There are a handful of very promising S&P/ASX 300 Index (ASX: XKO) shares to consider investing in, according to the fund manager L1 Capital.

In its recent monthly update for the listed investment company (LIC) L1 Long Short Fund Ltd (ASX: LSF), the fund manager said it’s relatively cautious about the outlook because of the “lagged impact of the significant interest rate hikes, weakness in leading economic indicators, gradually increasing pressure on corporate earnings and tail-risk from geopolitical tensions”.

L1 Capital suggested that ongoing market volatility remains likely as investors reassess their outlook for the economy, interest rates, and corporate profits. However, the fund manager believes there are “numerous mispriced stocks” that can deliver “attractive long-term returns”.

Below are three of the names that were picked out.

James Hardie Industries plc (ASX: JHX)

The James Hardie share price had a strong performance in January 2023, rising by 19% as housing sentiment improved for US homebuilders. The US market has noted a “sharp increase” in new housing demand in January while the US 30-year fixed mortgage rates fell back to 6% after peaking above 7% in November 2022.

For investors who don’t know what James Hardie does, it’s described as the market leader in fibre cement siding and has been increasing its market share in the US for the last two decades.

Around two-thirds of its revenue comes from repair and remodelling exposure, while the rest is from new housing.

The fund manager believes James Hardie is well-placed to manage a period of “softer” new housing demand. After this period, it could “grow at an above-market rate for many years to come”.

BlueScope Steel Limited (ASX: BSL)

BlueScope steel is a sizeable steel business with operations in Australia and the US. The BlueScope share price went up 16% in January amid a recovery for US steel spreads, providing a “tailwind for the company’s second-half earnings expectations”.

The fund manager pointed out that the ASX 300 share is focused on growing its US operations with 850kt per annum capacity expansion at the North Star facility in Ohio. This follows the acquisition of the US’s second-largest metal coating/painting company.

BlueScope is also focused on the establishment of BlueScope Recycling from its acquisition of the MetalX recycling business.

Even though the BlueScope Steel share price has risen, L1 Capital thinks the market “significantly undervalues BlueScope’s unique and strategic asset base”.

Imdex Limited (ASX: IMD)

The Imdex share price went up 16% last month after the company announced a first-half result that beat market expectations.

The ASX 300 share also announced the acquisition of Devico, a leading global mining technology company based in Norway.

The fund manager believes the acquisition is “strategic and value accretive and will accelerate the company’s global growth strategy”.

L1 Capital pointed out that Imdex raised $224 million to fund the acquisition, which was “well-supported” by the market. The fund manager concluded with the following thoughts on the business:

We believe Imdex is well-positioned for long-term growth as it is in the early stages of launching the industry’s best suite of new and improved products.

The post These 3 ASX 300 shares are ‘significantly undervalued’: fund manager appeared first on The Motley Fool Australia.

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• Here are the top 10 ASX 200 shares today
• The ASX 200 is still full of cheap shares despite this year’s surge and I’m ready to buy more

Motley Fool contributor Tristan Harrison has positions in L1 Long Short Fund. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Imdex. The Motley Fool Australia has positions in and has recommended Imdex. 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 S&P/ASX 200 Index (ASX: XJO) tech share Altium Limited (ASX: ALU) could become the clear leader in the world at what it does.

Altium describes itself as a business that offers software tools that empower and connect PCB designers, part suppliers and manufacturers to develop and manufacture electronic products faster and more efficiently.

One of the key areas of Altium is the cloud platform Altium 365. The idea is that it will enable collaboration across the entire PCB design process.

Altium Designer is one of the main software offerings, as well as the electronic parts search engine called Octopart.

With that in mind, there are a few reasons that could make the business a global winner.

Investing for the future with strong tailwinds

Altium’s business model is changing, with “strong” platform adoption driving recurring revenue and average subscription seat price. The number of monthly active users and accounts on Altium 365 is increasing.

Altium is steadily growing its global PCB market share, but the competitor with the largest market share is losing its advantage.

More devices, vehicles and so on are becoming more advanced as time goes on. This is giving Altium a tailwind because electronics is “at the heart of a smart and connected world.”

Altium points to 5G connections, electrification of cars, autonomous driving, industrial internet of things (IoT), AI and data science, mobile devices and the general demand for “smart connected products are driving demand for electronics and continue to overburden supply chain.”

The company said that Altium 365 is increasing the attractiveness of Altium’s PCB design software resulting in greater demand and competitive advantage.

Impressive financials

Altium possesses some financial characteristics that are good signs of quality for the business and could help the Altium share price.

The amount of the ASX 200 tech share’s revenue that is recurring rose to 75% in FY22, up from 65% in FY21. That locks in more revenue for the next year and makes the revenue more sticky.

Altium had an earnings before interest, tax, depreciation and amortisation (EBITDA) margin of 36.7% in FY22, up from 34.3% in FY21. A growing EBITDA margin is an attractive factor, particularly if the revenue of the business is growing quickly. FY22 revenue rose 23%.

The company is very good at generating cash flow. In the FY22 result, Altium saw its net profit after tax (NPAT) reach $55.5 million (up 57%) while operating cash flow was $72.5 million (up 17%).

Generating lots of cash gives the business ample funds to pay a good dividend, ensure a good balance sheet and pay for good research and development to design the next generation of software for subscribers.

Growth expected

The Altium share price has done well over the long term. But, with the company expecting earnings growth in the future, this could help drive the Altium share price further.

The ASX 200 tech share has some aspirational targets for FY26.

In FY23, it’s expecting to generate total revenue of between $255 million to $265 million (up 15% to 20%). By FY26, it’s hoping to reach $500 million – almost doubling.

It’s hoping to reach an underlying EBITDA margin of between 38% to 40%, which means profit could grow even faster than revenue.

The business is also expecting to reach 100,000 software seats on subscription.

Altium share price valuation

According to Commsec, the business is valued at 60 times FY23’s estimated earnings.

The post Why I think this ASX 200 tech share could turn into a global superstar appeared first on The Motley Fool Australia.

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More reading

• This ASX 200 share is one of my top ideas to rake it in on a recovery
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• Why this ASX 200 share smashed the market with a 5% rally today
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Motley Fool contributor Tristan Harrison has positions in Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Altium. 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 a recession were to happen, there is an S&P/ASX 200 Index (ASX: XJO) share that I think could be a reliable performer: The Lottery Corporation Ltd (ASX: TLC).

It’s worth pointing out here that a recession isn’t seen as likely in Australia at this stage.

In the Reserve Bank of Australia’s (RBA) latest release, it said that its central forecast for GDP growth is expected to slow to around 1.5% during 2023 and 2024. The RBA said that the recovery in spending on services following the lifting of COVID restrictions has “largely run its course and the tighter financial conditions will constrain spending more broadly”.

However, total GDP growth is not quite the same as GDP per person. A household could be having a tough financial time, even if the economy as a whole is still growing.

This ASX 200 share could see strength

It’s possible that a recession could mean that The Lottery Corporation sees an increase in demand.

Following is an excerpt from a Sydney University article about gambling and its effects:

In times of economic recession, gambling, particularly on lotteries, usually stays strong. Gambling during recession times is typically highest amongst those who are experiencing the greatest financial hardship as it represents a potential way out.

There are numerous studies and research that show lottery participation is not hampered during a recession and that lotteries are essentially “recession-resistant”.

The Lottery Corporation operates many of Australia’s lotteries and Keno businesses. It runs Australia’s largest lottery, The Lott, and operates in every state and territory except Western Australia.

It is well-placed to be able to reach customers. At last disclosure, it had more than eight million active customers, equivalent to almost half the Australian adult population. That includes more than four million active registered customers. The ASX 200 share said it has more than 7,200 points of retail distribution, with fast-growing digital channels too.

Growth is already being achieved

FY22 saw a record result after a strong FY21. Management said this result demonstrated the business’ resilience, defensive qualities, and the benefits of an omnichannel model.

In FY22, comparable group revenue rose 9.4% to $3.5 billion. Comparable group earnings before interest and tax (EBIT) increased 13.8% to $603 million. The lotteries division saw comparable EBIT increase 16.3% to $541 million.

The business is achieving growth even in the good times, so it will be interesting to see how the company performs in 2023 with the economy facing a tough outlook.

Planned initiatives

The ASX 200 share has outlined a few different initiatives it’s been working on to drive it forward.

It has innovated its game portfolio with bigger prizes and more winners, enhanced the customer experience, increased its digital penetration, evolved its retail footprint, including the continued rollout of digital advertising at the point of sale, and it’s pursuing new licences and other opportunities.

The Lottery Corporation share price snapshot

Over the past year, The Lottery Corporation shares have gone up 5%.

Based on the Commsec forecast, the ASX 200 share is valued at 31 times FY23’s estimated earnings with a potential dividend yield of 2.8%, excluding franking credits.

The post Here’s why I’d buy this ASX 200 share with conviction if there’s a recession appeared first on The Motley Fool Australia.

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More reading

• Down 30% since its peak, is this a great time to buy this ASX 200 share?
• Why this ASX 200 share smashed the market with a 5% rally today
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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The VanEck Morningstar Wide Moat ETF (ASX: MOAT) could be one of the best exchange-traded funds (ETFs) to consider in the current investment market.

There are a number of ETFs based on broad indices which simply buy a few hundred of the biggest businesses.

For example, the Vanguard Australian Shares Index ETF (ASX: VAS) tracks the S&P/ASX 300 Index (ASX: XKO). The iShares Core S&P/ASX 200 ETF (ASX: IOZ) tracks the S&P/ASX 200 Index (ASX: XJO). And so on.

But some ETFs have a portfolio based on analysts targeting businesses and trying to find opportunities.

I particularly like the VanEck Morningstar Wide Moat ETF for a number of reasons.

High-quality picks

One of the main elements of its strategy is its focus on “quality US companies Morningstar believes possess sustainable competitive advantages, or wide economic moats”.

Think of a company as a castle. The job of the moat is to protect the castle when competitors are trying to attack. Other competitors in an industry would love to take down the leader in the sector.

Moats can come in a number of different forms according to Morningstar, including cost advantage, intangible assets (patents, brands, and regulatory licenses), brand switching costs (expenses or inconvenience), network effects, and efficient scale.

Only 14% of the 1,500 companies under Morningstar’s coverage are deemed to have a ‘wide moat’. That’s where the analysts believe the company can earn excess normalised returns, with near certainty, in 10 years.

In Morningstar’s estimations, that company must also be more likely than not to earn excess normalised returns 20 years from now.

Investments done at attractive prices

Morningstar analysts will only decide to add a US company to the VanEck Morningstar Wide Moat ETF portfolio if they’re trading at attractive prices relative to Morningstar’s estimate of fair value.

As an example, analysts have decided that a particular wide-moat business might be worth $50 a share on paper. If it’s trading at $35 then it could offer enough potential capital growth to invest in and, hopefully, achieve good returns.

The lower the price that the investment is bought at compared to the fair value price, the greater the potential return and the bigger margin of safety.

Strong historical returns

Of course, past performance is not a guarantee of future performance. But, at the time of writing, the VanEck Morningstar Wide Moat ETF has outperformed the S&P 500 over the past six months, twelve months, three years, and five years.

Over the past five years, it has produced an average return per annum of 14.5%. That includes the ETF’s annual management fee of 0.49%.

Foolish takeaway

I think that combination of investing in businesses that can generate long-term profit, while being at a good price, seems very effective to me.

The post I think this ETF is one of the best to buy on the ASX appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended VanEck Morningstar Wide Moat 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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The S&P/ASX 200 Index (ASX: XJO) share REA Group Limited (ASX: REA) has suffered from higher interest rates and weakening sentiment in the property market.

Since its share price peak in November 2021, the online real estate advertising business has fallen around 30%.

To lose around a third of its value is a significant decline for any business although REA Group is still worth $16 billion, according to the ASX.

The company just delivered its FY23 half-year result for the six months to December 2022.

Let’s remind ourselves what REA Group just reported.

Earnings recap

The owner of realestate.com.au reported that its core operations generated revenue growth of 5% to $617 million. However, earnings before interest, tax, depreciation and amortisation (EBITDA) (excluding associates) dropped 2% to $359 million.

Net profit after tax (NPAT) declined 9% to $205 million, though the business reported its half-year dividend was maintained at 75 cents per share.

REA Group was proud to report its Australian revenue grew by 3%, with yield growth across its advertising products more than offsetting a challenging market environment and strong prior-year comparables, particularly in the second quarter. In the first half of FY23, national listings in Australia were down 9%.

The ASX 200 tech share also reported that REA India achieved year-over-year growth of 48%.

Outlook

I think one of the biggest influences on the REA Group share price is what’s going to happen next. Certainly, the company’s outook was revealing.

REA Group noted that rapid successive interest rate increases and softening consumer sentiment have significantly impacted property prices and volumes in the Australian residential property market.

The ASX 200 tech share also said that while the effects of higher interest rates “will take some time to become apparent and price declines are expected to continue, the company expects stabilisation of the interest rate cycle will improve confidence and encourage increased activity”.

However, trying to see the silver lining, the company said that “underlying demand continues to be supported by ongoing strong fundamentals including low unemployment, anticipated wage growth, and ongoing increases in migration”.

REA Group said that January national residential new listings were down 9% year over year, Sydney listings were down 16%, and Melbourne listings were down 15%. The year-over-year growth rate for the rest of the financial year will “reflect strong prior period listings volumes, particularly in Q4”.

This means listing volume growth numbers could continue to be quite negative over the rest of the financial year.

My take on the REA Group share price

REA Group shares are only down by 11% over the past year, though the company’s share price has dropped 31% since early November.

Despite falling more than 2% on Friday, the REA Group share price is still valued at 34 times FY24’s estimated earnings. I think that’s a fairly high valuation considering interest rates are now much higher than they used to be.

However, I do think that REA Group has some impressive qualities. It’s in the strongest position in the Australian market because it gets more than three times the daily visitors of its nearest rival. This enables it to pass through price increases with little detrimental impact.

The ASX 200 share has also very compelling investments in businesses that are leaders in the US, India, and Southeast Asia. Each of these regions could turn into important profit generators for the business.

If I already owned REA Group shares, I’d hold them for the long term. However, if I wanted to buy shares, I’d want a better price in 2023 before pushing the buy button.

The post Down 30% since its peak, is this a great time to buy this ASX 200 share? appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended REA 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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At the start of each week, I like to look at ASIC’s short position report to find out which shares are being targeted by short sellers.

This is because I believe it is well worth keeping a close eye on short interest levels as high levels can sometimes be a sign that something isn’t quite right with a company.

With that in mind, here are the 10 most shorted shares on the ASX this week according to ASIC:

• Flight Centre Travel Group Ltd (ASX: FLT) remains the most shorted ASX share despite its short interest falling heavily to 12.6%. Short sellers may have been closing positions after the travel agent’s recent update.
• Betmakers Technology Group Ltd (ASX: BET) has seen its short interest edge lower to 12.5%. Competition, cash burn, and valuation concerns may be weighing on this betting technology company’s shares.
• Megaport Ltd (ASX: MP1) has seen its short interest rise to 9.9%. Short sellers have been adding to their positions since the network as a service provider released a disappointing quarterly update.
• Core Lithium Ltd (ASX: CXO) has short interest of 9.6%, which is up week on week. Valuation concerns have been weighing on this lithium share.
• Sayona Mining Ltd (ASX: SYA) has 9.3% of its shares held short, which is up slightly week on week. Fears that lithium prices have peaked could be behind this high level of short interest.
• Liontown Resources Ltd (ASX: LTR) has short interest of 7.7%, which is down slightly week on week. Once again, lithium price concerns appear to be behind this. In addition, project cost blow outs have sparked fears that a capital raising could be coming.
• Lake Resources N.L. (ASX: LKE) is a fourth lithium share in the list with 7.6% of its shares held short, which is up week on week. J Capital is shorting this lithium developer due to concerns over its technology and project funding.
• Pointsbet Holdings Ltd (ASX: PBH) is back in the top ten with 7.3% of its shares held short. Competition and cash burn concerns appear to be why short sellers are going after this sports betting company.
• NextDC Ltd (ASX: NXT) has returned to the top ten with short interest of 7%. Short sellers may have concerns that economic conditions could weigh on its performance.
• Zip Co Ltd (ASX: ZIP) has short interest of 6.9%, which is flat week on week. Short sellers appear to be doubting that Zip will be able to deliver profitable growth.

The post Here are the 10 most shorted ASX shares appeared first on The Motley Fool Australia.

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More reading

• Top brokers name 3 ASX shares to buy next week
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• Brokers name 3 ASX shares to buy now
• Why has the Flight Centre share price soared 20% in a month?

Motley Fool contributor James Mickleboro has positions in Nextdc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Betmakers Technology Group, Megaport, PointsBet, and Zip Co. The Motley Fool Australia has recommended Betmakers Technology Group, Flight Centre Travel Group, Megaport, and PointsBet. 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 new to investing and aren’t confident picking stocks, then exchange traded funds (ETFs) could be the answer. ETFs allow investors to buy large groups of shares in one fell swoop.

But which ETFs could be buys? Two that are popular and filled with high quality shares are listed below. Here’s what you need to know about them:

BetaShares NASDAQ 100 ETF (ASX: NDQ)

The first ETF that could be a buy is BetaShares NASDAQ 100 ETF. This ETF provides investors with access to 100 of the largest (non-financial) companies on the NASDAQ stock exchange.

These are many of the biggest and best companies in the world, with a heavy emphasis on the tech sector. Among the 100 shares included in the ETF are giants such as Amazon, Apple, Meta (Facebook), Microsoft, Netflix, Nvidia, Tesla, and Google parent, Alphabet.

BetaShares notes that this ETF could be a good option for local investors due to its focus on a high-growth potential sector that is under-represented on the Australian sharemarket.

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

Another option for investors to consider buying is the Vanguard US Total Market Shares Index ETF.

If you want a more balanced ETF with less of a focus on tech shares, then this ETF could be the one for you. It provides investors access to approximately 3,500 shares listed on the U.S. stock market.

Although this still means it gives investors exposure to many of the tech giants listed above, it also gives investors access to well-known blue chips such as Berkshire Hathaway, Caterpillar, Costco, Home Depot, Johnson & Johnson, Proctor & Gamble, and Visa and Mastercard.

Another positive is that many of these companies pay dividends, which means that it also provides investors with a source of income. At present the ETF offers a trailing 1.7% dividend yield.

The post These top ETFs could be great options for beginner ASX investors appeared first on The Motley Fool Australia.

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More reading

• Top ASX ETFs to buy in February 2023
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• How I’d invest $300 a month in ASX shares to target an extra income of $20,000 per year
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Motley Fool contributor James Mickleboro has positions in BetaShares Nasdaq 100 ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended BetaShares Nasdaq 100 ETF. The Motley Fool Australia has positions in and has recommended BetaShares Nasdaq 100 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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What if you had no investments and wanted to create a portfolio right now?

What are the first five stocks you would buy as the foundation for your investment stable?

This is a great hypothetical to think about to suppress all the noise, macroeconomics and short-term greed. It forces one to consider the genuine long-term prospects of ASX shares.

As a prime example, TMS Capital portfolio manager Ben Clark was recently asked this very question.

Here are the ASX shares he picked:

Start with some old favourites

Clark would start painting his blank canvas with western Australian conglomerate Wesfarmers Ltd (ASX: WES).

“Wesfarmers is a business, which I truly believe, whose management looked after the shareholders superbly,” Clark said in the On The Couch podcast.

“Bunnings, time and again, has proven to be an incredibly good business to own… This lithium venture’s about to come online in the next year or two.”

Wesfarmers’ is “cashed up”, and Clark feels it can exploit the current downturn to take on even more exciting business ideas.

The next two to add to the portfolio would be CSL Limited (ASX: CSL) and Macquarie Group Ltd (ASX: MQG).

“You got to have Macquarie in there,” said Clark.

“It’s driven by some of the smartest people in the country and on the planet, who are all heavily incentivised to make money for themselves and the business.”

For Clark, though, Macquarie differs from many of its international investment banking rivals.

“You’ve got this very strong risk [management] attitude across the bank, at the top of the bank,” he said.

“The business just continues to ground out higher and higher earnings.”

‘Bedrock of a portfolio’

The fourth pick is Brickworks Limited (ASX: BKW) or Washington H Soul Pattinson and Co Ltd (ASX: SOL), both of which own a considerable amount of each other’s shares.

But funnily enough, the ownership overlap doesn’t seem to correlate to synchronous movements in their stock prices.

“You do find their share prices not correlated, bizarrely, because they should be,” said Clark.

“So sometimes Brickworks will appeal to us more, and sometimes Soul.”

Similar to Macquarie and Wesfarmers, these companies have fingers in many different pies. The diversity seems to smooth out their fortunes over time.

Both Soul Patts and Brickworks are famous for increasing their dividends each year over many decades, regardless of how the economy or the stock market is doing.

“Rising stream of income over many, many years. It’s the bedrock of a portfolio.”

A ‘misunderstood’ gem

The fifth stock to add is mining royalties company Deterra Royalties Ltd (ASX: DRR).

“It’s an incredibly interesting business. But I still think it’s misunderstood.”

Despite the massive presence of mining companies on the ASX, listed royalties companies are few and far between. According to Clark, they are much more common on the Canadian and New York stock exchanges. 

But most seem to earn their keep from gold extraction and the subsequent profits of their tenants. Plus the mines have fairly short lives.

Deterra has none of those things.

“What Deterra has is globally unique,” he said.

“Deterra owns a 1.232% royalty over the MAC [Mining Area C], which about two-thirds of BHP Group Ltd (ASX: BHP)’s total iron ore production comes out of… It’s done on revenue, not profit.”

Also, the MAC mine has an estimated 60-year life, and BHP is increasing production out of it over the next few years.

These differences mean there is much more certainty over the income.

“This year, it should push out, including franking credits, a yield of about 11% or 12%,” said Clark.

“And it’s got net cash on the balance sheet, and I think at some stage, one of those big resource players will come sniffing for it.”

The post 5 ASX 200 shares I would buy if I was starting from scratch: expert appeared first on The Motley Fool Australia.

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Motley Fool contributor Tony Yoo has positions in CSL, Macquarie Group, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Brickworks, CSL, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Brickworks, Macquarie Group, Washington H. Soul Pattinson and Company Limited, 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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If you’re looking for ASX dividend shares to buy for passive income, then the two listed below could be worth looking at.

Both have been tipped as buys with meaningful upside potential and attractive future yields. Here’s what you need to know:

Baby Bunting Group Ltd (ASX: BBN)

The first ASX dividend share to look at is leading baby products retailer Baby Bunting.

Although the company has been having a very tough time in FY 2023 and its shares have been crushed, the team at Ord Minnett remains positive and sees its share price weakness as a buying opportunity.

The broker recently retained its buy rating with a $3.30 price target.

Its analysts expect the company’s performance to improve in the second half. After which, it is expecting a return to profit growth in FY 2024.

Ord Minnett believes this will lead to fully franked dividends per share of 11 cents in FY 2023 and then 15 cents in FY 2024. Based on the current Baby Bunting share price of $2.42, this will mean yields of 4.5% and 6.2%, respectively.

Rural Funds Group (ASX: RFF)

Another ASX dividend share that has been named as a buy is Rural Funds.

It is an agricultural focused real estate investment trust (REIT) with a portfolio of assets including orchards, vineyards, water entitlements, cropping, and cattle farms.

Bell Potter is a fan of the company and believes the current discount to adjusted NAV reflects what would historically be considered an attractive entry point for investors. It has a buy rating and $2.75 price target on Rural Funds shares.

As for dividends, the broker is expecting an 11.7 cents per share dividend in FY 2023 and then a 12.7 cents per share dividend in FY 2024. Based on the current Rural Funds share price of $2.40, this represents yields of 4.9% and 5.3%, respectively.

The post Supercharge your passive income with these buy-rated ASX dividend shares: analysts 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 Baby Bunting Group. The Motley Fool Australia has positions in and has recommended Rural Funds Group. The Motley Fool Australia has recommended Baby Bunting 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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On Friday, the S&P/ASX 200 Index (ASX: XJO) finished the week on a disappointing note. The benchmark index fell 0.75% to 7,433.7 points.

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

ASX 200 futures flat

The Australian share market looks set to have a subdued session on Monday following a mixed finish to the week on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day flat this morning. On Wall Street, the Dow Jones was up 0.5% and the S&P 500 rose 0.2%, but the NASDAQ dropped 0.6%.

Oil prices charge higher

ASX 200 energy shares including Santos Ltd (ASX: STO) and Woodside Energy Group Ltd (ASX: WDS) could have a good start to the week after oil prices charged higher on Friday. According to Bloomberg, the WTI crude oil price was up 2.2% to US$79.76 a barrel and the Brent crude oil price rose 2.4% to US$86.52 a barrel. Traders were bidding oil prices higher after Russia announced plans to cut its production.

Endeavour results

The Endeavour Group Ltd (ASX: EDV) share price will be one to watch on Monday when the drinks giant releases its half year results. Analysts at Goldman Sachs have tipped Endeavour to surprise to the upside with its result. It commented: “Industry feedback from peers and favorable weather suggests that trading in 1H23 is likely to offer positive surprise vs. consensus.” Goldman expects sales of $6,509 million and underlying NPAT of $346 million.

IAG results

The Insurance Australia Group Ltd (ASX: IAG) share price will also be in focus today for the same reason. This insurance giant is scheduled to release its half year results this morning and, according to CommSec, the market is expecting IAG to report a net profit of $420.5 million and an interim dividend of 9.8 cents per share.

Gold price softens

Gold miners Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) could have a subdued start to the week after the gold price softened on Friday. According to CNBC, the spot gold price edged 0.1% lower to $1,876.40 per ounce. Traders appears nervous ahead of a key US inflation reading next week.

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

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More reading

• ASX 200 shares: How to invest $10,000 to get $910 per year in passive income
• Here are the top 10 ASX 200 shares today
• Why Appen, Endeavour, Imugene, and Treasury Wine shares are pushing higher
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• Expect big yields from these ASX 200 dividend shares in 2023: analysts

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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