASX ETFs for beginner investors
• Big ticket clipping. Why I’m doubling down on Apple shares with $2,300

Motley Fool contributor James Mickleboro has positions in BetaShares Nasdaq 100 ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Apple, BetaShares Nasdaq 100 ETF, Microsoft, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has positions in and has recommended BetaShares Nasdaq 100 ETF. The Motley Fool Australia has recommended Apple, VanEck Morningstar Wide Moat ETF, and Vanguard Msci Index International Shares ETF. 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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On Tuesday, the S&P/ASX 200 Index (ASX: XJO) slipped into the red. The benchmark index ended the day 0.15% lower at 7,603.6 points.

Will the market be able to bounce back from this on Wednesday? Here are five things to watch:

ASX 200 expected to sink

The Australian share market looks set for a very red day on Wednesday after a hotter than expected inflation reading in the US spooked investors. According to the latest SPI futures, the ASX 200 is expected to open the day 106 points or 1.4% lower. In late trade on Wall Street, the Dow Jones is down 1.8%, the S&P 500 has fallen 1.8%, and the Nasdaq is 2.1% lower.

Oil prices rise

It could still be a good session for ASX 200 energy shares including Beach Energy Ltd (ASX: BPT) and Woodside Energy Group Ltd (ASX: WDS) after oil prices charged higher overnight. According to Bloomberg, the WTI crude oil price is up 1.4% to US$78.01 a barrel and the Brent crude oil price is up 1.1% to US$82.90 a barrel. Oil prices have been on a good run amid tensions in the Middle East.

Computershare results

The Computershare Ltd (ASX: CPU) share price will be on watch today after the company released its half-year results. The administration services company reported a 6% increase in management revenue to $1.6 billion and a 23% jump in management earnings per share to 54.8 cents. This was in line with the market’s expectations.

Gold price tumbles

ASX 200 gold shares including Newmont Corporation (ASX: NEM) and Northern Star Resources Ltd (ASX: NST) could have a difficult session on Wednesday after the gold price sank overnight. According to CNBC, the spot gold price is down 1.4% to US$2,005.4 an ounce. Traders were selling gold in response to the higher than expected inflation reading.

CBA results

Commonwealth Bank of Australia (ASX: CBA) shares will be on watch on Wednesday when the banking giant releases its half year results. The market is expecting Australia’s largest bank to report a first half cash profit of $4,972 million. This will be down from last year’s record half-year cash profit of $5,153 million.

The post 5 things to watch on the ASX 200 on Wednesday appeared first on The Motley Fool Australia.

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• Here are the top 10 ASX 200 shares today

Motley Fool contributor James Mickleboro has positions in Woodside Energy Group. 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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Love it or loathe it, Valentine’s Day has arrived.

Regardless of what you think of the concept, there is no doubt the day has become a big deal commercially.

“Australians expected to spend around $1.1 billion on Valentine’s Day, according to Finder’s research,” said Moomoo market strategist Jessica Amir.

“The Australian Retailers Association and Roy Morgan suggest Australians plan to spend $485 million on Valentine’s Day gifts, with 42% choosing roses.”

And with all this consumption going on, there must be some ASX shares that will benefit, right?

Indeed, here are three stocks that Amir reckons could do pretty well out of all this outpouring of love:

First, some wine

Like it or not, many Australians like to commemorate a special occasion with a glass or two.

Especially so on a romantic day like Valentine’s Day.

“What’s a celebration without a bit of wine, of course,” said Amir.

“Keep an eye out for the Australian global wine-making business Treasury Wine Estates Ltd (ASX: TWE).”

Even without 14 February, many professional investors are in love with Treasury Wine shares at the moment because of the possibility that China will reduce punitive tariffs on Australian wine imports.

According to CMC Invest, 12 out of 14 experts are recommending a buy for Treasury Wine shares.

The share price is already up more than 4% so far this year.

Then let’s light the candles and see what happens

Then after you’ve enjoyed some social lubrication, it might be time to dim the house lights and fire up the candles.

“For other Aussie stocks that might be boosted amidst V-Day spending, consider… candle stockist Dusk Group Ltd (ASX: DSK).”

The Dusk share price has lost 43% over the past year, but that does mean it now has a mouthwatering — and fully franked — 11% dividend yield.

So maybe if the candles led to the ultimate expression of love, there may be some further great news down the track.

And Amir has the ASX stock perfectly poised to take advantage.

“Offering Aussies baby products, Baby Bunting Group Ltd (ASX: BBN) might just tick up amidst Valentine’s Day celebrations.”

The retailer also pays out a decent income, currently distributing a fully franked yield of 4.5%.

The post 3 ASX shares to buy for Valentine’s Day appeared first on The Motley Fool Australia.

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• 2 rejuvenated ASX 200 stocks with ‘strong brands’ ready to roar again
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• Brokers name 3 ASX shares to buy now

Motley Fool contributor Tony Yoo 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 Treasury Wine Estates. 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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You don’t need a massive amount of cash to kick off an investment that could pay out a perpetual second income.

Don’t believe me?

Let’s start with $20,000 and take it through this hypothetical:

Save, save, save, invest, invest, invest

Say you constructed a well diversified portfolio of ASX shares with that $20,000.

Then you saved hard and managed to add $400 to it each month.

If that portfolio can manage a compound annual growth rate (CAGR) of 13%, then you’ll be raking in that second income in a matter of years.

Is 13% achievable?

I don’t see why not. 

If you listen to sensible advice and pick quality stocks like Johns Lyng Group Ltd (ASX: JLG) and Dicker Data Ltd (ASX: DDR), you’ll have done most of the hard work.

Over the past five years, Johns Lyng shares have returned a CAGR of 43%, while Dicker has brought in 30% per annum. The latter is paying out a 3.9% fully franked dividend yield on top of that.

These types of champions mixed with some lukewarm picks and the obligatory duds could very well provide you an overall 13% return each year.

Now sit back as the second income rolls in

Going back to the $20,000 portfolio with $400 added monthly, if that grows at 13% per annum then it will be worth $156,306 after just 10 years.

At that point, if you decide to stop reinvesting the returns and decide to cash it in each year, you will receive an annual second income of $20,319.

That is an average of $1,693 each month for the rest of your life.

Now, if you are still young and you have patience, perhaps you want to let that stock portfolio grow for 20 years before squeezing passive income out of it?

Twenty years of growth will turn the pot into $619,006, which equates to a massive annual second income of $80,470.

In monthly terms, that’s an amazing $6,705.

Enough to retire on, right?

Perhaps then it won’t be a second income, but your first.

Good luck with your investments.

The post $20k of savings? Here’s how I’d aim to turn that into a second income of $6,705 a month! appeared first on The Motley Fool Australia.

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• Big news: 15 ASX 200 shares smashing 52-week highs this Tuesday
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• Dicker Data shares charge higher on dividend boost
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Motley Fool contributor Tony Yoo has positions in Johns Lyng Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Dicker Data and Johns Lyng Group. The Motley Fool Australia has positions in and has recommended Dicker Data. The Motley Fool Australia has recommended Johns Lyng 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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Becoming wealthy with ASX shares is a goal that many of us share.

And while there are no guarantees which the share market, history shows that it is possible to become a millionaire through investing in high quality ASX shares.

Generally, this takes a long period of consistent investing, allowing compounding to work its magic.

However, every so often the Australian share market has produced a few ASX shares that do all the heavy lifting for you (and quickly).

These are millionaire-maker shares.

They are usually labelled this if they generate a return of 1,000% over a period of time.

That’s because this return would turn a $10,000 investment in a cool $1 million.

Millionaire-maker ASX shares

A recent example of a millionaire-maker ASX share is Wildcat Resources Ltd (ASX: WC8).

Less than 12 months ago the lithium explorer’s shares were changing hands for 3 cents per share.

This means that if you had invested $10,000 into Wildcat’s shares, you would have picked up approximately 3.33 million units.

Today they are trading at around 47 cents, which values that holding at over $1.5 million.

Though, it is worth highlighting that sinking $10,000 into a mining stock with a 3 cents share price is more or less gambling unless you really know what you’re doing. Investors (or speculators) frequently lose large sums of money from taking a punt on a penny stock.

So, investors may be better off looking for ASX shares with explosive growth and proven business models and allowing them a little more time to grow your wealth.

But which ASX shares?

Two ASX shares that brokers are tipping to have extremely bright futures are location technology company Life360 Inc (ASX: 360) and quick service restaurant solutions company TASK Group Holdings Limited (ASX: TSK).

Goldman Sachs currently has a buy rating and $10.50 price target on Life360’s shares. It notes that the company has a US$12 billion opportunity (and growing). Whereas it is currently reporting annualised monthly revenue (AMR) of $259.1 million.

As for TASK Group, Bell Potter has a buy rating and 59 cents price target on its shares. Its products are used by Guzman Y Gomez for point of sale, data warehouse, enterprise management, online ordering, and loyalty. It also counts McDonald’s Corp (NYSE: MCD) as a customer.

Whether they will be millionaire-maker ASX shares, only time will tell. But they’re certainly worth a closer look.

The post 2 ASX shares with millionaire-maker potential appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Life360. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group and 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.

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It doesn’t matter if you think a recession is coming or boom times are ahead, there are some businesses that are simply set up for a renaissance.

There are a couple of bargain stocks at the moment that I think are in that enviable position:

‘Strong brands and a quality management team’

After falling more than 8% since late October, the market is getting antsy about Treasury Wine Estates Ltd (ASX: TWE).

In 2020, the company lost the Chinese export market overnight in 2020 due to diplomatic tensions between Beijing and Canberra. 

But a review of the punitive tariffs in the world’s most populous nation is reportedly due out next month.

With relations between the countries somewhat warmer under the current federal government, there is much anticipation that Treasury Wine could have a massive market restored instantly.

“Lifting tariffs, or significantly reducing them, should ignite demand for Treasury Wine’s Penfolds brand,” Shaw and Partners senior investment advisor Jed Richards told The Bull.

“The company offers strong brands and a quality management team.”

Those who invest for a living are loving Treasury Wine’s prospects at the moment.

According to CMC Invest, 12 out of 14 analysts believe the stock is a buy.

Ugly duckling no more?

It’s been a rough few years for Credit Corp Group Limited (ASX: CCP) shares.

As a debt buyer, its business increases when consumers fall behind in their loan repayments.

First, the COVID-19 pandemic came and the market thought Credit Corp’s business would go gangbusters.

It didn’t.

Then inflation started rising and central banks hiked up interest rates until there were nose bleeds. Consumer wallets started getting lighter and lighter.

Credit Corp still couldn’t make hay.

So after five years, the share price is disappointingly down 14.5%.

But there are signs in the last few months that Credit Corp might have finally turned a corner.

The analysts at Celeste noticed that US collections productivity showed “steady improvement” last year after an awful 2022.

“The US delinquency environment has stabilised since the AGM, with debt ledger prices significantly lower,” read their memo to clients.

“The lending business experienced strong demand, with net lending guidance upgraded from $50 million to $145 million.”

And guess what? The Credit Corp share price has now gained a whopping 56% since 18 October.

Plenty of experts reckon it’s still a bargain stock. Six out of nine analysts currently surveyed on CMC Invest rate the stock as a buy.

The post 2 top ASX bargain stocks that could be ready for a bull run appeared first on The Motley Fool Australia.

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• 2 rejuvenated ASX 200 stocks with ‘strong brands’ ready to roar again
• Here are the top 10 ASX 200 shares today
• Brokers name 3 ASX shares to buy now

Motley Fool contributor Tony Yoo 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 Treasury Wine Estates. 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’s hard to beat owning some ASX dividend stocks that pay you a great yield and offer major capital gain potential.

But which ASX dividend stocks could offer this winning combination today?

Three shares that analysts are tipping as buys with market-beating total returns are listed below.

Here’s what they are expecting from them:

Coles Group Ltd (ASX: COL)

The first ASX dividend stock that could be a top buy is supermarket giant Coles.

That’s the view of analysts at Citi, which have a buy rating and $17.50 price target on its shares. This suggests 10% upside for investors.

While Citi expects a reasonably subdued performance in FY 2024, it is predicting strong earnings growth in FY 2025 and FY 2026.

The broker believes this will underpin fully franked dividends per share of 64 cents in FY 2024, 70 cents in FY 2025, and then 79 cents in FY 2026. Based on the current Coles share price of $15.97, this will mean yields of 4%, 4.4%, and 4.95%, respectively.

Endeavour Group Ltd (ASX: EDV)

Another ASX dividend stock that brokers rate as a buy is BWS and Dan Murphy’s owner Endeavour.

Goldman Sachs is fan of the company due to its “clear market leading position.” It has a buy rating and $6.40 price target on the company’s shares, which suggests upside of almost 19%.

In respect to dividends, Goldman is forecasting fully franked dividends of approximately 21 cents per share in FY 2024 and 23 cents per share in FY 2025. Based on the current Endeavour share price of $5.41, this will mean yields of 3.9% and 4.25%, respectively.

Stockland Corporation Ltd (ASX: SGP)

Finally, Citi is tipping big returns from the shares of this residential and land lease developer and retail, logistics and office real estate property manager.

The broker has a buy rating and $5.00 price target on Stockland’s shares, which implies approximately 9% upside from current levels.

As for income, the broker expects a 27 cents per share dividend in both FY 2024 and FY 2025. This represents 5.9% dividend yields.

The post 3 no-brainer ASX dividend stocks to buy for market-beating returns in 2024 appeared first on The Motley Fool Australia.

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More reading

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• Falling yields? I’d buy these ASX dividend beasts for a beefed-up income in 2024

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor James Mickleboro has positions in Endeavour Group. 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.

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One of the biggest challenges for long-term investors is to keep the faith when a business is going through tough times.

There are plenty of moments when faith will be tested, but as long as the original investment thesis still holds and any problems are deemed to be temporary, long-termers need to fight through their anxiety.

Here’s a pair of such cheap shares representing quality companies that could be a bargain right now:

Japan ‘disappointing’, but home market still going strong

As the dominant pizza retailer in the country, Domino’s Pizza Enterprises Ltd (ASX: DMP) used to be a market darling.

But a series of missteps in recent times has seen the stock price plummet more than 74% since September 2021.

Unfortunately, 2024 is off to a shocker as well.

After a January briefing to the market, Domino’s share price plunged 31% in a single day.

Bell Potter advisor Christpher Watt agreed the earnings update was “disappointing”.

“The business in Japan is underperforming and weighing on group performance,” Watt told The Bull.

“However, results in Australia and New Zealand were positive.”

That’s why the Bell Potter team thinks it could be an ideal entry point for the fast food stock.

“We believe the stock has been oversold as Domino’s remains a leader in the sector.”

These cheap shares won’t stay down for long

While Chrysos Corporation Ltd (ASX: C79) was one of the darlings of 2023, the new year has been less kind.

The share price has dived 18% since 10 January.

“Chysos was recently sold down after missing revenue expectations in the second quarter of fiscal year 2024,” said Shaw and Partners senior investment advisor Jed Richards.

Chrysos’ main product is named PhotonAssay, which tests samples for minerals like gold, copper, and silver on behalf of mining clients.

Richards is not worried about the downturn this year.

“Delays in the number of PhotonAssay unit installations reflect timing issues as opposed to a reduction in demand. 

“We view the share price reaction as overdone, presenting attractive entry levels for investors.”

The post 2 ‘oversold’ ASX shares to get onto right now at ‘attractive entry levels’ appeared first on The Motley Fool Australia.

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Motley Fool contributor Tony Yoo 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 Chrysos and Domino’s Pizza Enterprises. The Motley Fool Australia has positions in and has recommended Chrysos. The Motley Fool Australia has recommended Domino’s Pizza Enterprises. 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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After two years of shocking underperformance, ASX small-cap shares made a stunning comeback towards the end of 2023.

“Despite the negativity that pervaded most of last year, the small cap market ultimately managed to deliver solid returns in 2023,” said IML analysts in a blog post.

“A rally late in the year saw the ASX Small Ordinaries up +7.8% for the calendar year, with the Small Industrials up +11.4%.”

Notwithstanding the recent run upwards, the IML team believes small caps are still playing catch-up.

“Small cap valuations remain attractive compared to large caps with superior earnings growth forecasts,” read the memo. 

“On an individual stock level there remain plenty of quality small cap industrials trading at attractive valuations.”

Here are three stocks in particular they’re loving right now:

Reliability of transport contracts 

Kelsian Group Ltd (ASX: KLS) is a transport provider that operates in Australia and various other countries.

The IML team likes how much of its revenue is consistent and reliable.

“The Australian, Singapore and UK operations are underpinned by long-term government contracts. 

“Effectively the earnings under these contracts are inflation-protected, providing a defensive earnings stream with growth coming from new bus routes and generating efficiencies.”

In the US, Kelsian’s clientele is the private sector, but those earnings are also reliable with “no patronage risk borne by the company”.

“With the revenue significantly contracted, recent tender wins in Sydney and the initial contribution of All Aboard America, Kelsian is well placed to deliver solid earnings growth in FY24.

“Further upside in FY25 is possible from further public bus contract wins in Australia and the UK, as well as bolt-on acquisitions in the USA.”

The Kelsian share price has rocketed more than 21% since early October, but the IML team reckons it still has legs.

“Kelsian’s valuation is conservative in our view, on 15 times FY25 earnings and a [dividend] yield of 4%.”

Reliability of an ageing population

Pathology services provider Australian Clinical Labs Ltd (ASX: ACL) had a busy time testing Australians during the COVID-19 pandemic, but since then the stock has been going sideways.

The demographic trends reassure IML analysts of its future though.

“Australia’s ageing population ensures ongoing growth in testing volumes, as older people are more likely to have health issues requiring regular monitoring. 

“The number of conditions able to be assessed by pathology testing continues to grow, also underpinning growth in volumes.”

In the short-term, business has been slower because of “doctor shortages and cost of living pressures”. 

“History indicates that these growth rates are likely to return to trend over time.”

ACL doesn’t have much debt and is in a position to make acquisitions. An attempt to merge with Healius Ltd (ASX: HLS) last year was aborted due to a poor business update on the other side.

“The synergies from such a merger are significant, making a future transaction an attractive opportunity, subject to [regulatory] approval. 

“Trading on only 13.5 times FY25 earnings and a yield of over 5%, we believe ACL is attractively priced.”

Reliability of outsourcing

SG Fleet Group Ltd (ASX: SGF) is the dominant player in Australia in the fleet management industry, and also operates in the UK and New Zealand.

The business has benefitted from two trends, according to IML analysts.

“The company is effectively an asset manager of large corporate fleets and has benefitted from the gradual outsourcing of fleet management services across government and corporate.

“SG Fleet also operates a novated fleet-leasing operation in Australia, which is benefitting from recent government initiatives to promote electric vehicle (EV) take-up in Australia.”

Its contracts are multi-year with a strong history of renewal.

The shortage in new cars arising from the pandemic and subsequent rise in trade-in values dented SG Fleet’s earnings.

“These factors have overshadowed recent results, creating noise in the results and hence creating uncertainty for investors, weighing on the share price.”

The downside, however, is now “excessively” priced in, the IML team added.

“SG Fleet is very attractively priced, trading on under 10 times FY25 earnings and a dividend yield of over 7%.”

The post 3 ‘attractive’ small-cap ASX shares ready to rocket in 2024 appeared first on The Motley Fool Australia.

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Motley Fool contributor Tony Yoo 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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