At face value, finding the best ASX dividend shares seems easy. You just do some research, find the companies with the highest dividend yields, and start making passive income. Easy, right?

Well, good dividend investing isn’t that simple. And in fact, following this ‘chasing yields’ path is probably a bad idea. Actually, it’s a horrendous idea – and one that will probably result in mediocre dividend income, while perhaps giving you some nice capital losses.

See, the dividend yields that we normally see quoted for ASX shares are a reflection of the dividends a company has paid out in the past, not what it will pay out in the future. Take what used to be a popular dividend share, AGL Energy Limited (ASX: AGL).

What does an ASX dividend trap look like?

In 2022, AGL paid out two dividends, one worth 16 cents per share, and one worth 10 cents per share. Using the AGL share price of $8.07 that the company ended 2022 at, those two dividends would have given AGL a dividend yield of 3.22%. That’s because 26 cents is 3.22% of $8.07.

Today, the AGL share price is going for $6.89 at the time of writing. That should in theory increase AGL’s dividend yield because 26 cents is 3.22% of $8.07, but 3.77% of $6.89. If AGL paid out the same 16 cents per share interim dividend in 2023 as it did in 2022, this would be true.

The problem is that last month, AGL announced its interim dividend would come in at 50% of 2022’s levels – yep, just 8 cents per share.

As such, AGL’s dividend yield is now 2.61%. So any investor who bought AGL shares a month or two ago expecting a dividend yield of 3.22% or 3.77% has now been caught in a classic dividend trap.

They’ve lost the yield they thought might be coming their way. And, they’ve had to endure AGL shares’ near-15% drop in value over 2023 thus far.

Everyone in the share market loves a good dividend. So when you see a company offering a dividend yield of 8, 9 or even 10%, it should tell you that investors are staying away for a reason.

Let’s take a high-yield example now.

WAM Capital Ltd (ASX: WAM) is a listed investment company on the ASX. It paid out two dividends last year, both worth 7.75 cents per share each. That’s an annual total of 15.5 cents per share, giving WAM Capital a whopping dividend yield of 9.2% right now.

So why isn’t everyone flocking to WAM Capital shares for that kind of return and thus increasing WAM Capital’s share price and reducing its yield down to a more normal level?

Well, investors are being put off by something.

High yield doesn’t mean high return

It might be this company’s performance track record. Even though this listed investment company (LIC) is yielding a massive figure right now, shareholders have only enjoyed a return of 3.7%, an average over the past three years (as of 31 January)

That means that capital losses have more than offset this high dividend yield. And that’s without accounting for WAM Capital’s 1% per annum management fee either.

Investors would have been far better off investing in an index fund than this company over the past three or five years. What’s more, as of 31 January, this company only had 14.7 cents per share in its profit reserve. Yet last year it paid out 15.5 cents per share in dividends.

So no wonder its dividend yield is so high – the market clearly has doubts over this company’s future performance potential.

Compare that to an ASX dividend share like Washington H. Soul Pattinson and Co Ltd (ASX: SOL). On the surface, Soul Patts’ current dividend yield of 2.8% doesn’t look that impressive. But this figure hides much.

It hides how Soul Patts has increased its dividend every single year since 2000, averaging an 8.5% increase per annum. It also hides that Soul Patts shareholders have enjoyed a total return of 12.5% per annum over the 20 years to December 2022.

Sometimes, a small dividend yield can be worth more than a big one. So don’t be deceived by the largest dividend yields on the ASX. Some, if not most, of them are too good to be true.

The post Don’t be deceived by ASX dividends appeared first on The Motley Fool Australia.

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More reading

• Should I target $1,000 of annual dividends by investing $10,000 today?
• 6 ASX 200 directors buying up their company shares in the past week
• Invest $1,500 each month in this ASX dividend stock to actually create a $1 million portfolio
• 6 asset-rich ASX 200 shares to buy for their takeover potential: expert
• Here’s why the AGL share price is dipping on Wednesday

Motley Fool contributor Sebastian Bowen has positions in Washington H. Soul Pattinson and Company Limited. 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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Wouldn’t it be nice to grow your ASX share portfolio from $20,000 to $1 million?

Well, the good news is that this is entirely possible. All you need is time, patience, a portfolio of high-quality ASX 200 shares, and compounding.

How to turn $20k into $1 million with ASX 200 shares

Historically, the stock market has provided investors with an average annual return of approximately 10% per annum.

And while there is no guarantee that it will continue to generate returns of this nature in the future, if it were to do so, your single $20,000 investment would grow into $1 million after 41 years.

Maybe that’s too long for you? If it is, don’t worry. All you need to do is add to your portfolio each year and you’ll cut down the time it takes to reach your million-dollar target.

For example, if you were able to invest $20,000 each year, your portfolio would grow to our target value after 17 years.

Alternatively, starting with a $20,000 investment and then investing $10,000 into high-quality ASX 200 shares each year would get you to $1 million in 22 years if you averaged 10% per annum.

Which shares should you buy?

I would aim to buy quality over quantity and focus on building a portfolio filled with ASX 200 shares that have the following characteristics:

• Competitive advantages
• Fair valuations
• Strong long-term growth prospects
• Sizeable addressable markets
• Growing dividends

A few ASX shares that spring to mind immediately are gaming technology company Aristocrat Leisure Limited (ASX: ALL), hearing solutions specialist Cochlear Limited (ASX: COH), and sleep treatment company ResMed Inc (ASX: RMD).

Over the last decade, these ASX shares have generated average annual total returns of 26.7%, 13.4%, and 22.4%, respectively. And based on their qualities, I would not be surprised to see them beat the market over the next decade.

The post How I’d invest $20,000 in ASX 200 shares to aim for a million appeared first on The Motley Fool Australia.

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More reading

• Buy these 3 ASX growth shares this month: experts
• 3 incredible ASX 200 growth shares to buy: analysts
• $20k invested in these ASX shares 10 years ago is now worth over $100k
• Guess which ASX 200 share is giving another $500 million back to its shareholders
• Buy these ASX 200 growth shares: Goldman Sachs

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 Cochlear and ResMed. The Motley Fool Australia has positions in and has recommended ResMed. The Motley Fool Australia has recommended Cochlear. 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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A little-known ASX mining share is setting the bar high today.

In morning trade, the All Ordinaries Index (ASX: XAO) is up a healthy 0.38%.

But this mining stock is leaving those gains in the dust.

Any guesses?

If you said Rox Resources Ltd (ASX: RXL), give yourself a gold star.

Rox Resources entered a trading halt on Friday pending today’s announcement.

The gold miner’s shares closed Thursday trading for 14.5 cents each. This morning, the Rox Resources share price shot as high as 23.5 cents, up a whopping 62%. At the time of writing, it remains up an impressive 48% at 21.5 cents a share.

Here’s what’s driving investor interest in the ASX mining share today.

ASX mining share rockets on bonanza gold strike

The Rox Resources share price is off to the races after the company reported some very promising initial drilling results. Those come from the reverse circulation (RC) and diamond drilling (DD) programs at its Youanmi Gold Project, located in Western Australia.

The announcement was made in conjunction with its joint venture partner, Venus Metals Corp Ltd (ASX: VMC). The Venus Metals share price is up 11% on the news.

The ASX mining shares reported that the first of a series of holes at Youanmi returned continuous bonanza grades in RC drilling.

The release highlights results of 28 metres at 34.81grams of gold per tonne from 204 metres including:

• 18m @ 51.96g/t from 207m, including;
• 10m@ 79.55g/t from 211m, including;
• 3m @ 138.07g/t from 218m

The miner said the results open up a new near-mine area for exploration and potential high-grade resource growth. With the true widths currently unconstrained, follow-up drilling is planned to determine the orientation and dip direction of the discovery.

Commenting on the initial drill results sending the ASX mining share soaring today, Rox Resources managing director Robert Ryan said:

Youanmi South is just 250 metres from the Youanmi main open pit, yet historical drilling was largely restricted to the weathered zone so true geology has been unconstrained.

The exceptional grade and continuous high-grade tenor of the intersection in an area previously untested by drilling is cause for cautious optimism whilst we determine orientation of the mineralised zone.

Rox Resources share price snapshot

With today’s big intraday leap factored in, the ASX mining share is up 19% in 2023. As you can see in the chart below, over the past 12 months the Rox Resources share price remains down 51%.

The post Guess which ASX mining share just leapt 62% on a ‘bonanza gold’ find appeared first on The Motley Fool Australia.

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More reading

• An insider just loaded up on Allkem shares: Should you buy into this lithium giant?
• With nothing in the bank, I’d use Warren Buffett’s method to build wealth
• What caused the A2 Milk share price to spill almost 6% in February?
• Why is the Pilbara Minerals share price falling in a hole Thursday morning?
• Why did the Woodside share price outperform the ASX 200 in February?

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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Allkem Ltd (ASX: AKE) shares are falling on Thursday.

In morning trade, the lithium miner’s shares are down 3% to $11.55.

That’s despite some potential positive news out of the miner.

Insider buys Allkem shares

With Allkem shares down by almost a third from their 52-week high of $16.75 amid concerns that lithium prices could soon tumble, one of the company’s directors appears to believe this has created a buying opportunity.

According to a change of director’s interest notice, Allkem’s non-executive chairman, Peter Coleman, has more than doubled his holding through a series of on-market purchases.

The notice reveals that Coleman picked up 17,054 shares across 24, 27, and 28 February at an average price of $11.6115 per share. This equates to a total consideration of just a touch under $200,000 and increases the chairman’s holding to 33,025 Allkem shares.

Is this a smart move?

The team at Goldman Sachs is likely to approve of this purchase.

At the end of last week, the broker responded to Allkem’s half-year results by retaining its buy rating with a slightly trimmed price target of $15.40. This implies potential upside of 33% for investors over the next 12 months.

It also means that those 17,054 shares that Coleman picked up in recent days would be worth approximately $262,000 if Allkem’s shares rose to that level. That’s over $60,000 more than the chairman’s investment.

Why Allkem?

Goldman explained that it is positive on Allkem even if lithium prices tumble for the following reason:

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.

The post An insider just loaded up on Allkem shares: Should you buy into this lithium giant? appeared first on The Motley Fool Australia.

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More reading

• 4 ASX 200 lithium shares to buy now: broker
• Here are the top 10 ASX 200 shares today
• Why are ASX 200 mining shares leading the market today?
• Investing in ASX 200 lithium stocks? Here’s why this 6% decline in China matters
• Why Allkem, Argosy Minerals, Mayne Pharma, and NextDC shares are racing higher

Motley Fool contributor James Mickleboro has positions in Allkem. 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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Warren Buffett may be one of the world’s richest people, but anyone can replicate the billionaire’s investment strategy ­– even ASX investors starting from scratch.

Buffett has generously offered investing advice for decades. In the meantime, he’s amassed a US$106 billion fortune on the stock market.

Let’s take a look at a few of the billionaire’s key lessons I’d employ if I were to be starting out on my investment journey.

The best opportunity is often the one you understand

The decades gone by have brought many a market trend. Think, booming ASX tech shares seen amid the low-interest rate environment of the 2010s and the rise (and fall, and rise, and fall) of cryptocurrencies.

But rarely will you see Buffett getting on board with such developments. That’s because the ‘Oracle of Omaha’ aims to invest in what he knows, and what he knows alone.

It’s what he calls his “circle of competence”. He once said:

There are all kinds of things I’m not competent to value. There are a few that I am confident to value … I don’t have to make money in every game.  

The companies behind ASX shares are generally complex machines, often operating in even more complicated fields.

Thus, an investor who admits what they know and what they don’t and chooses to invest within that circle of competence may be best prepared to identify winning opportunities.

Look to the horizon

Pop culture often depicts investing in the stock market as a fast-paced, ride-or-die activity. Images of flashing red and green boards and hour-by-hour share price updates can perpetuate this myth.

But those focused on long-term wealth building generally have plenty of time to decide if an ASX share is a buy.  

Long-term investing is more often a game of quality. Buying shares in a quality business with a good management team and plenty of room for growth will likely help build wealth over the years and decades to come.

Indeed, Buffett spends plenty of time pondering, researching, and analysing a stock before buying in.

He also advises that an investor doesn’t need to buy every opportunity that comes their way. There’s no penalty for not snapping up the ‘next big stock’ whenever it comes around.

Don’t pay too much for a quality ASX share

The final piece of Buffett wisdom I’ll leave you with harks back to one of his most famous mantras:

It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.

Note, the billionaire’s criteria is a “fair” price. He doesn’t pay too much for a share, even if it’s in a “wonderful” company.

Indeed, buying an ASX share for more than its underlying value can be a sure way to stall long-term returns as there’s less room to realise growth.   

Further, Buffett told investors in 2014 that buying cheap stocks in fair businesses is “the wrong foundation on which to build a large and enduring enterprise”.

There are many ways to find out if a stock is trading cheap. Perhaps the simplest is its price-to-earnings ratio.

The post With nothing in the bank, I’d use Warren Buffett’s method to build wealth appeared first on The Motley Fool Australia.

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• What caused the A2 Milk share price to spill almost 6% in February?
• Why is the Pilbara Minerals share price falling in a hole Thursday morning?
• Why did the Woodside share price outperform the ASX 200 in February?
• Why is the Coles share price sinking today?
• 3 steps I’d take to unearth the best ASX shares to buy in March

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 a lithium bull looking for investment options in the industry, then it could be worth checking out the four ASX 200 shares listed below.

That’s because analysts at Morgans have named these lithium shares as buys this week.

What is the broker saying about ASX 200 lithium shares?

The good news is that Morgans believes that lithium prices will remain higher for longer due to tight supply conditions.

It expects this to be driven by a post-holiday recovery in the Chinese electric vehicle (EV) market and lithium project delays. It explained:

Spot prices have softened but remain above contract prices. The Chinese EV market, still the world’s largest, has slowed recently for the Spring Festival but we expect activity to increase in the near future. Meanwhile, lithium projects are taking longer to complete leaving the market tight. Decreasing lithium production but increasing demand reflected in analyst consensus of key Chinese companies points to tightness continuing.

In light of this, the broker believes that Allkem Ltd (ASX: AKE), Mineral Resources Ltd (ASX: MIN), and Pilbara Minerals Ltd (ASX: PLS) shares are buys, with fellow ASX 200 lithium share Liontown Resources Ltd (ASX: LTR) a higher risk speculative buy.

Its ratings are as follows:

• Add rating and $15.20 price target on Allkem’s shares.
• Add rating and $102.00 price target on Mineral Resources’ shares.
• Add rating and $5.30 price target on Pilbara Minerals’ shares.
• Speculative buy rating and $1.96 price target on Liontown’s shares.

Commenting on its ratings, the broker said:

We continue to prefer AKE amongst the lithium pure plays as we see a longer growth runway for production and greater potential valuation upside. PLS is generating strong cash flows and holds opportunities for more tactical trades given speculation about potential uses of the growing cash balance.

MIN has been more resilient than peers and offers more diversified commodity exposures. The potential upside is less than other lithium large caps but it has also shown less volatility and stronger potential dividend yield. We retain our ADD rating. We initiate coverage of LTR (SPECULATIVE BUY) and CXO (HOLD). Both are near-term developers of Australian spodumene deposits. We see upside for LTR if it can resolve its funding issues and avoid further significant cost increases.

The post 4 ASX 200 lithium shares to buy now: broker appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Thursday
• Here are the top 10 ASX 200 shares today
• Why are ASX 200 mining shares leading the market today?
• Investing in ASX 200 lithium stocks? Here’s why this 6% decline in China matters
• Here are the 3 most heavily traded ASX 200 shares on Wednesday

Motley Fool contributor James Mickleboro has positions in Allkem. 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 dividend shares to buy, then Morgans has you covered.

Listed below are two ASX dividend shares to buy this month according to its analysts. Here’s what they are saying:

Dalrymple Bay Infrastructure Ltd (ASX: DBI)

Morgans is a fan of this coal terminal operator and was very pleased with its recent FY 2022 results. The good news is that it is expecting the company to build on this in the coming years, allowing it to pay some big dividends. The broker commented:

It commented:

The FY22 result delivered the substantial earnings growth we were expecting following finalisation of Terminal Infrastructure Charge (TIC) negotiations in 2H22. DPS guidance had already been provided and was unchanged (albeit the growth outlook was not reaffirmed).

The broker currently has an add rating and $2.63 price target on the company’s shares.

Its analysts are forecasting dividends per share of 21 cents in FY 2023 and 22 cents in FY 2024. Based on the latest Dalrymple Bay Infrastructure share price of $2.52, this will mean yields of 8.3% and 8.7%, respectively.

Universal Store Holdings Ltd (ASX: UNI)

Another ASX dividend share that Morgans has named as a buy is youth fashion retailer Universal Store.

The broker was also impressed with its recent results, noting that “1H23 sales rose 35% to $146m, 5% above our estimate.” Pleasingly, Morgans is confident that there’s more solid growth to come thanks to its exposure to younger consumers. It said:

The early performance in 2H23 suggests the customer continues to spend. The cost of living pressures expected to weigh on discretionary expenditure in Australia in the months ahead certainly apply to UNI’s youthful customer base, although they are likely to be more resilient than other demographics given they are less likely to have a mortgage to service.

Morgans has an add rating and $7.00 price target on its shares.

As for dividends, the broker is forecasting fully franked dividends per share of 30 cents in FY 2023 and 35 cents in FY 2024. Based on the current Universal Store share price of $5.59, this will mean yields of 5.4% and 6.25%, respectively.

The post Morgans names 2 ASX dividend shares to buy with big yields appeared first on The Motley Fool Australia.

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• I would invest $10,000 into these ASX shares in March
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• Morgans names the ASX dividend shares to buy
• 6 ASX shares to pounce on from a boom reporting season: Morgans

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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With an economy slowing to a grind after nine consecutive months of interest rates rises, picking ASX shares to buy has never been more hazardous.

If the underlying business does not have growth drivers that can withstand consumers closing their wallets, earnings could be significantly impacted.

Considering this dilemma, here are three ASX shares that experts have declared as a buy this week:

Growing through economic cycles

While Australians might have less disposable income to spend, with employment still at historically high levels, toll roads are seeing high usage.

This is where Transurban Group (ASX: TCL) comes in.

“Transurban owns and operates toll roads in Australia and the US,” Marcus Today equity analyst Damien Shaw told The Bull.

“Its latest financial half-year report revealed record traffic volumes, with average daily traffic exceeding 2.5 million trips. This resulted in record proportional toll revenue of $1.658 billion.”

The Transurban share price has already risen more than 10% this year, all while paying out a dividend yield of 3.7%.

But Shaw would buy now for even further potential.

“Transurban continues to grow and achieve its strategic goals through economic cycles,” he said. 

“This reflects the quality of its asset portfolio.”

‘Dominant market position’

Online classifieds site Carsales.com Ltd (ASX: CAR) doesn’t quite have a monopoly, but it is the biggest player in its field.

According to Shaw, its half-yearly results “mostly met market expectations”. 

“Strong revenue growth across all divisions was assisted by Carsales’ dominant market position and investment in technology.”

For a technology-related growth company, the share price hasn’t done too badly. It is up 13.5% over the past year and 10.8% year to date.

Carsales.com’s business is one that benefits from the network effect.

“Appealing to a huge audience of online automotive buyers and sellers lifts inventory, to the detriment of competitors.”

According to CMC Markets, seven out of 15 analysts currently agree with Shaw that Carsales is a buy.

‘We expect continuing strong demand’

Quite different from critical infrastructure and dominant market position, but still a tailwind, is the demand for copper.

For Red Leaf Securities chief John Athanasiou, Sandfire Resources Ltd (ASX: SFR) is the best stock to buy to play that theme.

“Copper is a dominant revenue stream for Sandfire,” he said.

“It produced more than 48,000 tonnes of copper in the first half of fiscal year 2023.”

Athanasiou reminded investors that copper is “a critical element in producing batteries for electric vehicles”. 

“We expect continuing strong demand for copper moving forward.” 

The Sandfire share price has gained 5.4% since the start of the year.

The post 3 ‘quality’ ASX shares to buy now before they rocket: experts appeared first on The Motley Fool Australia.

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More reading

• Sandfire share price slides as profits turn to losses
• Want an income boost? Buy these ASX dividend shares: experts
• 3 ASX shares I’d buy for passive income instead of BHP’s declining dividend
• 3 ASX 200 shares that could drive strong returns in an inflationary world: expert
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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 recommended Carsales.com. 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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Now that reporting season is winding up, it’s time to review which ASX shares have the best prospects heading into the next one in August.

Tribeca portfolio manager Jun Bei Liu this week mentioned some of the stocks that she would be happy to buy after their latest results:

Back to the future for dairy producer

China was significantly behind other large economies in loosening its COVID-19 restrictions. Only in December did it back away from a strict zero-COVID policy.

That provided a golden opportunity for some ASX companies, such as A2 Milk Company Ltd (ASX: A2M). 

The dairy company’s latest report impressed Liu.

“The result was incredible. China delivered over 40% growth,” Liu told Switzer TV Investing.

“That reopening thematic in China is really gathering momentum for that business.”

One of A2 Milk’s biggest sales channels before the pandemic was through what is called the daigou. These are Chinese people based overseas who ship or carry western goods back into China for resale.

That international movement of people came to a halt as the coronavirus restrictions came in. But Liu feels like it’s about to explode again.

“[Chinese] students are yet to return to drive that daigou channel, but we know that’s coming.”

Liu is certain about the influx of students because last month, the Chinese Communist Party issued a directive that online learning from Australian universities would no longer be recognised.

A2 Milk has a “very strong balance sheet“, she added.

“It really provides a really good buying opportunity post that result showing the continuation of that earnings recovery.”

Biggest market gone, but could return this year 

Along similar lines, Liu is a fan of Treasury Wine Estates Ltd (ASX: TWE).

The company was devastated in 2020 when Australia-China diplomatic relations turned combative, and punitive tariffs effectively locked the wine producer out of its biggest market.

Now with a different government in Australia and a more conciliatory Chinese regime, Liu is optimistic about Treasury Wine’s fortunes.

“To me, this is a very good buying opportunity.”

Unfortunately, the Treasury share price dipped 6.9% in a single day earlier this month. But Liu feels like investors overreacted.

“They grew close to 20% and they guided 17% growth for the next 12 months,” she said.

“The market was disappointed because it wasn’t 20%… It was quite unfair to be punished with earnings expectations despite the slowdown around the world.”

Energy crisis could be exacerbated with China’s reopening

China’s economy ramping up this year will mean demand for energy may shoot up.

The energy sector has generally enjoyed a surge in valuations due to a global shortage of oil and gas over the past year.

But one exception seems to be Santos Ltd (ASX: STO), which is trading now 2.7% lower than it did a year ago.

Liu reckons it could be a value buy at the moment, as the company’s current valuation implies the oil price being 10% cheaper than it is now.

“It does give you quite a bit of upside,” she said.

“With the China reopening gathering momentum in the next few months, oil is pretty well positioned.”

The post ‘Result was incredible’: 3 ASX 200 shares Jun Bei Liu would buy now 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 recommended A2 Milk and Treasury Wine Estates. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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On Wednesday, the S&P/ASX 200 Index (ASX: XJO) fought hard to start the month with a gain but fell just short. The benchmark index edged slightly lower to 7,251.6 points.

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

ASX 200 expected to fall again

The Australian share market is expected to fall gain on Thursday following a poor night of trade on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 6 points or 0.1% lower this morning. In late trade in the United States, the Dow Jones is down 0.2%, the S&P 500 has fallen 0.6% and the NASDAQ is down 0.8%.

Nickel Industries shares named as a buy

The Nickel Industries Ltd (ASX: NIC) share price could have major upside potential according to analysts at Bell Potter. This morning the broker has retained its buy rating with a slightly improved price target of $1.87. Bell Potter commented: “Its aggressive growth outlook and undemanding valuation metrics make it one of our top picks.”

Oil prices rise again

ASX 200 energy shares Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) could have a decent session after oil prices rose again on Wednesday night. According to Bloomberg, the WTI crude oil price is up 0.7% to US$77.61 a barrel and the Brent crude oil price is up 0.9% to US$84.18 a barrel. Traders have been bidding oil higher over the last couple of days thanks to strong economic data out of China.

Shares going ex-dividend

A number of ASX 200 shares are going ex-dividend on Thursday and could drop into the red. This includes supermarket giant Coles Group Ltd (ASX: COL), private health insurers Medibank Private Ltd (ASX: MPL) and NIB Holdings Limited (ASX: NHF), and lithium miner Pilbara Minerals Ltd (ASX: PLS).

Gold price climbs

ASX 200 gold shares Evolution Mining Ltd (ASX: EVN) and Regis Resources Limited (ASX: RRL) could have a good session after the gold price rose overnight. According to CNBC, the spot gold price is up 0.5% to US$1,845.5 an ounce. The precious metal rose after the US dollar softened in response to China’s strong economic data.

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

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More reading

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• Why are ASX 200 mining shares leading the market today?
• Investing in ASX 200 lithium stocks? Here’s why this 6% decline in China matters
• Here are the 3 most heavily traded ASX 200 shares on Wednesday

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 positions in and has recommended Coles Group. The Motley Fool Australia has recommended NIB Holdings. 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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