If I had $3,000 to invest in ASX blue-chip shares, I’d go for businesses with strong operations and a good long-term outlook.

I like companies that have a good market position and are able to keep expanding their footprint.

After looking at the biggest companies on the ASX, these two are among my favourites, along with Wesfarmers Ltd (ASX: WES) and Telstra Group Ltd (ASX: TLS).

Macquarie Group Ltd (ASX: MQG)

The business has four main segments: asset management, banking and financial services (BFS), commodities and global markets (CGM) and investment banking.

Macquarie generates around two-thirds of its earnings outside of the local economy, which implies the business has impressive geographic diversification.

The ASX blue-chip share has the flexibility to invest and expand in any division, wherever it sees opportunities across the world. That’s a big reason why, in my opinion, the Macquarie share price has been able to rise around 50% in the past five years.

While the short-term may not see strong operating profit growth, I think the business has a good long-term outlook. While the dividend yield isn’t huge, it can provide a useful bonus.

According to the estimates on Commsec, the Macquarie share price is valued at 17 times FY25’s estimated earnings and a partially franked dividend yield of 3.5%.

Coles Group Ltd (ASX: COL)

Coles is one of the largest supermarket businesses in Australia. We all need food, and Coles has a strong market position, including defensive earnings in my opinion.

Australia’s ongoing population growth is a useful boost for the ASX blue-chip share, as it can lead to more consumers buying from Coles.

The FY24 second half stated strongly – in the first eight weeks of the third quarter, supermarket revenue was up 4.9%, underpinned by volume growth. This growth was stronger than what Woolworths Group Ltd (ASX: WOW) achieved.

While expensive, I like that the company is investing heavily in advanced, automated warehouses which can help decrease operating costs and improve efficiencies once they’re all fully operational.

Long-term profit growth combined with a good dividend yield could be a winning combination for this ASX blue-chip share.

According to the estimates on Commsec, the Coles share price is valued at 20 times FY25’s estimated earnings.

The post 2 ASX blue-chip shares I’d buy with $3,000 right now appeared first on The Motley Fool Australia.

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• Here are the top five ASX 200 shares in Macquarie’s model growth portfolio
• $19 billion in ASX dividends is being paid out this week. Are you getting your share?
• 4 defensive ASX shares to own in a greedy market: Macquarie
• Buy Coles and this ASX 300 dividend share
• 2 things I’m waiting for before buying Coles shares

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 Macquarie Group and Wesfarmers. The Motley Fool Australia has positions in and has recommended Coles Group, Macquarie Group, Telstra Group, 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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It may surprise the average punter, but only $12,000 can send you on your way to receiving thousands of dollars of annual passive income.

Allow me to use reliable ASX dividend stock Woodside Energy Group Ltd (ASX: WDS) as an example.

Put a little bit on Woodside stock

Assume that you use your $12,000 to buy a batch of Woodside shares.

Currently 10 out of 17 analysts surveyed on broking platform CMC Invest reckons the ASX energy giant is a buy.

We all know past performance is never an indicator of the future. But just to demonstrate the power of compounding, let’s use the numbers we have.

Woodside shares currently hand out an excellent 7.1% fully franked dividend yield.

Then conservatively assume there will be zero capital gain in the coming years, and that the distributions are the only source of returns.

If you can keep those shares growing at 7.1% per year while adding in $400 monthly, chunky passive income is not too far away.

Then reinvest for 9 years

Nine years of that investment regime will see the nest egg grow to $79,981.

After that, instead of reinvesting the dividends, just put the cash in your bank account.

That means from that point you pocket an average of $5,678 of passive income each year.

How good is that!

The point of this hypothetical was to show how starting with just a small amount to invest can quickly grow to an income generating machine.

In reality, you will want to diversify your portfolio, rather than buy only Woodside shares.

Fortunately, there are plenty of excellent shares out there that can deliver you a 7% yield, or 7% growth — or even more.

And don’t forget, the above scenario was based on your shares not seeing any capital gains over those nine years.

If you manage the portfolio properly, that will also be unlikely.

Good luck out there.

The post Invest $12,000 in Woodside stock and get $5,700 in passive income appeared first on The Motley Fool Australia.

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

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On Wednesday, Block Inc (ASX: SQ2) shares continued their positive run and recorded another solid gain.

The payments company’s shares rose almost 2% to $128.96.

This is just the latest in a long run of gains that have been recorded by the Afterpay and Square owner, much to the delight of its shareholders after a long period of underperformance.

In fact, things have been so good in recent months, that Block shares have reached new two-year highs multiple times in the past few weeks thanks largely to a strong performance in the final quarter of 2023.

This means that if you had invested late last year, you would be laughing all the way to the bank now.

Investing $5,000 into Block shares

To demonstrate just how well Block shares have been performing recently, let’s take a look at what a $5,000 investment five months ago would be worth now.

At the end of October, I could have picked up Block shares at a multi-year low of $60.56.

This means that for an investment of $5,026.48, I could have bought 83 units.

If we now fast-forward to today, with Block shares changing hands for $128.96, those units have a market value of ~$10,700.

That’s a return on investment of approximately $5,700 or 113% in just five months.

Can its shares keep rising?

The team at Seaport Research in the United States is feeling very positive about the company.

It recently upgraded Block’s US listed shares to a buy rating with a US$95 price target.

Based on current exchange rates, this price target works out to be approximately $145.69 for the Cash App owner’s ASX listed shares. This suggests that its shares could still rise 13% from current levels.

The post If I’d put $5,000 in Block shares 5 months ago, here’s what I’d have now 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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When an S&P/ASX 200 Index (ASX: XJO) stock outperforms all and sundry one year but then suddenly dips, you need to at least check out what’s happening.

Neuren Pharmaceuticals Ltd (ASX: NEU) was the highest climber in the ASX 200 last year, gaining an insane 214% over the calendar year.

But a reality check has been delivered for investors this year, with an 18.6% tumble so far.

So what’s doing? Is this a bargain just waiting to be bought?

Why has Neuren become a cheap ASX stock?

Neuren develops treatments for rare neurological conditions. 

While it’s developing and testing future products, it already has a drug called Daybue on sale through its US licensee Acadia Pharmaceuticals Inc (NASDAQ: ACAD).

The analysts at Blackwattle explained in a memo that the main reason why Neuren shares have plunged in 2024 lies in this relationship.

“The underperformance resulted from a ‘short report’ released on Neuren’s US distributor, questioning the efficacy of NEU’s therapy and the retention rate of patients.”

The author of the report, Culper Research, claimed that Daybue has been “a total flop”.

“The sell-side sell calls for over $800 million in peak Daybue revenues, but our research suggests that Daybue new patient starts already topped this past summer, peak revenues will be a mere fraction of sell-side estimates, and Daybue’s flop will have knock-on effects as ACADIA remains a cash-burning machine.”

Ouch.

Should you buy Neuren Pharmaceuticals?

So is this a value trap or a golden opportunity to buy into a fast-growing company for dirt cheap?

Multiple Australian investment houses disagree with the short report.

The Blackwattle memo admitted the damaging claims have “impacted sentiment towards the stock” in the near term, but the short report is “at odds with trial data and the real-life experience of medical specialists, patients, and their carers”.

The team at the Elvest Fund is also keeping the faith.

“Our thesis for Neuren Pharmaceuticals is unchanged,” it said in its memo to clients.

“New CY24 Daybue sales guidance of US$370 to US$420 million (+120%) underpins another solid year of royalty and milestone revenue for Neuren.”

Broking platform CMC Invest shows unanimous agreement, with all six analysts surveyed there still rating the stock as a buy.

So it seems this “cheap” ASX stock could be a genuine bargain for those willing to hold on for the long run.

The post 1 secretly cheap ASX 200 stock I’m buying for the long run appeared first on The Motley Fool Australia.

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

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The Resmed CDI (ASX: RMD) share price has made an impressive recovery since its October 2023 depths. The medical equipment maker’s shares are up 41% from their lowest lows, crawling from $21.14 to their current $29.90 level.

It’s true, Resmed shares are not at the bargain basement prices they once were. Now trading on a price-to-earnings (P/E) ratio of 32 times FY2024 earnings, putting it on par with the global medical equipment industry average. There is hardly any upside from here, some might say…

I could be blowing some minds here. But I’m still invested in Resmed shares and expecting considerable gains to come.

Drug disruption overdone

A quick refresher. Resmed provides respiratory devices used to treat obstructive sleep apnea (OSA). It is suggested that around 70% of people suffering from OSA are obese. One would then assume the two are somewhat linked.

Then glucagon-like peptides (GLP-1) agonists came along — a medication found to reduce weight rapidly. People have flocked to the drug, with its promise of effortless weight loss with a single injection per week.

As it stands, some research indicates GLP-1s may improve sleep apnea. United States pharmaceutical giant Eli Lilly and Co (NYSE: LLY) is studying how its GLP-1 variant affects sleep apnea, with results anticipated in the coming months.

I’m speculating here, though, I suspect the drug will help reduce the severity of OSA but not eliminate it. Complete elimination might occur for those small numbers of people who experience minor sleep apnea to begin with.

This is supported by Resmed’s internal estimates, as shown above. Under the most impactful scenario, GLP-1s may reduce the global market opportunity in 2050 from 1.4 billion people to 1.2 billion.

My Resmed share price estimate

I believe Resmed is an exceptional company with quality products in a growing industry.

Although this company already looks large, the enormous market for sleep apnea devices provides a long runway for expansion. For this reason, it seems completely feasible — in my opinion — that Resmed continues to increase its revenue by 10% to 12% each year.

Based on this, I expect Resmed to generate A$9.34 billion in revenue in FY2027. Likewise, net profits after tax (NPAT) of A$1.96 billion seems achievable. That would peg the market capitalisation at A$41.46 billion at a reasonable P/E ratio of 28 times — approximately 18% above the current Resmed share price.

You might say, “But Mitchell, that is three years away…” And yes, you’re right. However, with connected devices expected to increase more than fourfold between now and 2050, I doubt the growth will stop there.

By FY2029, I think Resmed could pull in A$2.63 billion in after-tax profits. I believe a market cap of around $70 billion would be possible then. That would equate to about $47.80 for the Resmed share price.

The post Here’s why I think the Resmed share price should be 18% higher appeared first on The Motley Fool Australia.

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Motley Fool contributor Mitchell Lawler has positions in ResMed. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended ResMed. The Motley Fool Australia has positions in and has recommended ResMed. 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 post Here are the top 10 ASX 200 shares today appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Johns Lyng Group. The Motley Fool Australia has positions in and has recommended Smartgroup. The Motley Fool Australia has recommended Johns Lyng Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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I’m a big fan of ASX index fund investing. The inherent qualities of an index fund – mainly instant diversification and a guaranteed return at the rate of the market – make it a perfect investment for almost anyone in my view.

But thanks to the explosive growth in popularity of index investing in recent years, the ASX is now awash with index ETFs. As such, choosing one that works for you can get a little overwhelming. So today, I’m going to discuss three ASX index funds that I think are a buy today.

3 ASX index funds I’d happily buy today

iShares S&P 500 ETF (ASX: IVV)

To start off with, let’s discuss an ASX index fund endorsed by the legendary Warren Buffett himself. The S&P 500 Index is the most widely tracked and invested index in the world.

It is a barometer of the entire US stock market and represents the largest 500 companies listed on the American markets. That’s everything from Apple and Amazon to Coca-Cola and McDonald’s.

Warren Buffett has recommended an S&P 500 index fund as the perfect investment for “most people”, calling it a slice of America. I think this ASX index fund contains most of the world’s highest-quality companies. As such, it’s a no-brainer.

iShares MSCI Japan ETF (ASX: IJP)

This ASX index fund is a little exotic. It gives investors exposure to an index that reflects most companies on the Japanese stock exchange.

I think Japan houses some of the world’s best companies outside of the United States. Through this ETF, investors will gain exposure to the likes of Toyota, Nintendo, Sony, Honda, Softbank and Mitsubishi Heavy Industries.

In my view, this is a great investment for any Australian to consider, given the healthy diversification it can add to any portfolio. This ASX index fund has gained more than 30% over the past year. But I think there is plenty of upside going forward.

VanEck Australian Equal Weight ETF (ASX: MVW)

Finally, we have an unconventional investment to discuss. Most index funds on the ASX, including the most popular choices, are weighted by market capitalisation.

This means that the larger companies command more weight and influence within each fund than the smaller ones. It’s why a typical ASX fund is more heavily influenced by the movements of the Commonwealth Bank of Australia (ASX: CBA) share price than JB Hi-Fi Ltd (ASX: JBH).

As such, a normal ASX index fund is very heavily tilted towards the big four banks and the large miners like BHP Group Ltd (ASX: BHP) and Rio Tinto Ltd (ASX: RIO). That might be great for dividend lovers. But this doesn’t sit well with other investors. That’s where the VanEck Equal Weight ETF comes in.

Instead of giving the lion’s share of the ETF to the largest stocks, the index fund gives the largest 75 or so shares on the ASX equal treatment within the ETF. Because of this, CBA stock has just as much influence here as JB Hi-Fi shares.

This approach has worked well for this ETF in recent years. Current data shows MVW units outperforming a standard ASX 200 index fund over the last three years on average.

The post 3 top ASX index funds to buy now appeared first on The Motley Fool Australia.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Sebastian Bowen has positions in Amazon, Apple, Coca-Cola, and McDonald’s. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon, Apple, and iShares S&P 500 ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Nintendo. The Motley Fool Australia has recommended Amazon, Apple, Jb Hi-Fi, and 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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There are plenty of options for income investors to choose from on the ASX 300 index.

But which ones could be buys?

Three that come from different sides of the market and have been named as buys are listed below. Here’s what you need to know about them:

HomeCo Daily Needs REIT (ASX: HDN)

Morgans thinks that HomeCo Daily Needs could be an ASX 300 dividend share to buy. It is a property company with a focus on neighbourhood retail, large format retail, and health and services.

The broker has been pleased with the company’s shifting focus from large format retail to daily needs. It has an add rating and $1.37 price target on its shares.

As for dividends, Morgans is forecasting dividends per share of 8 cents in FY 2024 and then 9 cents in FY 2025. Based on the current HomeCo Daily Needs share price of $1.26, this will mean dividend yields of 6.3% and 7%, respectively.

Orora Ltd (ASX: ORA)

Analysts at Goldman Sachs think this packaging company could be an ASX 300 dividend share to buy. The broker likes Orora due to its defensive qualities and positive growth outlook.

Goldman currently has a buy rating and $3.40 price target on its shares.

In respect to income, the broker has pencilled in dividends per share of 13 cents in FY 2024 and 14 cents in FY 2025. Based on the current Orora share price of $2.67, this will mean yields of 4.9%, 5.2%, and 5.3%, respectively.

Rural Funds Group (ASX: RFF)

A third ASX 300 dividend share that could be a buy is agricultural property company Rural Funds.

Bell Potter is a fan of the company and sees plenty of value in its shares at current levels. The broker has a buy rating and $2.40 price target on its shares.

As for dividends, Bell Potter is forecasting dividends per share of 11.7 cents in both FY 2024 and FY 2025. Based on the current Rural Funds share price of $2.08, this will mean yields of 5.6% for investors in both years.

The post 3 ASX 300 dividend shares to buy in April 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 positions in and has recommended Rural Funds Group. The Motley Fool Australia has recommended HomeCo Daily Needs REIT and Orora. 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 are looking for portfolio additions, you might want to see the ASX 200 shares that analysts at Macquarie are recommending right now.

The broker has a model portfolio which it believes represents a starting point to form a portfolio with growth characteristics.

Listed below are the top five holdings in the model portfolio at present:

Goodman Group (ASX: GMG)

Taking the top spot in the model portfolio with a weighting of 8.8% is industrial property giant Goodman. Macquarie currently has an outperform rating and $34.84 price target on its shares. It is forecasting earnings per share growth of 12.4% in FY 2025.

Aristocrat Leisure Limited (ASX: ALL)

In second spot in the portfolio with a weighting of 8.1% is this gaming technology company. Macquarie has an outperform rating and $48.50 price target on the ASX 200 growth share. Its analysts believe the company’s earnings per share will increase by 9.4% in FY 2024.

CAR Group Limited (ASX: CAR)

Next in line is the company formerly known as Carsales, CAR Group. Macquarie has the auto listings company in its model portfolio with a 7.5% weighting. However, it is worth noting that the broker only has a neutral rating and $32.70 price target on its shares at present. This price target is lower than where its shares trade today.

NextDC Ltd (ASX: NXT)

This data centre operator is in the broker’s model growth portfolio with a 7.1% weighting. Macquarie currently has an outperform rating and $20.00 price target on this ASX 200 share.

CSL Limited (ASX: CSL)

Rounding out the top five in Macquarie’s model portfolio is this biotherapeutics giant with a weighting of 7.3%. Macquarie currently has an outperform rating and $310.00 price target on its shares. It expects earnings per share growth of 11.1% in FY 2024.

The post Here are the top five ASX 200 shares in Macquarie’s model growth portfolio appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in CSL and Nextdc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL, Goodman Group, and Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool Australia has recommended CSL, Car Group, and Goodman Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The BHP Group Ltd (ASX: BHP) share price kicked off the week with some strength, closing up 0.2% on Monday.

But shares in the S&P/ASX 200 Index (ASX: XJO) iron ore miner gave up those gains and then some yesterday, closing down 0.6% at $43.62 apiece.

In early afternoon trade today, the BHP share price is down 0.3% at $43.47.

That sees the ASX 200 mining stock down 13.8% since the closing bell rang on 2023. That compares to a 2.8% gain posted by the ASX 200 over this same period.

Here’s why the miner has come under selling pressure again today.

Headwinds from the Middle Kingdom

BHP derives the bulk of its revenue from digging up and processing iron ore.

Copper comes in at number two.

If you have a look at how those two base metals are performing, it explains a lot of the pressure we’re seeing on the BHP share price.

Iron ore futures dropped 4.2% overnight to US$104.05 per tonne. On Friday, the steel-making metal appeared to be in recovery mode, trading for US$109.15. Though that remained well below the US$144 that same tonne was trading for on 2 January.

Copper has retraced as well, down 2.5% since Monday. The red metal is currently trading for US$8,862 per tonne. However, in copper’s case, that’s up 3.8% in 2024 from US$8,545 per tonne on 2 January.

The headwinds hitting base metal prices and the BHP share price are once again blowing out of China.

Last week’s iron ore rebound was driven by expectations of a pick up in growth from the world’s number two economy and Australia’s top export market.

This week, the market looks to be having its doubts as to the likelihood that China’s struggling, steel hungry property sector has turned the corner.

Investors are still awaiting increased stimulus measures from the Chinese government. But it remains uncertain if those will materialise.

Commenting on the metals markets, Wei Ying, an analyst at China Industrial Futures, said (quoted by The Australian Financial Review), “Investors are very cautious about the demand outlook. Prices fall whenever there are signs of demand weakness.”

She noted that Chinese steel trading volumes had slipped again.

Jiang Hang, head of trading at Yonggang Resources, added:

The rally in base metals prices has gone ahead of real demand. Chinese demand has been badly hit after prices rose, especially copper.

Now what?

While the future is inherently uncertain, the sell-off in the BHP share price so far in 2024 could offer an opportune entry point.

Commenting on the iron ore price outlook last week, Australia and New Zealand Banking Group Ltd (ASX: ANZ) analysts Daniel Hynes and Soni Kumari said:

Iron ore prices may be near a floor amid a reset in expectations around [China’s] demand. Weak consumption from the property sector is being countered by robust demand from other sectors.

Atop a potential share price rebound following this year’s sell-down, BHP shares trade on a fully franked dividend yield of 5.4%.

As always, whether you’re looking at buying BHP or any other ASX stock, make sure to do your own extensive research first. If you’re uncomfortable with that or just short on time, then reach out for some expert advice.

The post Down 14% in 2024, why is the BHP share price sliding again today? appeared first on The Motley Fool Australia.

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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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