Are you looking for some ASX shares to add to your retirement portfolio?

Well, two ASX shares that tick these boxes are listed below. Here’s why analysts rate them as buys:

Charter Hall Long WALE REIT (ASX: CLW)

The Charter Hall Long Wale REIT could be an ASX share to consider for a retirement portfolio.

That’s because the company has a strong portfolio of assets in resilient property sectors, including industrial & logistics, convenience and long leased retail, long leased hardware, social infrastructure and office.

It also has ultra long weighted average lease expiries (hence the name) and sky-high occupancy rates of 11.8 years and 99.9%, respectively.

Citi is a fan of the company and has a buy rating and $5.00 price target on its shares.

As for dividends, the broker expects dividends per share of 28 cents in FY 2023 and 29 cents in FY 2024. Based on the current Charter Hall Long Wale REIT unit price of $4.31, this will mean yields of 6.5% and 6.7%, respectively.

Woolworths Limited (ASX: WOW)

Woolworths could be another ASX share to consider for a retirement portfolio. It is of course the retail giant behind the eponymous supermarket chain and other brands such as Countdown and Big W.

Given its blue chip status and incredible defensive qualities, as we saw clearly during the pandemic, it could be a safe option in the current environment. Especially considering the company is benefitting from food inflation.

Goldman Sachs is bullish on the company and believes it is well-placed for growth in the coming years thanks to its strong market position and digital and omni-channel advantage. It expects the latter to drive further market share and margin gains.

Goldman currently has a conviction buy rating and $41.00 price target on the company’s shares. As for dividends, its analysts are forecasting fully franked dividend yields of approximately 2.7% and 3%, respectively, over the next two years.

The post Buy Woolworths and this ASX share for your retirement portfolio: experts appeared first on The Motley Fool Australia.

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More reading

• Want passive income? Forget term deposits and buy these high yield ASX dividend shares: brokers
• Are these ASX All Ords shares ready to buy at fundamentally fire sale prices?
• My $10-a-day approach to building a second income with ASX shares
• Need passive income? Turn $5,000 into $25 every month with these ASX shares
• The boosted Woolworths dividend is hitting bank accounts today. Here’s what you need to know

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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AGL Energy Ltd (ASX: AGL) has been paying dividends to investors for many years, but the amount has fluctuated over time.

The energy producer’s share price has fallen 60% in the last five years and is currently trading at $8.54.

Let’s take a look at how much I would need to invest in AGL to achieve $150 in monthly income.

How many AGL shares would deliver $150 a month in dividends

Starting at the beginning, a monthly income of $150 would provide you with an annual income of $1,800.

AGL paid an interim dividend of 8 cents per share in March this year. This follows the company paying a final dividend of 10 cents per share in the second half of last year.

This means AGL has paid 18 cents per share in total dividends in the past 52 weeks.

That means, to have received a total of $1800 a year, or $150 a month, you would need to have owned exactly 10,000 AGL shares.

At the latest AGL share price of $8.54, this would set you back $85,400 in total.

AGL reported a 55% fall in underlying net profit after tax (NPAT) in 1H23 to $87 million. EBITDA declined 16% on 1H22 to $604 million.

However, AGL management is expecting earnings to improve in the second half and into FY24.

Commenting on this future outlook in the company’s half-year results presentation in February, CEO Damien Nicks said:

We expect to have higher earnings in the second half of FY23, in line with guidance, and continued positive momentum into FY24. 

AGL share price snapshot

AGL shares have fallen 1.27% in the last year. However, in the past month, AGL shares have risen 20%.

AGL has a market cap of about $5.7 billion based on the latest share price.

The post Here’s how much I would need to invest in AGL shares to achieve $150 in monthly income appeared first on The Motley Fool Australia.

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More reading

• 3 things that could tank the AGL share price
• Bought $3,000 of AGL shares 5 years ago? Guess how much passive income you’ve earned since
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• ‘Risks, returns, and decarbonisation’: AGL shares scrubbed from $68b superfund’s climate watchlist

Motley Fool contributor Monica O’Shea 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 Macquarie Group Ltd (ASX: MQG) share price has been a strong performer over the last five years, posting three times the gains of the broader S&P/ASX 200 Index (ASX: XJO).

Indeed, an $8,000 investment into the banking giant in April 2018 likely would have seen one walk away with 75 shares, having paid $105.52 apiece.

Today, that holding would be worth $13,622.25. The Macquarie share price last traded at $181.63 – 72% higher than it was five years ago.

For comparison, the ASX 200 has risen 24% in that time.

But what happens when we also factor Macquarie’s dividends into its returns? Keep reading to find out.

All dividends paid to those holding Macquarie shares since 2018

Here are all the dividends the banking giant has provided since April 2018:

Macquarie dividends’ pay date	Type	Dividend amount
December 2022	Interim	$3
July 2022	Final	$3.50
December 2021	Interim	$2.72
July 2021	Final	$3.35
December 2020	Interim	$1.35
July 2020	Final	$1.80
December 2019	Interim	$2.50
July 2019	Final	$3.60
December 2018	Interim	$2.15
July 2018	Final	$3.20
Total:		$27.17

As readers can see, each Macquarie share has yielded $27.17 of dividends since April 2018 That means our figurative parcel has likely provided $2,037.75 of passive income over its life.

Add that to its share price gains, and our total return on investment (ROI) becomes an impressive 98%.

And that’s before considering the potential compounding one might have realised if they reinvested their dividends, perhaps making the most of the company’s dividend reinvestment plan (DRP).

Not to mention, all of Macquarie’s offerings over that time have been partially franked. That means some investors might have reaped further rewards come tax time.

Right now, Macquarie shares are trading with a 3.58% dividend yield.   

The post Sunk $8,000 into Macquarie shares 5 years ago? Here’s how much dividend income you’ve received appeared first on The Motley Fool Australia.

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More reading

• Banking and mining: Analysts say these ASX 200 dividend shares are buys
• 5 reasons Macquarie shares could be a great investment today
• ‘Buying opportunity’: 2 ASX 200 shares to grab before they rocket
• Best ASX dividend share to buy now: Rio Tinto vs. Macquarie Group
• Buy these ASX dividend shares now: analysts

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 positions in and has recommended Macquarie 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 S&P/ASX 300 Index (ASX: XKO) share Rural Funds Group (ASX: RFF) has suffered a fall of close to 40% since its peak during COVID-19.

I was recently contacted and asked why I am positive about the farmland real estate investment trust (REIT) despite the falling share price.

There are a number of reasons why I’m just as positive, if not more positive, at this lower level.

It’s understandable why the market has punished the share price considering the higher interest rate. In theory, asset values such as farms do fall with higher interest rates.

How much could farm values fall? It’s hard to say. But, the higher interest rate situation does put pressure on Rural Funds’ finance costs, which can typically be the single biggest expense for a business like a REIT.

But, here are some reasons why I’m still very positive on the ASX 300 share.

Distribution income yield

While the Rural Funds share price has been falling, the passive income yield that it offers has been increasing.

Rural Funds has been growing its distribution by at least 4% each year since it listed and I think the business will be able to keep growing the distribution in future years because of a few reasons I’ll outline below.

But, the current total payout of 12.2 cents per unit for FY23 represents a total yield of 6.25%.

Assuming the business grows the distribution by another 4% in FY24, it would be a distribution yield of 6.5%. I think that’s a very attractive yield for a relatively defensive asset class of farmland.

Debt hedging

Rural Funds has entered into an increased level of interest rate hedges which will hopefully shield it from a lot of the higher interest rate costs.

In its FY23 half-year result, it said that it had entered into $175 million of additional hedges since 1 July 2022. Hedging will increase from $190 million in FY23 to $402 million in FY24. Its term debt drawn at 31 December 2022 was $504.4 million, so a large proportion of the debt is hedged.

The $402.2 million that is hedged for FY24 is at a weighted average hedge rate of 3.27%, so the interest rate increases may not impact the finance costs significantly.

Rental income continues to grow

In the HY23 result, Rural Funds pointed out that its property revenue grew by 7% primarily due to increased rent, rent on capital expenditure and new leases.

Almost half of its revenue is linked to CPI inflation, so the higher inflation is pushing this portion of the rent higher at a strong rate. This can offset some of the impacts of the higher interest rates, and help support the farm values.

Another third of the revenue has a fixed increase each year, which also boosts the ASX 300 share’s revenue.

Rural Funds has a weighted average lease expiry (WALE) of 12.3 years, so there’s a lot of rental revenue locked in for the coming years.

The tenants are large operators, so I think they’re as safe as they could be for Rural Funds.

Farm values could hold up

As any property investor might agree, we can only truly know what a property’s value is when it goes up for sale.

In the FY23 half-year result, Rural Funds said that its adjusted net asset value (NAV) increased by 3% to $2.78 which it put down to revaluations. Don’t forget, water entitlements make up close to a fifth of total adjusted assets, which can behave differently to farm values.

I believe the fall in the Rural Funds share price has more than made up for the potential fall of asset prices.

A few months ago, the ASX 300 share released its latest newsletter which outlined why there has been a positive correlation between inflation, commodity prices and farmland values since 1900, suggesting that farmland values can keep rising over time.

Productivity improvements

The business is expecting to benefit in future years from its development pipeline, which can boost rental returns and isn’t currently being reflected in the annual rental profits.

First, there is a 3,000 hectare macadamia development, which is forecast to be completed by FY25. Second, there is the development of an additional 2,000 hectares, which is forecast to commence in FY25 – Rural Funds will look for a tenant, or tenants, closer to the development commencement.

Third, there are 475 hectares of mature orchards going through improvements before seeking a long-term tenant.

Finally, productivity improvements are occurring on five cattle and cropping properties before seeking a tenant.

I think each of these will help boost the capital value and rental potential of Rural Funds.

Foolish takeaway

I’m still optimistic about the ASX 300 share, particularly at this lower level. I’m not expecting it to get back to a $3 share price any time soon, but it could get a boost when interest rates start dropping back towards 3%.

The post 5 reasons I’m still positive about this ASX 300 share despite the 40% drop appeared first on The Motley Fool Australia.

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More reading

• Analysts say these ASX shares will give you a passive income boost
• Need passive income? Turn $5,000 into $25 every month with these ASX shares
• How I’d invest $5,000 today for long-term passive income
• Add these ASX shares to your retirement portfolio for growing passive income: analysts
• Top ASX dividend shares to buy in April 2023

Motley Fool contributor Tristan Harrison has positions in Rural Funds Group. 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 Rural Funds 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 Allkem Ltd (ASX: AKE) share price had a day to forget on Thursday.

The lithium miner’s shares tumbled over 5% to end the day at $11.64.

This means the Allkem share price is now more than 20% over the last six months.

Why did the Allkem share price tumble?

Investors were hitting the sell button on Thursday after the miner released its third-quarter update.

Although the company delivered production that was largely in line with expectations, its commentary on pricing appears to have spooked the market.

For example, analysts at Morgans highlight that management is guiding to a sharp drop in lithium prices during the fourth quarter of FY 2023. They said:

AKE delivered 3Q production largely as expected but weakness in Chinese spot markets is affecting the short term outlook. Guidance for 4Q carbonate prices ($42k/t) was reduced 21% compared to 3Q and spodumene ($5k/t) was reduced 12%.

Should you buy the dip?

Interestingly, despite the recent weakness in lithium prices, they are still trading well beyond what Morgans is expecting for the long-term. In light of this, it continues to see significant value in the Allkem share price at current levels.

In fact, the broker has suggested that its shares could be worth almost double what they are now if spot prices were to remain at these levels over the long term. It explained:

Spot prices in China are significantly lower than Asia although there are some quality differences between the benchmarks. It’s unlikely that all of the Chinese production would be qualified for use by Asian battery manufacturers but there is clearly pressure on prices until the Chinese market tightens. Contract prices will likely continue to follow spot prices lower.

Despite this, our LT price assumptions are still well below current spot prices. Our nominal LT carbonate price of ~$20k/t is significantly below Chinese spot prices (~$25k/t) and our LT spodumene price of $2.5k/t is half of the current spot price. If we were to substitute for spot prices in our valuation, it would be over $22ps.

However, the broker doesn’t believe prices will stay this high forever, unfortunately. So, it currently has a more modest (but enticing) add rating and $14.70 price target on Allkem shares.

Based on where they are currently trading, this implies potential upside of 26% for investors over the next 12 months.

Incidentally, it is a similar story over at Bell Potter and Goldman Sachs. Both brokers have responded by retaining their buy ratings with price targets of $19.89 and $12.90, respectively.

All in all, brokers appears to believe buying the dip could be worth considering.

The post Should lithium investors buy the dip in the Allkem share price? appeared first on The Motley Fool Australia.

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More reading

• Why 29Metals, Allkem, Alliance, and Rio Tinto shares are falling today
• Allkem share price slides despite strong quarterly production from the ASX 200 lithium stock
• 5 things to watch on the ASX 200 on Thursday
• Why did Pilbara Minerals shares charge higher today?
• Here’s the latest forecast for ASX 200 lithium stocks from UBS

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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ASX 200 gold stock Evolution Mining Ltd (ASX: EVN) has been charging ahead in the last six months.

The company’s share price has soared 89% from $1.85 at market close on 20 October to $3.49 at market close on 20 April. For perspective, the S&P/ASX 200 Materials Index (ASX: XMJ) has risen 20% in the same time.

Let’s take a look at what is going on with the Evolution Mining share price.

Has the gold price helped?

Evolution Mining is a gold explorer with mines in New South Wales, Western Australia Queensland and Canada.

ASX 200 gold stocks Newcrest Mining Ltd (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) have also risen in the last six months.

Northern Star shares have soared 72.5% since market close on 20 October, while Newcrest Mining shares have surged 73%.

Amid wider market turmoil, the gold price has also had a stellar run in the past six months.

The spot gold price has risen 23% from US$1636.8 an ounce on 20 October to US$2,009 an ounce at the time of writing, according to CNBC.

Copper has also jumped nearly 24% in the same time frame, trading economics data shows.

This lift in the gold price could be giving ASX 200 mining shares including Evolution a boost.

Evolution achieved a 3% lift in the average achieved gold price from US$2,551 an ounce to US$2,639 an ounce in the third quarter of FY23. The company sold 165,758 ounces of gold, up 2.4% on the previous quarter.

The company’s realised copper price rose 15%, however, copper sales fell 30.9% during the quarter.

In other news, Evolution on Thursday reported drilling continues to extend mineralisation at the company’s Ernest Henry project in Queensland. The results are expected to “drive further growth” of the mineral resource at the project.

Mining activities at the Ernest Henry operation resumed in April following weather impact during the March quarter.

Commenting on these results, Evolution CEO Lawrie Conway said:

We continue to see encouraging drill results from the exploration drill program at Ernest Henry, highlighting the exciting potential for growth at this world class operation.

On 12 January, Evolution advised it had satisfied an earn-in milestone to earn a 75% interest in the Cue Project joint venture with Musgrave Minerals Ltd (ASX: MGV).

Evolution Mining share price snapshot

The Evolution Mining share price has slid 23% in the last year.

This ASX 200 gold share has a market capitalisation of about $6.4 billion based on the current share price.

The post How has ASX 200 gold share Evolution Mining managed to surge 89% in 6 months? appeared first on The Motley Fool Australia.

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More reading

• 11 ASX shares to buy with 4 on-trend qualities right now
• 5 things to watch on the ASX 200 on Thursday
• 5 things to watch on the ASX 200 on Wednesday
• 5 things to watch on the ASX 200 on Tuesday
• ASX 200 gold shares are booming in 2023 with more gains forecast: fund manager

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

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If you’re looking for exposure to the banking sector, then Westpac Banking Corp (ASX: WBC) shares could be worth considering.

That’s the view of analysts at Goldman Sachs, which believe the banking giant’s shares could provide investors with strong gains and big dividends.

What’s on offer with Westpac shares?

According to a note released this morning, the broker believes that Westpac shares are trading at a level that makes them very cheap.

In fact, its analysts estimate that “the stock is trading at a 24% 12-month forward PER discount to peers (historically a 3% discount).”

As a result, it sees scope for a significant re-rating from current levels and has retained its conviction buy rating on its shares with a slightly trimmed price target of $25.86.

Based on the current Westpac share price of $22.57, this implies potential upside of 15% for investors over the next 12 months.

But wait, there’s more!

Don’t forget the dividends

Goldman is also expecting the bank’s full-year dividends to increase from $1.25 per share in FY 2022 to $1.44 per share in FY 2023 (and then to $1.50 per share in FY 2024).

This equates to a fully franked 6.4% dividend yield this year based on where Westpac shares are currently trading.

Goldman commented:

We reiterate our Buy recommendation (on CL) on WBC given: i) while NIM pressures are accelerating across the sector, WBC’s shorter-duration replicating portfolio, and current balance sheet performance, should see its NIM outperform peers; ii) despite WBC recently revising its FY24E cost target to A$8.6 bn (from A$8.0 bn), the bank’s performance on cost management remains strong in this inflationary environment, and we forecast a 9% step down in underlying costs over the next two years; iii) on our estimates, the stock is trading at a 24% 12-month forward PER discount to peers (historically a 3% discount), and iv) our TP of A$25.86 offers 23% TSR.

The post Can Westpac shares really deliver 15% upside AND a 6% dividend yield? appeared first on The Motley Fool Australia.

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More reading

• These are the best ASX 200 bank shares to buy: brokers
• Which is the best ASX 200 bank share to buy today?
• 2 ASX stocks with a dividend bump coming
• I’d buy 12,000 Westpac shares for $150 in monthly passive income
• Harnessing the power of dividend investing: 2 high-yield ASX shares analysts say are buys

Motley Fool contributor James Mickleboro has positions in Westpac Banking. 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 Westpac Banking. 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 will be one to watch on Friday.

That’s because the mining giant has just released its third-quarter update.

BHP share price on watch following soft quarter

For the three months ended 31 March, BHP reported the following production:

• Copper production of 405.9kt
• Iron ore production of 59.8Mt
• Metallurgical coal production of 6.9Mt
• Energy coal production of 3.9Mt
• Nickel production of 19.6kt

How does this compare to expectations?

According to a note out of Goldman Sachs, its analysts were expecting quarterly copper production of 435kt, iron ore shipments of 64.7Mt, met coal production of 7Mt, and nickel production of 21.1Mt.

Whereas the consensus estimate was for 432kt, 67.9Mt, 7.4Mt, and 21.7Mt, respectively.

This means BHP has fallen short of what both Goldman and the market were expecting from the Big Australian. This may not bode well for the BHP share price on Friday.

FY 2023 guidance

However, potentially giving the BHP share price some support today was its full-year guidance, which is largely unchanged for both production and costs.

BHP revealed that its production guidance for the 2023 financial year remains unchanged for iron ore, metallurgical coal, and energy coal. Pleasingly, Olympic Dam and Pampa Norte are expected to be toward the upper end of their guidance ranges. Though, BHP Mitsubishi Alliance (BMA) is expected to be at the bottom of its range.

Over at Escondida, its production guidance has been lowered to between 1,050 and 1,080 kt (from between 1,080 and 1,180 kt). However, given the strong performance at the other copper assets, full year total copper production guidance remains unchanged at between 1,635 and 1,825 kt. One slight negative, though, is that full year nickel production has been lowered to between 75 and 85 kt (from between 80 and 90 kt).

As for costs, BHP’s full-year unit cost guidance remains unchanged. Though, Escondida and WAIO are expected to be at the top of their respective ranges.

BHP’s CEO, Mike Henry, spoke positively about demand. He commented:

Recent engagements with customers in China and India have reaffirmed our positive outlook for commodity demand, with China’s economic rebound and solid momentum in India’s steelmaking growth helping to offset the impact of slowing growth in the US, Japan and Europe

Finally, the Big Australian revealed that it has identified a new copper porphyry mineralised system, Ocelot, in the Miami-Globe copper district in Arizona, United States.

The post BHP share price on watch following third-quarter update appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Friday
• Which stocks does Warren Buffett own (and what can ASX 200 investors learn from this)?
• ASX 200 mining shares sink as iron ore price nears 2023 low
• BHP shares: Bull vs. Bear
• Why this broker just upgraded BHP shares to a buy rating

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.

from The Motley Fool Australia https://www.fool.com.au/2023/04/21/bhp-share-price-on-watch-following-third-quarter-update/

If you’re looking for dividend shares to buy this week, then the two listed below could be worth checking out.

Both are from very different sides of the market but have a couple of things in common – buy ratings from brokers and attractive forecast dividend yields.

Here’s what you need to know about them:

Macquarie Group Ltd (ASX: MQG)

This investment bank could be an ASX 200 dividend share to buy right now according to analysts at Morgans.

The broker currently has an add rating and $222.80 price target on the company’s shares, which implies potential upside of over 22% for investors from current levels.

Morgans believes Macquarie is a top pick for investors and has it on its best ideas list again this month. This is due to its long term growth potential, with the broker commenting:

We continue to like MQG’s exposure to long-term structural growth areas such as infrastructure and renewables. The company also stands to benefit from recent market volatility through its trading businesses, while it continues to gain market share in Australian mortgages.

In respect to dividends, the broker is expecting partially franked dividends of $8.28 per share in FY 2023 and $7.64 per share in FY 2024. Based on the current Macquarie share price of $181.63, this will mean yields of 4.55% and 4.2%, respectively.

South32 Ltd (ASX: S32)

Another ASX 200 dividend share that has been named as a buy is South32.

It is one of Australia’s largest miners with exposure to a range of commodities including aluminium, copper, manganese, and nickel.

Goldman Sachs is positive on South32 and has a buy rating and $4.90 price target on the mining giant’s shares. It highlights the company’s “improving FCF outlook on higher production & commodity prices (base metals and met coal).” It adds:

We assume the share buyback continues (at ~US$250mn p.a) and S32 pays out 50% of earnings (40% ordinary, 10% special dividend component) with the FY23 full year result. On our estimates, S32 is on a supportive dividend yield of c. 5% in FY23, increasing to 14% in FY24.

In respect to dividends, as mentioned above, Goldman is expecting fully franked yields in the region of 5% in FY 2023 and then 14% in FY 2024.

The post Banking and mining: Analysts say these ASX 200 dividend shares are buys appeared first on The Motley Fool Australia.

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More reading

• 5 reasons Macquarie shares could be a great investment today
• Get big gains and huge dividends from these ASX 200 mining shares: brokers
• ‘Buying opportunity’: 2 ASX 200 shares to grab before they rocket
• Best ASX dividend share to buy now: Rio Tinto vs. Macquarie Group
• Buy these ASX dividend shares now: 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 positions in and has recommended Macquarie 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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There has been only one group of investors doing well with Brainchip Holdings Ltd (ASX: BRN) shares in recent times – short sellers.

As readers may be aware from our weekly updates, short interest in this struggling semiconductor company has been increasing in 2023.

So much so, earlier this week we reported that it was the 10th most shorted ASX share with 7% of its shares in the hands of investors.

Unfortunately for shareholders, short sellers have since increased their interest to 7.15% since then according to data provided by ASIC.

This appears to indicate that short sellers don’t believe Brainchip shares have bottomed out yet. That’s despite them being down almost 60% over the last 12 months, as you can see on the chart below.

Why are short sellers targeting Brainchip shares?

While short sellers haven’t gone public with their short thesis, it isn’t hard to see why they may be licking their lips when they see Brainchip’s shares and its almost $800 million market capitalisation.

Here is a company that has promised the world for years and delivered nothing but a ballooning share count from capital raisings and overly generous performance rights.

According to CommSec, back in 2014, the company had 220 million shares outstanding. As per an update this week, this number has increased to just under 1.8 billion shares.

But it won’t stop there! Brainchip has just announced the date of its annual general meeting and will ask shareholders to vote on the granting of further restricted stock units and performance rights. This includes approximately 2.3 million units to its CEO, Sean Hehir, who has helped Brainchip deliver less revenue than a cafe in the Melbourne CBD since joining the company.

And this won’t be the first time he has been granted shares. Last year he was granted 2 million shares and then sold almost half of them soon after, as covered here.

Will Brainchip’s revenue ever justify its market cap?

While Brainchip certainly has a large addressable market, it has been struggling to turn discussions into sales. It also recently admitted, in many respects, that its previous Akida platform was not good enough for its market.

Management advised that it listened to customer feedback and launched a new platform last month. If this one doesn’t generate meaningful revenue, maybe the company never will.

Especially given the fierce competition it faces in an industry where tech giants spend billions on research and development each year.

And while Brainchip claims to have the leading technology in the edge AI industry, you have to wonder if a major customer would truly trust something largely unproven and without a significant support network? Could Brainchip deal with a mass recall, for example? It could be more likely that a major customer would rather settle for a slightly inferior product from a trusted tech giant like IBM or Nvidia than a risky proposition like Akida.

Time will tell if this is the case, but the smart money is clearly betting against this meme stock.

The post How ASX short sellers have been cashing in on BrainChip shares in 2023 appeared first on The Motley Fool Australia.

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More reading

• Why Brainchip, Domain, Star, and Tietto shares are dropping today
• Capital deities and destroyers: The best and worst at putting money to work among ASX 200 shares
• These are the 10 most shorted ASX shares this week
• Why did the Brainchip share price crash 36% in the first quarter of 2023?
• These are the 10 most shorted ASX shares this week

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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