• Why Goldman Sachs rates Wesfarmers shares as a buy

    A man holding a cup of coffee puts his thumb up and smiles while at laptop.

    Wesfarmers Ltd (ASX: WES) shares have been strong performers in 2024.

    Since the start of the year, the conglomerate’s shares are up 18%.

    This means that a $10,000 investment at the end of last year, would be worth almost $12,000 today.

    But are the gains over? Let’s see what analysts at Goldman Sachs are saying about the Bunnings owner.

    Are Wesfarmers shares a buy?

    The team at Goldman Sachs thinks that there’s room for the company’s shares to keep rising a touch from here.

    According to a note out of the investment bank this morning, its analysts have retained their buy rating and lifted their price target to $68.80 (from $66.00).

    However, with this price target only marginally ahead of where Wesfarmers’ shares trade now, investors may be better off waiting for a pullback before jumping in.

    What is the broker saying?

    Goldman believes that the market underappreciates a number of opportunities that Wesfarmers has across its business. It commented:

    Our upgrade thesis in Jan was centered around robust growth of the Australian DIY Home Improvement market and continued cost efficiencies driving strong Retail free cash flow for new platform investments. That said, we believe that several corporate wide opportunities remain under-appreciated by the market. These include Digital, Retail Media and the WES Health platform.

    In respect to digital, the broker points out that Wesfarmers has a treasure trove of consumer data to leverage thanks to its loyalty programs. It said:

    WES has the largest volume of consumer data assets including 63mn monthly retail (1H24) website visits and 14.2mn total loyalty members across Flybuys, Priceline and PowerPass.

    Retail Media and Health growth

    Goldman sees a lot of potential in the Wesfarmers Retail Media business. In fact, it believes it can become a meaningful earnings contributor by the end of the decade. It explains:

    We estimate that Retail Media in Australia will reach ~A$2.7B in FY30e, or 17% of advertising revenue. Dominant scaled players in high frequency and specialty retail categories are most likely to benefit. As an adjacent opportunity to WES’s digital strategy, our blue-sky scenario suggests that Retail Media can add ~1% to WES’s FY30e Retail sales, and ~4% EBIT profit. We value the upside option at ~A$2.0/sh.

    Finally, the Wesfarmers Health business is also underappreciated by the market according to Goldman. Particularly given its massive market opportunity. It said:

    We continue to believe that the vertical TAM is A$97B with an attractive profit pool of ~A$9B. WES’s existing API assets will benefit from upgraded automated pharmaceutical wholesale DC. We remain confident that the Non-Invasive Aesthetics business could transform the API business towards higher growth and profitability and value WES Health at A$2.0/sh per share.

    All in all, the long-term looks very positive for Wesfarmers and its shares.

    The post Why Goldman Sachs rates Wesfarmers shares as a buy appeared first on The Motley Fool Australia.

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    Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group and Wesfarmers. The Motley Fool Australia has positions in and has recommended Wesfarmers. 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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  • 3 ASX 200 dividend shares to buy according to brokers

    Calculator on top of Australian 4100 notes and next to Australian gold coins.

    Fortunately for Aussie income investors, there are lots of ASX 200 dividend shares trading on the local share market. But which ones could be buys?

    Three that have been given the thumbs up by analysts are listed below. Here’s what sort of dividend yields you can expect from them:

    Deterra Royalties Ltd (ASX: DRR)

    The first ASX 200 dividend share that analysts are positive on is Deterra Royalties.

    It is focused on the management and growth of a portfolio of royalty assets across a range of commodities. Deterra’s existing portfolio includes royalties held over Mining Area C, its cornerstone asset, in the Pilbara region of Western Australia, as well as five smaller royalties including Yoongarillup/Yalyalup, Wonnerup, Eneabba, and St Ives.

    The team at Morgan Stanley likes the company and has an overweight rating and $5.65 price target on its shares.

    As for income, the broker is forecasting Deterra Royalties to pay fully franked dividends per share of 37 cents in FY 2024 and 34 cents in FY 2025. Based on the current Deterra Royalties share price of $4.76, this will mean yields of 7.8% and 7.1%, respectively.

    Stockland Corporation Ltd (ASX: SGP)

    Another ASX 200 dividend share that could be a buy is Stockland.

    Last month, the team at Morgan Stanley retained its buy rating and $5.10 price target on the shares of Australia’s largest community creator. The broker is feeling positive about the company’s proposed purchase of Lendlease’s communities business and believes it will be earnings accretive if it completes.

    In the meantime, Morgan Stanley is expecting dividends per share of 25.7 cents in FY 2024 and 26.5 cents in FY 2025. Based on the current Stockland share price of $4.68, this will mean yields of 5.5% and 5.7% yields, respectively.

    Suncorp Group Ltd (ASX: SUN)

    Over at Goldman Sachs, its analysts think that the insurance giant could be an ASX 200 dividend share to buy right now.

    The broker currently has a buy rating and $17.54 price target on the company’s shares.

    It likes Suncorp due to “the tailwinds that exist in the general insurance market.” It highlights that this includes “very strong renewal premium rate increases and the benefit of higher investment yields.”

    As for income, the broker is forecasting fully franked dividends per share of 78 cents in FY 2024 and 83 cents in FY 2025. Based on the current Suncorp share price of $16.42, this will mean yields of 4.75 and 5%, respectively.

    The post 3 ASX 200 dividend shares to buy according to brokers appeared first on The Motley Fool Australia.

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  • If I invest $10,000 in Wisetech shares, how much dividend income will I receive?

    Australian notes and coins symbolising dividends.

    WiseTech Global Ltd (ASX: WTC) shares closed higher on Tuesday, up 0.29% to $91.89 apiece.

    ASX tech shares aren’t known for paying dividends because many of them are young growth companies.

    This means they typically choose to reinvest all their free cash flow and/or profits into further growth.

    But Wisetech is a 30-year old business and also the largest technology share on the ASX.

    It began paying dividends back in 2017.

    The logistics software provider has a remarkable history of raising its dividends.

    Every interim and final dividend — bar the final dividend in the first year of COVID — has been higher than the previous payment.

    The latest dividend announced by Wisetech was the interim payment for 1H FY24.

    That was a fully-franked 7.7 cents per share dividend, up almost 17% on the 1H FY23 payment of 6.6 cents per share.

    This came on the back of a 32% rise in revenue to $500 million and a 23% EBITDA lift to $230 million.

    What will the Wisetech dividend be in 2024, 2025 and 2026?

    The consensus analyst forecast published on CommSec is for Wisetech shares to pay dividends of 16.4 cents per share this year.

    The analysts expect an increase to 22.2 cents in 2025 and 29.1 cents in 2026.

    Let’s calculate the dividend yields using yesterday’s closing share price.

    A $10,000 budget (minus a brokerage fee of $5) will buy you 108 Wisetech shares at that price.

    Total spend = $9,924.12.

    If we multiply 108 shares by 16.4 cents, we get a total annual dividend amount of $17.71. That’s a dividend yield of 0.18%.

    Yep, tiny.

    In 2025, the dividend payment is anticipated to be $23.98. That’s a dividend yield of 0.24%.

    In 2026, the dividend payment is tipped to be $31.43. That’s a dividend yield of 0.32%.

    Yep, still tiny.

    But here’s why you probably don’t care.

    Wisetech share price up 297% in 5 years

    Here’s a chart showing how the Wisetech share price has grown over the past five years.

    As you can see, the tech stock is up a whopping 297%.

    Over the past 12 months, Wisetech stock has risen 39%.

    Wisetech is predominantly an ASX growth stock. This is why investors buy it. They’re after the potential capital gains.

    That’s not to say that Wisetech won’t become a better dividend payer in the future. This will depend on the company’s growth and how its strategy may change over time.

    What’s next for Wisetech shares?

    E&P Financial Group analysts say Wisetech is one of four ASX shares likely to benefit from the artificial intelligence (AI) boom.

    The analysts say Wisetech is likely to benefit from the software side of the AI explosion.

    E&P said:

    [Wisetech is] extremely well positioned for this trend, with a decent swath of AI capabilities already, and a completely unique data capability to build from.

    Fund manager Wilson Asset Management says Wisetech is demonstrating “its ability to integrate its recently-acquired businesses called Blume and Envase, without losing the organic growth momentum.”

    The post If I invest $10,000 in Wisetech shares, how much dividend income will I receive? appeared first on The Motley Fool Australia.

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    Motley Fool contributor Bronwyn Allen 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 WiseTech Global. The Motley Fool Australia has positions in and has recommended WiseTech Global. 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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  • 5 things to watch on the ASX 200 on Wednesday

    A female stockbroker reviews share price performance in her office with the city shown in the background through her windows

    On Tuesday, the S&P/ASX 200 Index (ASX: XJO) had a good session and pushed higher. The benchmark index rose 0.45% to 7,824.2 points.

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

    ASX 200 expected to rise

    It looks set to be another positive session for the Australian share market on Wednesday following a decent night in the United States. According to the latest SPI futures, the ASX 200 is expected to open the day 30 points or 0.4% higher. On Wall Street, the Dow Jones edged slightly lower, the S&P 500 rose 0.15%, and the Nasdaq climbed 0.3%.

    Oil prices tumble

    ASX 200 energy shares including Beach Energy Ltd (ASX: BPT) and Woodside Energy Group Ltd (ASX: WDS) could have a tough session after oil prices tumbled overnight. According to Bloomberg, the WTI crude oil price is down 1.3% to US$85.33 a barrel and the Brent crude oil price is down 1% to US$89.50 a barrel. The oil rally ran out of steam overnight after traders decided to take profit following some strong gains.

    Gold price breaks new record

    ASX 200 gold shares such as Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) could have a great session on Wednesday after the gold price stormed higher again overnight. According to CNBC, the spot gold price is up 0.9% to US$2,371.8 an ounce. The precious metal hit a new record high amid increased buying from central banks and because of geopolitical risks.

    Wesfarmers rated as a buy

    Goldman Sachs thinks that Wesfarmers Ltd (ASX: WES) shares are a good option for investors. This morning, the broker retained its buy rating and lifted its price target on the conglomerate’s shares to $68.80. Goldman’s analysts “believe that several corporate wide opportunities remain under-appreciated by the market. These include Digital, Retail Media and the WES Health platform.” It highlights that “WES has the largest volume of consumer data assets including 63mn monthly retail (1H24) website visits and 14.2mn total loyalty members across Flybuys, Priceline and PowerPass.”

    Dividend payday

    A number of ASX 200 shares will be rewarding their shareholders with dividend payments on Wednesday. Among the companies paying dividends are media giant News Corporation (ASX: NWS), private health insurance company NIB Holdings Limited (ASX: NHF), and plumbing parts company Reece Ltd (ASX: REH). The latter will be paying its shareholders a fully franked dividend of 8 cents per share.

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

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    Motley Fool contributor James Mickleboro has positions in Woodside Energy Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group and Wesfarmers. The Motley Fool Australia has positions in and has recommended NIB Holdings and Wesfarmers. 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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  • Here’s the profit forecast to 2028 for Core Lithium shares

    A man wearing a shirt, tie and hard hat sits in an office and marks dates in his diary.

    Core Lithium Ltd (ASX: CXO) shares have been under significant pressure over the last 12 months.

    For example, since this time last year, the lithium miner’s shares have lost approximately 80% of their value.

    This means that if you had invested $20,000 into the company’s shares a year ago, you’d have just $4,000 left today.

    Why have Core Lithium shares crashed?

    Investors have been scrambling to the exits largely due to falling lithium prices.

    Not only has falling prices of the battery making ingredient put a dent in sentiment, but it is hurting the profitability of miners.

    In the case of Core Lithium, prices have fallen to such a level that it is uneconomical for the company to continue mining operations.

    Earlier this year, the company suspended its mining operations and will instead process stockpiles. But once those run out, it remains unclear what action Core Lithium will take. Though, given that it terminated arrangements with contractors, it seems unlikely that a return to mining operations is on the horizon until there’s a major rebound in lithium prices.

    Will lithium prices rebound?

    The bad news for Core Lithium and its shares is that Goldman Sachs doesn’t believe prices will rebound in the near future. In fact, it warns that the current surplus of lithium will only get worse in 2025, potentially putting further pressure on the price of the white metal.

    As I covered here yesterday, the broker said:

    Our global team highlights that the recent rally in lithium prices should not be interpreted as the end of the bear market, where further supply rationing is needed to reduce both the 2024E surplus and now larger surplus in 2025E, with the top end of the integrated cash cost curve dominated by Chinese lepidolite (US$8k-12k/t LCE) and integrated African concentrates (US$7k-13k/t LCE).

    Core Lithium profit forecast

    In light of the above, you won’t be surprised to learn that the profit forecast for Core Lithium is looking very bleak.

    Goldman Sachs is forecasting revenue of $164 million and underlying EBITDA of $16 million in FY 2024.

    After which, it expects revenue to come in at just $13 million in FY 2025 with an EBITDA loss of $7 million.

    In FY 2026, the broker is forecasting revenue of $34 million and an EBITDA loss of $17 million.

    Things then start to look a bit better for Core Lithium, with Goldman predicting revenue of $138 million and EBITDA of $7 million in FY 2027.

    Finally, in FY 2028, revenue is forecast to come in at $259 million, with underling EBITDA at a far healthier $74 million.

    In summary:

    • FY 2024: Revenue of $164 million and EBITDA of $16 million
    • FY 2025: Revenue of $13 million and EBITDA loss of $7 million
    • FY 2026: Revenue of $34 million and EBITDA loss of $17 million
    • FY 2027: Revenue of $138 million and EBITDA of $7 million
    • FY 2028: Revenue of $259 million and EBITDA of $74 million

    All in all, it looks set to be a couple of years of struggles before there will be any meaningful improvement in its performance.

    The post Here’s the profit forecast to 2028 for Core Lithium shares appeared first on The Motley Fool Australia.

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    Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended 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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  • Do CBA shares even pay a good dividend anymore?

    Young woman using computer laptop with hand on chin thinking about question, pensive expression.

    Commonwealth Bank of Australia (ASX: CBA) shares are well known for their generosity when it comes to dividend payments.

    ASX banks, particularly the big four, have been paying out large and fully franked dividend payments to their investors for decades. At any one time, it’s not uncommon to see one or two of the big four trading on fully-franked dividend yields of over 6%.

    Owners of CBA shares have been a lucky group of late. They have collectively seen their wealth balloon over the past four or so months. That’s been thanks to the CBA share price’s rise from around $96 in early November to last month’s record high of $121.54 a share.

    At present, the CBA share price remains up a healthy 19.44% over the past 12 months.

    But this may be ringing alarm bells for some investors. Perhaps those who would like to top up their CBA share piles. Or even those who wish to participate in the bank’s regular dividend reinvestment plan (DRP).

    As any good dividend investor knows, a company’s dividend yield doesn’t just depend on the raw dividends per share that are forked out. It is also a function of that company’s share price.

    Any ASX dividend share’s trailing dividend yield is calculated by dividing its raw dividends per share by its share price. So if a company cuts its dividend, the yield is obviously reduced. But it is also reduced if those dividends per share remain the same, but its stock price rises.

    Why is the dividend on CBA shares so low?

    To illustrate, last year CBA closed October trading at $96.56 a share. At this stock price, CBA’s 2023 total of $4.55 in dividends per share gave the bank a dividend yield of 4.71%. That’s decent, if not spectacular, by ASX banking standards.

    However, at last month’s all-time high CBA share price, those same dividends would give the company a new dividend yield of just 3.74%.

    Fortunately for CBA investors, the bank did raise its interim dividend for 2024. Investors enjoyed a rise from $2.10 to $2.15 a share. That would boost CBA’s dividend yield at that price to 3.78%.

    At the current share price of $119.15 (at the time of writing), our dividend yield is 3.82%.

    Now that’s nothing for a normal ASX 200 share to be ashamed of. But it’s certainly very low by ASX bank standards. To illustrate, CBA’s big four sibling ANZ Group Holdings Ltd (ASX: ANZ) shares are presently trading on a yield of 5.95%.

    Coles Group Ltd (ASX: COL), Telstra Group Ltd (ASX: TLS) and Transurban Group (ASX: TCL) all currently have higher yields than CBA. Not to mention the other three major banks.

    If a shareholder bought CBA shares years ago at a far better price than what they’re trading at today, they’re probably not too worried. But for any new CBA investors or those that want to add to their positions, this is certainly a consideration to bear in mind.

    The post Do CBA shares even pay a good dividend anymore? appeared first on The Motley Fool Australia.

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    Motley Fool contributor Sebastian Bowen has positions in Telstra Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Transurban Group. The Motley Fool Australia has positions in and has recommended Coles Group and Telstra 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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  • Buy this ASX 300 stock for a 28% gain and 7% dividend yield

    Smiling couple looking at a phone at a bargain opportunity.

    If you are on the lookout for a combination of big returns and great dividend yields, then look no further.

    That’s because analysts at Bell Potter believe one ASX 300 stock could deliver both over the next 12 months.

    The company in question is Accent Group Ltd (ASX: AX1).

    What is Accent Group?

    While its name may not be well-known, chances are you will have shopped at one of its many store brands in the past.

    Among the ASX 300 stock’s store brands are Article One, Glue Store, Hype DC, Nude Lucy, Platypus, Sneaker Lab, Stylerunner, and The Athlete’s Foot (TAF). It also holds licensing rights for brands such as Hoka, Timberland, Skechers, and Vans.

    Why is it an ASX 300 stock to buy?

    Bell Potter believes that Accent is well-positioned for growth. It commented:

    We remain constructive on AX1 given the scale & exposure in terms of channels, brands & size as the overall industry navigates a challenging retail spend environment in addition to growing a vertical brand strategy (~8% on owned sales) and growth adjacencies within TAF & via exclusive partnerships with globally winning brands as Hoka.

    The broker expects this to lead to earnings per share growth of 17.1% in FY 2025 to 15.5 cents and then 24.6% to 19.3 cents in FY 2026. This means that Accent’s shares are changing hands at just 12.5x estimated FY 2025 earnings and 10x estimated FY 2026 earnings.

    This is too cheap to ignore according to its analysts, which are tipping major upside potential for investors that buy in at current levels.

    Big returns on offer with Accent shares

    According to a recent note, the broker has a buy rating and $2.50 price target on the company’s shares.

    Based on the current Accent share price of $1.95, this implies potential upside of 28% for investors over the next 12 months.

    This means that a $10,000 investment would grow to be worth $12,800 this time next year if Bell Potter is on the money with its recommendation.

    But the returns won’t stop there. Accent is among the more generous dividend payers on the Australian share market and Bell Potter doesn’t expect this to change.

    Its analysts are forecasting fully franked dividends per share of 13 cents in FY 2024, 14.6 cents in FY 2025, and then 16.4 cents in FY 2026. Based on where the ASX 300 stock currently trades, this would mean dividend yields of 6.65%, 7.5%, and 8.4%, respectively.

    And as Accent’s interim dividend has already been paid, you would be looking at a ~7% dividend yield on a 12-month basis (FY24 final and FY25 interim).

    Overall, investors buying at current levels could generate a total annual return of approximately 35% if all goes to plan.

    The post Buy this ASX 300 stock for a 28% gain and 7% dividend yield appeared first on The Motley Fool Australia.

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    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 Accent 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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  • 3 essential ASX shares to buy for ‘Big Short’ legend’s next pick

    Male building supervisor wearing high vis vest and hard hat stands and smiles with his arms crossed at a building site

    Investing icon, Steve Eisman, is bullish on a specific segment of the share market. After doing my homework, I think the American investor is onto something. However, I’ve ‘Aussiefied’ the idea, with three ASX shares to buy if Eisman is right again.

    The Big Short film is almost a rite of passage for anyone fascinated by the world of investing. Steve Eisman — now managing director at Neuberger Berman — is one investor who successfully shorted the United States housing market.

    This time, Eisman is buying in an industry that rarely gets attention.

    Big Short’s Eisman eyes ‘turbocharged’ theme

    Speaking on the Bloomberg Odd Lots podcast, Eisman discussed where he sees an opportunity to make money in the current market.

    [youtube https://www.youtube.com/watch?v=kInoRDfNWHg?feature=oembed&w=500&h=281]

    Eisman described the investing landscape, asserting: “There are three, I think, great stories of our time right now, and those are: AI and everything having to do with it; infrastructure, and crypto. I believe in the first two, and I don’t believe in the third.”

    The conservation then focused on infrastructure, where the famed investor outlined four themes for boosting the industry over a decade, these being:

    • Onshoring i.e. local manufacturing: A consequence of the pandemic supply chain disruptions
    • Data centres: Increased electricity and cooling demand from more powerful GPUs
    • Grid improvement: Growing pressure on utility network from electrification
    • Greenification: The shift towards more renewable energy

    As Eisman puts it, these factors are then ‘turbocharged’ by the prolonged infrastructure policy drought, which is now being remedied by roughly US$1.2 trillion in government spending across the Inflation Reduction Act (IRA) and the Infrastructure Investment and Jobs Act (IIJA).

    In the podcast, Eisman says he’s widdled his list for infrastructure investments down to about 80 — only 30 of which are ‘very, very interesting’. Two companies mentioned but not held by Eisman include Eaton Corporation PLC (NYSE: ETN) and CRH PLC (NYSE: CRH).

    Which ASX shares to buy

    Don’t worry, I don’t have a list of 30 companies. Instead, I think three locally-listed businesses could capitalise on increased infrastructure development. Let’s hit this rapid-fire style — the company and my reason.

    James Hardie Industries Plc (ASX: JHX)

    The Dublin-headquartered building materials company has a local manufacturing presence in the United States, which could put it on the front foot as customers reduce their reliance on foreign suppliers. Furthermore, developed countries are contending with a housing shortage, generating a sizeable need for building materials.

    Monadelphous Group Ltd (ASX: MND)

    Monadelphous is a $1.3 billion construction engineering company featured in the S&P/ASX 200 Index (ASX: XJO). The company is well known for its contracted construction and maintenance work within the mining sector. However, Monadelphous is expanding into renewable developments, such as Tilt Renewable’s Latrobe Valley Battery Energy Storage System.

    IPD Group Ltd (ASX: IPG)

    A small-cap ASX share to buy, in my view, is IPD Group. This business is a central source for a wide range of electrical products. In its first half FY24 presentation, the company noted that 44% of its revenue came from commercial construction, 14% from infrastructure/industrial applications, and 5% from data centres.

    The post 3 essential ASX shares to buy for ‘Big Short’ legend’s next pick appeared first on The Motley Fool Australia.

    Wondering where you should invest $1,000 right now?

    When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    Scott just revealed what he believes could be the ‘five best ASX stocks’ for investors to buy right now. We believe these stocks are trading at attractive prices and Scott thinks they could be great buys right now…

    See The 5 Stocks
    *Returns as of 1 February 2024

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    Motley Fool contributor Mitchell Lawler 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 Ipd Group. The Motley Fool Australia has recommended Ipd 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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  • 10 ASX ETFs with the lowest management fees and why it matters

    Magnifying glass on ETF text next to a calculator and notepad.

    ASX exchange-traded funds (ETFs) provide an easy way of achieving great diversification in just one trade, and there are plenty to choose from on the market today.

    The simplest and most well-known are those that track the performance of indexes such as the S&P/ASX 200 Index (ASX: XJO) and the S&P 500 Index (SP: .INX) in the US.

    Other ASX ETFs track certain sectors, such as the Australian Resources Sector ETF (ASX: QRE) and VanEck Australian Banks ETF (ASX: MVB).

    Many ASX ETFs adopt certain strategies. For example, the top five Aussie shares ETFs for total returns in 2023 all had environmental, social, and corporate governance (ESG) strategies.

    All of these ASX ETFs have a manager running them and their fees depend on how much work is involved.

    You don’t have to do much to manage an index fund, for example.

    Every quarter the index is officially updated, and the ETF managers follow suit by adding or removing companies and rejigging the weightings in accordance with each company’s market capitalisation.

    This is all pretty simple but some ETFs charge more than others for this service.

    This is why it’s important to check the management expense ratio (MER) that an ETF charges before buying it.

    Bear in mind that ASX ETFs with strategies will generally charge higher fees.

    This is because the managers are selecting stocks on your behalf, which requires more skill and expertise.

    As a general rule, the lower the management fee the better because those fees eat into your returns.

    While past performance is no guarantee of future performance, it’s worth looking at the history of all the ASX ETFs you’re interested in and comparing the fees to determine which funds offer the best value.

    We reviewed more than 300 ASX ETFs listed on CommSec to find those with the lowest MERs.

    10 ASX ETFs with the lowest management fees

    BetaShares Global Sustainability Leaders ETF-Currency Hedged (ASX: HETH)

    The BetaShares Global Sustainability Leaders ETF-Currency Hedged invests in BetaShares Global Sustainability Leaders ETF (ASX: ETHI) with the currency exposure hedged back to the Australian dollar.

    ETHI invests in companies deemed to be ‘climate leaders’.

    The HETH ETF share price is currently $14.17, up 22.37% over the past 12 months.

    Over the past five years, it has risen 41.70%.

    MER: 0.03%.

    BetaShares Global Quality Leaders ETF-Currency Hedged (ASX: HQLT)

    The BetaShares Global Quality Leaders ETF-Currency Hedged invests in the BetaShares Global Quality Leaders ETF (ASX: QLTY) with the currency exposure hedged back to the Australian dollar.

    QLTY holds 150 global companies (ex-Australia) ranked in order of a quality score. The scores are based on a combined ranking of four key factors – return on equity (ROE), debt-to-capital, cash flow generation and earnings stability.

    The HQLT ETF share price is currently $29.42, up 28.58% over the past 12 months.

    Over the past five years, it has risen 49.49%.

    MER: 0.03%.

    VanEck MSCI International Value (AUD Hedged) ETF (ASX: HVLU)

    The VanEck MSCI International Value (AUD Hedged) ETF holds 250 international developed-market large-caps and mid-caps with high scores as calculated by MSCI and returns hedged into Australian dollars.

    The HVLU ETF share price is currently $27.42, up 14.49% since inception in November 2023.

    MER: 0.03%.

    VanEck MSCI International Small Companies Quality (AUD Hedged) ETF (ASX: QHSM)

    The VanEck MSCI International Small Companies Quality (AUD Hedged) ETF invests in 150 international developed-market small-cap quality growth shares with returns hedged into Australian dollars.

    The QHSM ETF share price is currently $30.08, up 26.02% since inception in November 2023.

    MER: 0.03%.

    Vanguard US Total Market Shares Index ETF (ASX: VTS)

    The Vanguard US Total Market Shares Index ETF is an index-based ETF that tracks the performance of the whole United States stock market, incorporating more than 3,700 American US companies.

    The VTS ETF share price is currently $389.92, up 27.68% over the past 12 months.

    Over the past five years, it has risen 87.89%.

    MER: 0.03%.

    BetaShares Australia 200 ETF (ASX: A200)

    The BetaShares Australia 200 ETF is an index-based ETF that tracks the performance of the ASX 200.

    The A200 ETF share price is currently $130.47, up 7.30% over the past 12 months.

    Over the past five years, it has risen 24.78%.

    MER: 0.04%.

    iShares S&P 500 ETF (ASX: IVV)

    The iShares S&P 500 ETF is an index-based ETF that tracks the performance of the 500 largest US companies comprising the S&P 500.

    The IVV ETF share price is currently $52.45, up 27.71% over the past 12 months.

    Over the past five years, it has risen 92.97%.

    MER: 0.04%.

    SPDR S&P/ASX 200 ESG (ASX: E200)

    The SPDR S&P/ASX 200 ESG invests in ASX 200 shares excluding companies involved in military contracting, small arms and tobacco, oil and thermal coal above a certain threshold.

    The E200 ETF share price is currently $24.82, up 4.99% over the past 12 months.

    It has risen 22.33% since its inception in August 2020.

    MER: 0.05%.

    iShares Core S&P/ASX 200 ETF (ASX: IOZ)

    The iShares Core S&P/ASX 200 ETF tracks the performance of the ASX 200 Accumulation Index.

    The IOZ ETF share price is currently $31.49, up 7.07% over the past 12 months.

    Over the past five years, it has risen 22.96%.

    MER: 0.05%.

    SPDR S&P/ASX 200 (ASX: STW)

    Launched in August 2001, the SPDR S&P/ASX 200 was Australia’s first listed ETF. It tracks the performance of the ASX 200 index.

    The STW ETF share price is currently $70.47, up 6.50% over the past 12 months.

    Over the past five years, it has risen 21.06%.

    MER: 0.05%.

    The post 10 ASX ETFs with the lowest management fees and why it matters appeared first on The Motley Fool Australia.

    Wondering where you should invest $1,000 right now?

    When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    Scott just revealed what he believes could be the ‘five best ASX stocks’ for investors to buy right now. We believe these stocks are trading at attractive prices and Scott thinks they could be great buys right now…

    See The 5 Stocks
    *Returns as of 1 February 2024

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    Motley Fool contributor Bronwyn Allen has positions in BetaShares Global Sustainability Leaders ETF and Vanguard Us Total Market Shares Index ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended iShares S&P 500 ETF. The Motley Fool Australia has recommended iShares S&P 500 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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  • Guess which ASX 300 stock popped on major shareholder buying the dip

    A woman shows a friend her new spiked heel shoes on a video chat.

    Warren Buffett’s long-standing sage advice is “to be fearful when others are greedy and to be greedy when others are fearful.” The third-largest holder of an ASX 300 stock is putting this advice into action by adding to its stash.

    Shares in Cettire Ltd (ASX: CTT) have taken a hit over the past month and a half. However, the falling share price has attracted the attention of US-based investment firm Cat Rock Capital. Undeterred by recent news, the investor ramped up its position in the online luxury fashion platform.

    Hungry for an ASX 300 stock at a discount

    On 6 March, The Australian Financial Review alluded to inadequacies in customs duties on goods. This prompted a sell-off in Cettire shares as shareholders grew concerned about any implications if there were any skeletons in the closet.

    Cettire quickly addressed the concerns in a release of its own. However, the damage control proved insufficient to prevent the Cettire share price from falling a further 16% over the time since, as shown below.

    More pressure mounted in the back half of March as additional information came to light.

    Once again, The AFR reported on a Texan resident in the United States and their experience with the luxury fashion business.

    In the article, Jane (a pseudonym) reveals how she noticed discrepancies between the duties paid at the online checkout and what the customs documentation showed. Namely, paying more to Cettire than what the courier invoiced.

    Moreover, the price of the goods disclosed to the courier was less (US$4600) than the actual purchase amount (US$6663).

    Despite these matters, according to today’s change in substantial holding notice, Cat Rock Capital has been loading up on this ASX 300 stock. The investment firm now holds a 10.44% position in Cettire, increasing by 4 million shares.

    Some of the largest buys occurred on 6 March — when the Financial Review‘s investigation landed — 11 March, 4 April, and 5 April.

    Not alone in buying the dip

    Cat Rock Capital is not the only party betting the pessimism is misplaced. As fellow Fool Sebastian Bowen covered last month, Wilson Asset Management (WAM) has been making the most of Cettire’s subdued sentiment — buying shares at every chance.

    Likewise, Bell Potter believes there’s nothing to be worried about at Cettire. The broker holds a $4.14 price target on the company’s shares, suggesting a 23% upside from the current price.

    The ASX 300 stock closed at $3.37, up 1.8% from yesterday. Although shares had reached a high of $3.55 earlier in the day.

    The post Guess which ASX 300 stock popped on major shareholder buying the dip appeared first on The Motley Fool Australia.

    Wondering where you should invest $1,000 right now?

    When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    Scott just revealed what he believes could be the ‘five best ASX stocks’ for investors to buy right now. We believe these stocks are trading at attractive prices and Scott thinks they could be great buys right now…

    See The 5 Stocks
    *Returns as of 1 February 2024

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    Motley Fool contributor Mitchell Lawler 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 Cettire. 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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