The Fortescue Metals Group Ltd (ASX: FMG) share price is up 0.9% in Friday morning trade.

The S&P/ASX 200 Index (ASX: XJO) iron ore stock closed yesterday at $20.43. Shares are currently trading for $20.51 apiece.

For some context, the S&P/ASX 200 Resource Index (ASX: XJR) is down 0.03% at this same time.

What’s happening on the green iron front?

The Fortescue share price is marching higher amid news that the ASX 200 miner’s green arm, Fortescue Future Industries (FFI), has made a big step forward in producing ‘green iron’.

Some 6% of global carbon emissions are estimated to come from the conversion of iron ore into iron using traditional methods reliant on coal. Newer technologies are also trialling the use of hydrogen.

But the novel process developed by a team of FFI scientists at a pilot plant in Western Australia just turned iron ore into iron (or ‘green iron’ if you prefer)

As The Australian Financial Review reports, the still-veiled process is electrochemical.

Research breakthrough

Last month, Fortescue CEO Andrew Forrest alluded to the work being carried out by the FFI research team, calling it a “major breakthrough”.

Forrest said, “It uses a membrane”. As for Fortescue’s competitors, he added, “They’re going to have to come and talk to us if they want to borrow the membrane.”

However, FFI’s scientists said the successful test production of green iron was more about the 100 different innovations they’d developed and put together than the membrane.

“Essentially, it is all bespoke. You couldn’t go to Bunnings and buy part x, y, z because this process didn’t exist,” an FFI scientist said.

Of course, FFI’s test production of 150 kilograms is a far cry from producing emissions-free iron on a commercial scale.

“150 kilograms is better than it being a science project, but it’s not scale … so early days. It’s still going to take a lot of work to scale it, but this is part of our journey,” FFI CEO Mark Hutchinson said.

What could it mean?

Should that journey prove successful and commercially viable, it could have a big impact on keeping the lid on global warming. Future success could also offer some heady tailwinds for the Fortescue share price.

According to Hutchinson (quoted by the AFR), the Pilbara situated pilot plant would be the ideal place to make it all happen:

When you start to scale it to say 100,000 tonnes, there is an enormous amount of renewable energy you need to do it.

If there’s anywhere you could do it, it is the Pilbara because you have the opportunity to build massive scale renewable energy that could convert iron ore to iron, and then you basically sell the decarbonised chips to China.

Fortescue share price snapshot

As you can see in the chart below, the Fortescue share price has had a good run over the past 12 months, up 9%.

The post Fortescue share price marching higher amid green iron ‘major breakthrough’ appeared first on The Motley Fool Australia.

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• Why did the Fortescue share price slide today?
• How big will the Fortescue dividend be in 2024?
• Guess which ASX All Ords mining share Fortescue’s Twiggy Forrest is eyeing off for $760m
• Is the Fortescue share price a buy at $21?
• How to generate $10,000 of passive income from Fortescue shares

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

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Today is a big day for Pilbara Minerals Ltd (ASX: PLS) shareholders.

That’s because on Friday, the lithium giant will be rewarding them with its maiden dividend.

The Pilbara Minerals dividend

Late last year, the company unveiled its capital management framework which revealed that it now aims to pay out 20% to 30% of its free cash flow to shareholders.

Management believes that this is a nice balance and leaves it with enough free cash flow to maintain safe and reliable operations, as well as support growth and productivity initiatives.

This ultimately led to Pilbara Minerals declaring its maiden dividend last month when it released its half-year results.

The company’s board elected to reward its shareholders with an 11 cents per share fully franked interim dividend. In line with its capital management framework, this represents a 30% free cash flow payout ratio. It is also the equivalent of a $329.8 million return.

After going ex-dividend at the start of this month, this dividend will be hitting the bank accounts of eligible shareholders at some point today.

What’s the yield on this dividend?

Based on the current Pilbara Minerals share price of $3.50, this 11 cents per share dividend represents a very attractive 3.15% fully franked yield.

And let’s not forget that there’s likely to be a final dividend that follows later this year, stretching the yield further.

Goldman Sachs, for example, is forecasting a fully franked full-year dividend of 25 cents per share. This will mean a 14 cents per share final dividend and a full-year yield of 7.15%.

It is also worth noting that Goldman sees plenty of upside in the Pilbara Minerals share price. Although it only has a neutral rating, its price target of $4.90 is 40% higher than current levels.

The post The first-ever Pilbara Minerals dividend is being paid today. Here’s what to expect appeared first on The Motley Fool Australia.

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• 5 things to watch on the ASX 200 on Friday
• Buy Pilbara Minerals and this exciting ASX growth share: analysts
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• Why is the Pilbara Minerals share price sliding today?
• Investing in ASX 200 lithium shares? You’ll want to read this

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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All of us want our stock picking to produce superior returns to the S&P/ASX 200 Index (ASX: XJO). If this wasn’t the objective, then an index-based exchange-traded fund (ETF) would be all we’d need in an investment portfolio.

Over the past 20 years, the Australian benchmark has delivered an 8.1% per annum return. There’s certainly no shame in being satisfied with such a performance. It still blows the socks off a savings account and pips the hottest rate of inflation we’ve witnessed in more than 30 years.

However, if you’re like me and have an insatiable appetite for finding the best companies that money can invest in, I believe there are a few investing parables worth inscribing on your mind.

There’s a lot of information out there in the world. Not all of it is worth listening to, while some of it bears repeating again and again. It is knowledge imparted by those far more experienced than I that can be instrumental in successfully building wealth.

So, here are three valuable lessons to help outperform the ASX index over the next decade (or more).

Simple and strong companies can survive ineptitude

The first lesson is one I was reminded of recently while listening to the annual shareholders’ meeting of a major London-based investment company known as Fundsmith.

While perhaps not as well-known as Warren Buffett, Fundsmith CEO and founder Terry Smith applies similar principles to investing and is a success in his own right.

During the meeting, Smith explained a mantra that his fund operates by, stating:

Always invest in businesses that can be run by an idiot, because sooner or later they all are.

It’s fairly self-explanatory. Companies often experience changes in leadership. To lessen the risk posed by careless management, pick businesses that are simple to run and have a strong foundation.

The original quote was shared by Buffett many years ago. Yet, the crux of the statement still rings true today and likely will remain so into the future.

You won’t beat the ASX index by overpaying

Generosity is praised in many aspects of life. Though, gratuity won’t do you any favours when attempting to outperform the benchmark.

In a 2012 fund manager letter, Peter Kinney of Kinsale Capital Management shared his own investment philosophy. One of the cornerstone tenets described was the notion of never overpaying for a company. He called it ‘the margin of safety’.

The price I pay for a company is one of the few things I can control as a minority shareholder.

Peter Kinney, portfolio manager Kinsale Compass Fund

In true value-investing fashion, Kinney wrote that he required at least a 50% discount on what he believed was the company’s intrinsic value. Doing so removed the need for extensive diversification as a risk management strategy.

How’d it work out for Kinney? Well, three out of the fund’s top five holdings at that time (11 years ago) were Microsoft Corp (NASDAQ: MSFT), Sartorius Stedim Biotech SA (EPA: DIM), and Nakanishi Inc (TYO: 7716).

Safe to say, those were some ASX index-beating investments…

A key trait of a serial compounder

So, you’ve spotted a company that is well-established, simple, and trading at a considerable discount — surely that is enough. Well, not quite… don’t forget to check for pricing power.

It wouldn’t be a summary of investing lessons without a Buffett quote. As the Oracle of Omaha has said before:

The single most important decision in evaluating a business is pricing power. If you’ve got the power to raise prices without losing business to a competitor, you’ve got a very good business.

In other words, to beat the ASX index, you want companies that hold such a strong customer attraction that price rises don’t put a dent in demand. This pricing power can take shape as a monopoly, strong brand, technical excellence, patented technology, etc.

If you want to find ASX shares with pricing power, look for companies that have been able to sustain growth through difficult economic periods.

The post 3 timeless lessons for beating the ASX index over the next decade appeared first on The Motley Fool Australia.

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• Why is the Weebit Nano share price sinking 12% today?
• Medibank share price slumps as tech boss announces departure
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• Looking to bag the bolstered Soul Patts dividend? Here’s what you need to know
• Dividend yields over 10%! Cheap ASX shares I’d buy for passive income

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 Microsoft. 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 Medibank Private Ltd (ASX: MPL) share price is down in the dumps this morning amid news the health insurance provider’s tech boss has announced his retirement.

Right now, the Medibank share price is down 1.55%, trading at $3.18.

For comparison, the S&P/ASX 200 Index (ASX: XJO) is also in the red, falling 0.44%.

Let’s take a closer look at the latest news from the Aussie health insurance giant.

Medibank tech executive to hang up their hat

The Medibank share price is tumbling on Friday. Its suffering comes amid news the company’s technology and operations executive John Goodall will retire next month.

Goodall has overseen the company’s technology, property, procurement, and operations since December 2016.

His retirement comes just months after Medibank suffered a major cyber-attack, resulting in a $26.2 million bill.

The company is now on the hunt for a new tech executive, looking both inside the business and externally for the right candidate.

In the interim, current senior executive for core Medibank customer systems, Kylie Williamson will take on the role. She has more than 30 years of tech experience.

Commenting on Goodall’s retirement, CEO David Koczkar said:

I want to take this opportunity to thank John for his significant contribution to our business over the past six years and we all wish him well in his retirement.

The Medibank share price isn’t alone in the red today. The company’s home sector – the S&P/ASX 200 Financials Index (ASX: XFJ) – is down 0.87% at the time of writing.

Medibank share price snapshot

The Medibank share price has outperformed the broader market in recent months despite facing plenty of turbulence.

The stock has gained 9% so far this year. It’s also trading 4% higher than it was this time last year.

Meanwhile, the ASX 200 is trading flat year to date and has dropped 6% since this time last year.

The post Medibank share price slumps as tech boss announces departure appeared first on The Motley Fool Australia.

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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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The Weebit Nano Ltd (ASX: WBT) share price has returned from its trading halt and sunk deep into the red.

In morning trade, the semiconductor company’s shares are down 12% to $4.89.

Why is the Weebit Nano share price sinking?

The weakness in the Weebit Nano share price has been driven by the company undertaking and completing an institutional placement.

According to the release, the company has raised $45 million via fully underwritten institutional placement at a 9.7% discount of $5.00 per new share.

Management advised that the proceeds of the offer will fund the further development and commercial roll-out of Weebit Nano’s ReRAM technology. It also expects it to support further development to solidify its competitive advantages in both the embedded and discrete markets.

In addition, management notes that the funds will allow Weebit Nano to capitalise on the significant opportunities within the Non-Volatile Memory (NVM) market as it progresses its commercialisation strategy with leading global foundries and potential customers.

The company will now seek to raise a further $10 million from retail investors at the same price via a share purchase plan.

Management commentary

Weebit Nano’s CEO, Coby Hanoch, commented:

The strong level of support shown by new and existing sophisticated and institutional investors in Australia and offshore reflects our technical progress over the past year and the significant market opportunities for our proven innovative memory technology. We are delighted to welcome new institutional investors to our register from Australia and offshore, and take great pride that these experienced technology investors are supporting Weebit’s ground-breaking technology.

Hanoch appears optimistic that the funds raised will be a big boost to its future plans. He adds:

Our first ReRAM product is now available to customers through SkyWater Technology, and we are in advanced discussions with most of the world’s leading fabs and integrated device manufacturers. Funds raised, combined with our strong balance sheet of approximately $45 million cash at the end of December 2022, ensure we are well-placed to transfer and qualify our ReRAM technology in Tier-1 fabs and foundries to capitalise on the growing global need for faster, better performing memory technology. Our ReRAM has already demonstrated it is able to scale to smaller geometries for more advanced applications, and has significant competitive advantages over both the existing memory technology and other emerging players.

Time will tell if this is another meme stock like Brainchip Holdings Ltd (ASX: BRN), or something with more substance.

The post Why is the Weebit Nano share price sinking 12% today? 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 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 Block Inc (ASX: SQ2) share price is on course to end the week on a very disappointing note.

In morning trade, the payments company’s shares are down 15.5% to $91.99.

Why is the Block share price crashing?

Investors have been selling down the Block share price on Friday after the company was the subject of a short seller attack from Hindenburg Research.

Hindenburg Research was the short seller behind the recent Adani Group attack.

It has now turned its attention to Block, alleging that its key Cash App business has inflated user metrics, facilitates fraud, and lacks strong compliance controls.

What is being said?

After a two-year investigation, the research firm claims to have found that Block systematically took advantage of demographics it was said to be helping. It summarises:

Our 2-year investigation has concluded that Block has systematically taken advantage of the demographics it claims to be helping. The “magic” behind Block’s business has not been disruptive innovation, but rather the company’s willingness to facilitate fraud against consumers and the government, avoid regulation, dress up predatory loans and fees as revolutionary technology, and mislead investors with inflated metrics.

Inflated user metrics

In respect to its user metrics, Hindenburg Research believes the company is “wildly” overstating its numbers. It commented:

Most analysts are excited about the post-pandemic surge of Block’s Cash App platform, with expectations that its 51 million monthly transacting active users and low customer acquisition costs will drive high margin growth and serve as a future platform to offer new products.

Our research indicates, however, that Block has wildly overstated its genuine user counts and has understated its customer acquisition costs. Former employees estimated that 40%-75% of accounts they reviewed were fake, involved in fraud, or were additional accounts tied to a single individual.

Its analysts suggest that this has been driven by its focus on the underbanked. It adds:

Core to the issue is that Block has embraced one traditionally very “underbanked” segment of the population: criminals. The company’s “Wild West” approach to compliance made it easy for bad actors to mass-create accounts for identity fraud and other scams, then extract stolen funds quickly.

Hindenburg did some tests to see how easy it was to create fake accounts. Unfortunately, it was far easier than you would hope. It commented:

To test this, we turned our accounts into “Donald Trump” and “Elon Musk” and were easily able to send and receive money. We ordered a Cash Card under our obviously fake Donald Trump account, checking to see if Cash App’s compliance would take issue—the card promptly arrived in the mail.

What now?

As things stand, Block has not responded to the 50-page short seller report.

Until it does respond and disprove these allegations, it seems quite likely that the Block share price will remain under pressure. Let’s hope a response comes soon!

The post Block share price crashes 15% after scathing short seller attack 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 Block. The Motley Fool Australia has positions in and has recommended Block. 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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Washington H Soul Pattinson and Co Ltd (ASX: SOL) could be the market’s most consistent dividend share.

Not only is it the only All Ordinaries Index (ASX: XAO) stock to have paid a dividend every year since listing (way back in 1903, I might add), but it’s also grown its offerings every year for the last 23 years.

And the investment house kept its track record alive yesterday when it declared a 36 cent per share interim dividend. That marked a 24% jump on that of the prior comparable period.

No doubt the news piqued the interest of many passive income investors. So, without further ado here are all the need-to-know details regarding the S&P/ASX 200 Index (ASX: XJO) staple’s upcoming payout.

The Soul Patts share price last traded at $28.91.

All the details on Soul Patts’ record interim dividend

The Soul Patts share price jumped 1.3% on Thursday after the company declared a 36-cent per share interim dividend – a new record for its kind.

The offering will be fully franked, meaning it could bring tax benefits to some investors.

The ASX 200 share will trade ex-dividend on 19 April with the payout hitting bank accounts from 12 May.

Investors need to be on board the stock before its ex-dividend date in order to qualify to receive the dividend.

The company pays dividends out of its net cash flows from investments. They jumped 35% last half to reach $246.5 million on higher dividends from its strategic portfolio and contributions from Milton.

Looking longer-term, those holding Soul Patts shares have seen their interim dividends realise a compound annual growth rate (CAGR) of 9% over the last two decades.

In that time, the investment house has brought about a total shareholder return of 12.3% per annum.

Considering its newly declared interim dividend and its recent final dividend, Soul Patts shares currently offer a 2.73% dividend yield.

The ASX 200 giant will likely reveal its next final dividend alongside its full year earnings in late September.

The post Looking to bag the bolstered Soul Patts dividend? Here’s what you need to know appeared first on The Motley Fool Australia.

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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 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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In my view, a few sectors have been oversold in the last 18 months. That leads me to believe that there are cheap ASX shares, which could also be payers of huge dividend yields. A few could deliver a passive income of more than 10%.

I think the retail sector can be a hunting ground for finding beaten-up opportunities. There are plenty of retailers that are likely to see cyclical demand over the years. If we use periods of market distress to pick up ASX retail shares that are down heavily, they could be among the ones that rebound nicely in the medium term.

Sometimes share prices seem to be heavily focused on the next 12 months or so, not on the longer-term potential. I think this opens up the opportunity to find names that can do well for investors.

Dusk Group Ltd (ASX: DSK)

The ASX share describes itself as a retailer of home fragrance products, selling Dusk-branded products which are designed in-house and exclusive to Dusk. It claims to become the Australian leading retailer of home fragrance products. It sells a number of different products like candles, ultrasonic diffusers, reed diffusers, essential oils and fragrance-related homewares.

Over the past year, the Dusk share price is down around 40%. Commsec numbers suggest that Dusk could generate earnings per share (EPS) of around 20 cents in FY23. This would represent a large profit decrease from FY22. However, it suggests that Dusk shares are currently valued at less than 8 times FY23’s estimated earnings.

On top of that, Dusk had net cash of $32.9 million on its balance sheet at the end of the FY23 first half. According to the ASX, its market capitalisation is currently $93 million, so it looks even cheaper when taking that into account.

In terms of the dividend, it’s expected to be 14 cents per share in FY23 and then rise in FY24 and FY25. At the current Dusk share price, the grossed-up dividend yield could be 13.3%. But that’s just an estimate of the potential passive income.

Ongoing store openings could lessen the effect of any decline in same store sales for the ASX share in FY23 and FY24.

Adairs Ltd (ASX: ADH)

Adairs sells furniture and homewares through its three businesses of Adairs, Mocka and Focus on Furniture. While Mocka is an online-only brand, there are plans to sell its furniture in stores, which would be a useful synergy between its business.

The Adairs share price has fallen over 30% from 1 February 2023, which has boosted the forward dividend yield.

Commsec estimates currently indicate that the FY23 annual dividend per share could be 16.5 cents, with dividend increases expected in FY24 and FY25. The FY23 payout translates into a grossed-up dividend yield of 11.7%. That’s a lot of passive income, even at a lower level.

While there may be uncertainty about household demand, I think Adairs’ plans to upsize its stores and grow the store network of Focus on Furniture will help improve the profitability of the business. So, I believe that Adairs’ earnings can hold up fairly well in this period.

In FY23, the ASX share’s EPS is expected to be 26.8 cents, putting the Adairs share price at under 8 times FY23’s estimated earnings as well.

The post Dividend yields over 10%! Cheap ASX shares I’d buy for passive income 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 positions in and has recommended Adairs. The Motley Fool Australia has positions in and has recommended Adairs. The Motley Fool Australia has recommended Dusk 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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Did you buy Woolworths Group Ltd (ASX: WOW) shares in March 2018 and hold onto them? If so, pat yourself on the back – your investment has outperformed the market so far.

The Woolworths share price has gained a whopping 66% over the last five years – rising from around $22.48 to trade at $37.37 at Thursday’s close.

That means a $10,000 investment back then would have bought 444 Woolworths shares. That parcel would be worth $16,592 today.

Meanwhile, the S&P/ASX 200 Index (ASX: XJO) has lifted around 20%.

And that’s all before we consider the dividends on offer from the supermarket operator in that time.

How much have Woolworths shares paid in dividends in 5 years?

Take a look at all the dividends paid to those holding Woolworths shares since March 2018:

Those invested in Woolworths shares over the last five years have likely realised $4.99 of dividends per stock owned in that time.

That means our figurative $10,000 parcel has probably yielded around $2,215.56 of passive income, supporting a notable total return on investment (ROI) of 88%.

And, of course, Woolworths shareholders received one Endeavour Group Ltd (ASX: EDV) stock for each Woolies security held when the supermarket giant divested the business in 2021.

Not to mention, had a shareholder reinvested their dividends, they likely would have realised some impressive compound gains.

Considering all the offerings paid by Woolworths over the last 12 months, the share boasts a 2.46% dividend yield right now. The company will pay out its next dividend – worth 46 cents per share – in April.

The post Did you buy $10,000 of Woolworths shares in 2018? If so, here’s how much passive income you’ve banked appeared first on The Motley Fool Australia.

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• Give yourself a passive income boost with these growing ASX 200 dividend shares: analysts
• ‘Increased confidence’: Alphinity reveals 2 ASX 200 shares it just bought
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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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If you’re looking for big potential returns, then look no further. Goldman Sachs has recently slapped buy ratings on the two ASX 200 shares listed below with price targets materially higher than current levels.

Here’s what the broker is saying about them:

Allkem Ltd (ASX: AKE)

The first ASX 200 share that Goldman Sachs has named as a buy is Allkem. It is one of the world’s largest lithium miners and the result of the merger between Galaxy Resources and Orocobre in 2021.

From its projects across Argentina, Australia, and North America, the company is aiming to grow its production in a way that allows it to maintain a 10% share of global lithium supply over the long term.

It is this production growth, as well as its downstream optionality, that makes Goldman a fan of Allkem even when it is bearish on lithium prices. It commented:

Allkem has one of the best production outlooks in our lithium coverage, with broad-based growth optionality, second only to Mineral Resources on an LCE basis when including downstream hydroxide production on an equity basis. This drives our forecast for the company’s equity LCE production growth of >4x by FY27E, supporting earnings rebounding to near current record levels despite the declining lithium price environment.

Goldman currently has a buy rating and $15.40 price target on its shares. Based on the current Allkem share price of $9.99, this implies potential upside of 54% for investors.

Life360 Inc (ASX: 360)

Another ASX 200 share that Goldman Sachs is bullish on is Life360. It is a growing location technology company that has close to 50 million global active users of its eponymous Life360 mobile app.

Its shares have been hammered over the last 12-18 months due to the market’s aversion to loss-making tech stocks. However, with the company on the verge of becoming profitable, Goldman appears to see now as a great time to pounce on its shares.

Particularly given its impressive performance and its strong growth potential, which it feels is underappreciated by the market. The broker commented:

Life360 is executing well on its pricing strategy as the company moves to a profitable growth model, and we believe management’s targets regarding underlying/statutory EBITDA margin expansion should help the market quantify the operating leverage we believe Life360 can generate in coming years. The company is well capitalised, will be cash flow positive from 2Q23, and stands to generate significant earnings growth in coming years; all of which look underappreciated by the market as implied by the current share price at ~2x NTM EV/sales.

Goldman has a buy rating and $7.85 price target on its shares. Based on the current Life360 share price of $5.05, this suggests potential upside of 55% over the next 12 months.

The post Buy these ASX 200 shares for 50%+ returns: Goldman Sachs appeared first on The Motley Fool Australia.

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More reading

• Investing in ASX 200 lithium shares? You’ll want to read this
• Why are ASX lithium shares sinking today?
• What was with ASX lithium shares today?
• Allkem share price can jump 45% even if lithium prices fall: Goldman Sachs
• These ASX lithium shares are a buy despite explosive supply forecast: UBS

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