It’s likely a question on the lips of many of those invested in S&P/ASX 200 Index (ASX: XJO) lithium shares. Thankfully for those holding Liontown Resources Ltd (ASX: LTR) shares, we have an answer as to when the company might pay its maiden dividend.

Liontown chair and major shareholder Tim Goyder sat down with Bell Direct market analyst Grady Wulff earlier this week to discuss what the coming years might bring the company.

And investors will be glad to know dividends are expected to be on the cards. Though, they’re likely some time away yet.

Right now, the Liontown share price is up 0.71%, trading at $2.83%.

For comparison, the ASX 200 is gaining 0.46% at the time of writing.

So, without further ado, let’s dive into when those invested in Liontown shares might expect to receive dividends from the company.

When can those holding Liontown shares expect dividends?

It’s been a big year so far for the Liontown share price. It’s gained a whopping 130% year to date, with the majority of those gains realised on the back of a takeover bid posed by industry giant Albemarle.

The New York-listed lithium producer offered to pay $2.50 per share for its ASX 200 counterpart in March. Commenting on the company’s rejection of the bid at this week’s Resources Rising Stars conference, Goyder said:

The best people to ascertain the value of a company are the operators of the company, or the board.

We, like Albemarle, believe that it’s a great company. The only thing we differ on, of course, is the price.

And, you know, the longer-term shareholders, including myself, look forward to dividends.

Word of potential dividends likely pricked the ears of investors. Particularly, those already honed in on Liontown following its rebuffed takeover bid and amid major merger news from ASX 200 peer Allkem Ltd (ASX: AKE).

But passive income-focused ASX 200 lithium fans might not want to hold their breath waiting for the company’s payouts.

Its flagship Kathleen Valley Project, located in Western Australia, is on schedule to see first production in mid-2024. From there, three major five-year offtake agreements will take effect.

Electric vehicle giants Tesla, Ford, and LG Energy Solutions have each signed on to purchase up to 150,000 dry metric tonnes (DMT) of the project’s production annually.

When asked why investors should pour their hard-earned cash into Liontown shares, Goyder said:

It all comes back to the deposit. We’ve got a 25-year mine life, a production rate in the order of 600,000 tons a year of concentrate, we’ve got five years locked away with Tesla, Ford, and LG Energy Systems.

So, come year six and onwards, hopefully we’ll be doing downstream, and during that period we are quite confident of paying dividends.

The post Own Liontown shares? Here’s when the company expects to kick start dividends appeared first on The Motley Fool Australia.

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More reading

• Are ASX 200 lithium shares approaching a ‘tipping point’ for ripper revenues?
• Power portfolios: Millionaire investors shun ASX 200 lithium shares
• Liontown share price cracks yet another all-time high on Wednesday
• 3 ASX 300 shares that turned $5,000 into $59,000 or much more in 5 years
• ASX lithium shares are off and racing today. What’s behind the boost?

Motley Fool contributor Brooke Cooper 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 Tesla. 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 Flight Centre Travel Group Ltd (ASX: FLT) share price is edging higher this morning.

That’s despite news that a couple of the company’s founders have been selling down their holdings.

At the time of writing, the travel agent’s shares are up 0.5% to $21.50.

Flight Centre share price higher despite founder sales

According to the release, Flight Centre co-founders Geoff Harris and Bill James have been selling shares on-market recently.

In respect to the former, Geoff Harris’ Gehar entity has been selling hundreds of thousands of Flight Centre shares since the beginning of March. This includes the sale of 200,000 shares on 28 April for a total consideration of approximately $3.9 million.

It has been a similar story for James Management Services, owned by Bill James. The co-founder has been selling approximately 25,000 shares almost every week since early in February, receiving in the region of $460,000 to $490,000 with each sale.

On a positive note, the company confirmed that fellow co-founder and current CEO, Geoff Turner, has not been selling shares.

The company also highlights that the two selling co-founders have not been involved with the “company’s day-to-day activities since resigning from the company’s Board of Directors more than 20 years ago.” In other words, this shouldn’t be interpreted as an insider selling event.

Should you be buying or selling shares?

Analysts at Morgans are unlikely to agree with the two co-founders’ decision to sell Flight Centre shares.

Earlier this month, the broker upgraded the company’s shares to an add rating with a $26.25 price target. This suggests potential upside of 22% for investors from current levels. It is also a sizeable premium to what Flight Centre’s co-founders have received for their shares.

The post Flight Centre shares rise despite co-founder sales appeared first on The Motley Fool Australia.

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• Here are the 10 most shorted ASX shares
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• 2 ASX 200 travel stocks (not Qantas!) just upgraded by Citi
• The Flight Centre share price just rocketed to a new 52-week high. Here’s why
• Which ASX 200 travel share has already taken off by 48% in 2023?

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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Core Lithium Ltd (ASX: CXO) shares are pushing higher on Friday morning.

At the time of writing, the lithium miner’s shares are up 3% to $1.14.

Why is the Core Lithium share price charging higher?

Investors have been bidding Core Lithium shares higher today after the company released a positive announcement.

According to the release, the company’s board has approved the funding of the early works for the BP33 underground project. Core Lithium expects to spend a total of $45 million to $50 million on the early development of the next proposed mine at the Finnis project. This will cover the complete development of a box-cut and preliminary site establishment.

The full development costs for the project will not be known until further studies are complete and include the new BP33 resources.

Subject to a potential early wet season, modelled geotechnical and groundwater impacts, Core Lithium expects the early work to be complete by end of the first quarter of 2024. Around the same time, it expects to be in a position to make a final investment decision on the project.

Management commentary

Core Lithium’s CEO, Gareth Manderson, commented:

We are pleased to announce this positive, incremental investment decision that allows initial works to be undertaken while the feasibility study is completed for BP33, our potential next mine at the Finniss Lithium Operation.

I am pleased the civil works contract has been awarded to a successful locally based business, Northern Australian Civil. NAC currently provides civil construction activities at Grants Operations and is a fantastic local contracting partner which employs local Darwin and NT residents and invests back into the Territory. We will continue focus on the safe ramp up of the Grants open pit and concentrate production through the DMS plant. We will aim to provide final project expenditure and other project metrics once we have incorporated the increased resources into our studies by Q1 CY24.

The post Why are Core Lithium shares charging higher today? appeared first on The Motley Fool Australia.

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• Here are the 3 most heavily traded ASX 200 shares on Thursday
• Are ASX 200 lithium shares approaching a ‘tipping point’ for ripper revenues?
• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• ASX 200 lithium shares: ‘A great opportunity to buy into weakness’?
• Could Core Lithium shares make the merger menu next?

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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Australian biotechnology giant CSL Limited (ASX: CSL) has made many investors wealthy over the decades, but it’s been a struggle in recent times.

The brutal reality is that the share price is still 10% lower than its pre-COVID high.

So has the healthcare stock passed its heyday, or are there brighter times ahead?

Let’s take a look:

Poised for a break-out year

Morgans analysts reckon CSL shares are a buy, predicting a post-pandemic revival in the business and the stock price.

“We believe CSL is poised to break-out this year,” they stated, according to The Motley Fool’s James Mickelboro.

“A COVID-exit trade… offering double-digit recovery in earnings growth as plasma collections increase, new products get approved and influenza vaccine uptake increases around ongoing concerns about respiratory viruses, with shares offering good value trading around its long-term forward multiple of ~30x.”

The team has a handy 11.6% upside to the stock price over the next 12 months.

Another interesting endorsement is that CSL is currently the fifth most held stock among millionaires, according to investment platform Selfwealth Ltd (ASX: SWF).

“Our millionaire portfolio investors hold strong companies in strong sectors,” said Selfwealth chief executive Cath Whitaker.

Big investors are bullish on CSL

Finally, there are plenty of institutional investors that are backing the biotech business.

The Motley Fool’s Tristan Harrison reported this week that Australian Foundation Investment Co Ltd (ASX: AFI), Argo Investments Limited (ASX: ARG), and Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) all hold significant stakes in CSL.

“Argo and AFIC are two of the ASX’s largest and oldest listed investment companies. They focus on ASX blue chip shares that can provide a mixture of dividends and capital growth,” Harrison said.

“At the end of April, CSL shares were the third largest position in the AFIC portfolio, with an 8.1% weighting. CSL was also the third largest position in the Argo portfolio, with a 5.2% holding at the end of April.”

The CSL share price is up 10.5% over the past year and 7.5% higher year to date.

The post What’s the forecast for the CSL share price in the second half of 2023? appeared first on The Motley Fool Australia.

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Motley Fool contributor Tony Yoo has positions in CSL 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 CSL and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Washington H. Soul Pattinson and Company Limited. 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 Xero Limited (ASX: XRO) share price was in fine form on Thursday.

The cloud accounting platform provider’s shares surged 9% higher to end the day at $102.49.

Investors were scrambling to buy Xero’s shares after its full-year results impressed the market.

In case you missed it, for the 12 months ended 31 March, Xero posted a 28% increase in operating revenue to NZ$1.4 billion, a 26% lift in annualised monthly recurring revenue to NZ$1.55 billion, and a 45% jump in adjusted EBITDA to NZ$301.7 million.

Where next for the Xero share price?

The good news for investors is that one leading broker believes the Xero share price can keep rising from current levels.

According to a note out of Goldman Sachs, its analysts have responded to the result by reiterating their buy rating with an improved price target of $130.00.

Based on where they are trading today, this suggests that the company’s shares could rise by another 27% over the next 12 months.

What did the broker say?

Goldman Sachs believes the Xero result revealed a “clean, high quality performance with strong growth ahead.” In respect to its performance, the broker said:

UK performance has improved, evident in the strong sub growth (ahead of GSe, top end of guidance). This suggests prior sales execution issues are being resolved, alongside MTD tailwinds & solid macro trends; (2) 2H23 opex performance better than expected with expense ratio 77.9% (vs. guide c.80%). This gives confidence that the 75% FY24 target is achievable; (3) Guidance for sales & marketing as % sales to be flat to marginally down implies > 10% in absolute terms, supporting ongoing subscriber growth. Assuming higher CAC/churn, we still estimate XRO can comfortably add +490-585k FY24 subs (GSe 500k, Ex 3); (3) Stronger than expected FY23 FCF margin at 7.3% in FY23, alongside the rule-of-40 focus implies meaningful consensus upgrades (we revise from 25-29% to 32-34% across FY24-26E.

In light of the above and its positive outlook, the broker continues to see plenty of value in the Xero share price. It concludes:

We revise FY24-26 revenue by +0-1% and EBITDA by +1-3%. We bridge our +18% FY24E revenue growth in Ex 4, and forecast expense ratio of 75.2% vs. c.75% target. Our 12m TP is +3% to A$130 in line with earnings/FX. We re-iterate our Buy (on CL) given strong valuation support (absolute & relative), and await: (1) price changes in mid-23 (GSe +3% ANZ ARPU growth); (2) Xerocon Aug 23-24; and (3) 1H24 result and US update Nov 9.

The post Xero share price can still rise almost 30% from here: Goldman Sachs appeared first on The Motley Fool Australia.

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• 5 things to watch on the ASX 200 on Friday
• Here are the top 10 ASX 200 shares today
• Why Nufarm, Serko, Temple & Webster, and Xero shares are charging higher
• Xero shares jump 7% on stellar results release
• Xero share price on watch amid strong FY23 growth

Motley Fool contributor James Mickleboro has positions in Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Xero. The Motley Fool Australia has positions in and has recommended Xero. 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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An investor seeking out S&P/ASX 200 Index (ASX: XJO) mining stocks has an abundance to choose from. Perhaps one of the more attractive shares, however, is diversified miner South32 Ltd (ASX: S32).

Katana Asset Management portfolio manager and co-founder Romano Sala Tenna reportedly sees value in the $18 billion ASX 200 mining stock.

The South32 share price last traded at $4.06.

The expert has outlined three reasons why the miner could be a buy in a conversation with the Australian Financial Review. Let’s dive in.

3 reasons South32 shares could be worth considering

Valuation

The first thing the expert likes about South32 shares is their valuation.

Sala Tenna said the stock currently trades with a price-to-consensus financial year 2024 earnings ratio (P/E) of around 7 times.

It also boasted an impressive 6.9% dividend yield as of Thursday’s close, having paid out 28 cents per share over the last 12 months. That doesn’t include the 4.4 cent special dividend paid in October.

Of course, snapping up a stock when it trades at an attractive valuation can increase the potential gains on offer for an investor.

Strong balance sheet

Another reason the expert thinks South32 shares could be worth looking at is the company’s “pristine” balance sheet.

The miner ended the first half of financial year 2023 with US$1.56 billion of cash and equivalents and a net debt position of US$298 million.

It also has access to significant liquidity through undrawn credit facilities.

Potential for M&As

That leads into Sala Tenna’s final reason to like South32 shares – its potential for growth through mergers and acquisitions (M&As).

And the expert reckons the company’s balance sheet leaves it in the position to grow through M&As without issuing more shares. As my Fool colleague Mitchell explains with an incredibly relatable analogy, the more shares in a company on offer, the more its earnings per share (EPS) will be diluted:

Like enjoying a bottle of red among friends… if another glass turns up, that means less red going into yours.

But what might South32 look to buy? Sala Tenna said, as per the publication:

We believe that further acquisitions in the copper space make sense and provide diversification and a push deeper into [electric vehicle] metals.

The post Looking to buy an ASX 200 mining stock? Here are 3 reasons to consider South32 shares appeared first on The Motley Fool Australia.

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• Brokers expect big gains and huge dividends from these ASX 200 mining shares
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• Stay alert! Expert urges buying this ASX dividend stock as soon as it dips below $4
• Analysts name 2 strong ASX 200 dividend shares to buy
• Invested $4,000 in South32 shares 5 years ago? Here’s how much passive income you’ve earned

Motley Fool contributor Brooke Cooper 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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Fortunately for income investors, the ASX 200 is not short of dividend-paying stocks. This makes the share market a great place to generate passive income.

But which ASX 200 dividend stocks would be good options right now for a passive income boost? Two that have recently been rated as buys are named below:

Centuria Industrial Reit (ASX: CIP)

The first ASX 200 dividend stock that could be a good source of passive income is Centuria Industrial.

It is Australia’s largest domestic pure play industrial REIT with a portfolio of high-quality industrial assets situated in urban infill locations throughout Australia. The company notes that this portfolio is underpinned by a quality and diverse tenant base.

UBS is positive on the company and is expecting Centuria Industrial to pay dividends per share of 16 cents in both FY 2023 and FY 2024. Based on the current Centuria Industrial share price of $3.19, this represents yields of 5% in both financial years.

The broker also sees double-digit upside for its shares with its buy rating and $3.68 price target.

Rio Tinto Ltd (ASX: RIO)

Over at Goldman Sachs, its analysts think that Rio Tinto is an ASX 200 dividend stock to buy.

It advised that this is due partly to the mining giant’s “compelling relative valuation vs. peers (0.9xNAV vs. BHP 1.05xNAV and FMG 1.5xNAV), [and] strong FCF and Div yield with our bullish view on iron ore, aluminium and copper prices.”

In respect to the latter, the broker is expecting Rio Tinto to be able to pay fully franked dividends per share of US$5.36 (A$8.10) in FY 2023 and then US$4.68 (A$7.07) in FY 2024. Based on the latest Rio Tinto share price of $109.98, this will mean yields of 7.35% and 6.4%, respectively.

Another positive is that as well as a big dividend yield, Goldman sees major upside potential for its shares. The broker currently has a conviction buy rating and $136.20 price target on them.

The post Experts say these 2 ASX 200 dividend stocks are buys for passive income appeared first on The Motley Fool Australia.

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More reading

• What’s going on with Rio Tinto shares and lithium?
• Bought $5,000 worth of Rio Tinto shares last February? Guess how much passive income you’ve already grabbed?
• How does the Fortescue dividend stack up against BHP and Rio?
• How big will the Rio Tinto dividend be next year?
• Could the iron ore price slide below $100 US dollars in 2023?

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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The Bank of Queensland Limited (ASX: BOQ) share price has dived around 10% over the last month. With the ASX bank share going through this rapid decline, investors may be wondering whether this is an opportunity.

Last year, the prospect of higher interest rates was viewed as a real positive for ASX bank shares because of how they could pass on interest rate rises to borrowers quicker than savers, and increasing earnings banks can make on transaction accounts that pay 0% interest.

Many banks reported an increase in their net interest margin (NIM) in 2022 thanks to the higher interest rates. However, things aren’t turning out as well as hoped for lenders with intense competition in the sector. As we can see on the graph below, Bank of Queensland shares have suffered over the last year.

Fund manager Contact Asset Management has recently commented on the regional bank and whether it’s good value. The investment team started out by saying that the recent FY23 half-year result was “soft”. Hence, let’s have a quick look at the highlights from the report.

Earnings recap

Bank of Queensland said that its cash earnings were $256 million, a reduction of 4% from the first half of FY22.

Cash profit dropped even though the NIM grew by 4 basis points from the second half of FY22. It suffered a 7% rise in operating expenses to $495 million, which reflected “higher inflation and other costs including higher technology expenses and costs for proactive customer contact, technology and cyber security.”

Bank of Queensland shares may have been partly affected by the loan impairment expense of $34 million compared to a credit of $15 million in the first half of FY22. Bank of Queensland said this was driven by an increase in collective provisions reflecting “continued uncertainty around future economic impacts of inflation and interest rate pressures as well as recently observed and forecast declines in house prices.”

There was a 9% cut to the interim dividend per share to 20 cents, so shareholders have seen a reduction of their share value and a smaller payout.

In the bank’s outlook statement, it said that it expects to see “heightened mortgage competition continuing as well as escalated deposit competition due to term funding facility refinancing”, with interim margin compression anticipated.

It also noted that it’s looking to “align the structure” of its organisation to match its customer segments and business model, reduce duplication and leverage the automation of processes.

Fund manager views on Bank of Queensland shares

Contact Asset Management noted the “intensifying competition” in the banking industry for both mortgages and deposits, putting pressure on the NIM.

Bank of Queensland shares are only a small position in the Contact fund, but it intends to be patient “for now given the discount to book value that the shares are currently trading at.”

In other words, the market capitalisation is at a lower price than Bank of Queensland’s net assets.

Contact also said that ME Bank acquisition is “integrating well and should deliver on synergies.” The fund manager also pointed out that Bank of Queensland’s boss, Patrick Allaway is “eager to reduce the cost base.” As a concluding, optimistic thought, Contact explained:

We expect to see any sign of good news result in a material re-rating of the stock.

The post Down 10% in a month, are Bank of Queensland shares in for a material re-rating? 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 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 Fortescue Metals Group Ltd (ASX: FMG) share price could get a boost over the longer-term over the ASX mining share’s latest move to improve its balance sheet.

Many investors pay a lot of attention to the company’s income statement, but the balance sheet can be just as important, if not more important to a business’ long-term health. Managing a company’s assets and liabilities could be the difference between success and failure.

This week, Fortescue revealed a promising update regarding its balance sheet.

Redemption of senior unsecured notes

The ASX iron ore share announced to the market that it is redeeming its outstanding US$750 million 5.125% senior unsecured notes which are due in May 2024. The redemption will be completed on 1 June 2023.

Fortescue said that the notes will be “redeemed utilising cash on hand, further strengthening Fortescue’s capital structure.” A stronger balance sheet could be good news for the Fortescue share price. 

The company said that the redemption price for the notes will be 100% of the principal amount of the notes redeemed, plus any accrued interest up to, but excluding, the redemption date. Interest will not accrue and the notes will not be deemed to be outstanding on the redemption date.

What’s the benefit of this move?

For Fortescue, it makes sense to redeem the notes and avoid paying that relatively expensive interest rate. I would guess that the interest income Fortescue could generate from having that cash in the bank wouldn’t be as high as much as the notes are costing the ASX mining share.

The company’s net assets figure doesn’t change by making this move, but it should improve the net profit with a lower interest expense.

Investors typically like to value an ASX share based on the net profit after tax (NPAT) or cash flow that they’re going to generate. Given this move should improve the NPAT and cash flow, it’s likely to be seen as a benefit for the Fortescue share price, even if it’s just a small benefit.

Fortescue share price snapshot

As we can see on the graph above, the ASX iron ore share has risen by around 2% over the past year. It has slightly outperformed the S&P/ASX 200 Index (ASX: XJO) over the same time period, which has risen by 1.3%.

The post Could this ‘further strengthening’ boost the Fortescue share price moving forward? appeared first on The Motley Fool Australia.

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More reading

• Could Fortescue be the next ASX 200 miner on the lithium M&A trail?
• How does the Fortescue dividend stack up against BHP and Rio?
• Is the Fortescue share price a buy for its 2024 dividend yield?
• Could the iron ore price slide below $100 US dollars in 2023?
• Why are ASX 200 mining stocks having such a shocking end to the week?

Motley Fool contributor Tristan Harrison has positions in Fortescue Metals 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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Pilbara Minerals Ltd (ASX: PLS) shares have done incredibly well for shareholders over the long term. Young ASX investors in particular are still reportedly loving the ASX lithium share. So in this article, we’re going to look at what’s attracting everyone, thanks to data from a clearing and broker services group.

For investors who don’t know much about the business, Pilbara Minerals is a lithium miner that is trying to dig more lithium out of the ground and also become more involved in the value chain of producing battery-ready lithium.

Lithium is seen as an exciting field because of the predicted growth in electric vehicles as the world decarbonises.

How popular are Pilbara Minerals shares?

The Australian Financial Review reports that according to 300,000 trading accounts at Openmarkets, Pilbara Minerals was the most purchased company among millennial and Generation Z investors in the 12 months to 31 March 2023.

But lithium companies were not among the most popular buys for Baby Boomers or Generation X investors over a three-month or 12-month time period.

The AFR suggested investor interest perked up after a fall in lithium prices of around 70% after China’s decision in January to curb electric vehicle subsidies.

Yet brokers such as Morgan Stanley suggest the lithium market is “turning around” with signs of improvement for the electric vehicle market, and amid tightening demand.

Why this particular ASX lithium share?

Portfolio manager at Acorn Capital, Rick Squires, pointed out that Pilbara Minerals is already producing lithium so it’s not an ASX lithium share that’s in the exploration or mine development stage. He said (courtesy of AFR):

When you start these mines up, they always have problems you never know about. It’s always the unknown unknowns.

There’s a lot of institutions that have been burnt before, in terms of that ramp-up and start-up phase…but if it goes well, there’s a rapid re-rating, and you can make a lot of money.

I think retail investors are looking at Core Lithium and the production profile that’s being forecast, and they’re comparing that with Pilbara and Allkem and thinking, ‘wow, there’s really deep value’, but they’re not actually thinking about the risks.

Squires prefers large operators like Pilbara Minerals. As well, the ASX lithium share’s operations are in the stable operating region of Western Australia.

He called Pilbara Minerals and Allkem Ltd (ASX: AKE) “reasonably stable” for resource companies, noting they have established processes, mines with long lives, and proven practices for extracting lithium economically. Squires commented:

Both companies are in the top 100 in the ASX, so they’re large companies. Are they going to go up two or three times? No. But very few companies in the ASX go up two or three times in a year, so it depends on where you want to play.

Foolish takeaway

The ASX lithium share is generating a lot of cash flow. In the three months to 31 March 2023, its cash balance increased by $457 million to $2.68 billion. Not only is the business in an exciting industry, but it’s printing bucketloads of cash at the moment.

Time will tell whether the younger Aussie investors are right in backing this growing lithium star.

The post Why are young ASX investors so in love with Pilbara Minerals shares? appeared first on The Motley Fool Australia.

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More reading

• Brokers say these 3 stellar ASX 200 growth shares are top buys
• 3 ASX 200 lithium shares that smashed the market today
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• Where will ASX lithium shares go in 2023?

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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