While most ASX tech shares have rebounded from their lows, that doesn’t mean there aren’t any bargains out there.

For example, the two tech shares listed below could have huge upside potential if Goldman Sachs is on the money with its recommendations.

Here’s what its analysts are saying about these ASX tech shares:

Life360 Inc (ASX: 360)

Goldman Sachs currently has a buy rating and $7.90 price target on this location technology company’s shares. Based on the current Life360 share price of $4.90, this implies potential upside of 61% over the next 12 months.

The broker believes Life360 is on the verge of becoming a profitable growth machine. Something which it feels the market underappreciates. As a result, it sees significant value in its shares at the current level. It commented:

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

Readytech Holdings Ltd (ASX: RDY)

Another ASX tech share that Goldman Sachs sees plenty of value in is Readytech. It is a provider of mission-critical software-as-a-service (SaaS) solutions for the education, employment services, workforce management, government and justice sectors.

Goldman currently has a buy rating and $4.40 price target on its shares. Based on the current Readytech share price of $2.95, this suggests potential upside of 49% for investors.

The broker is very positive on Readytech’s long term growth potential and its defensive earnings. It said:

RDY remains a tech value play within our coverage universe, trading at a >50% discount to peers when accounting for its robust growth outlook. Government software has been a pocket of strength and resilience within TMT (~3/4 of RDY’s earnings) and we are positive on RDY’s ability to deliver mid-teens organic growth at an expanding profit margin through the cycle.

The post Buy these cheap ASX tech shares offering huge potential returns: Goldman Sachs appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Analysts say buy these ASX 200 tech shares before it’s too late
• Goldman Sachs says these ASX growth shares are market-thumping buys
• 2 high-risk, high-reward ASX tech shares to buy now: analysts
• My top 5 ASX shares to buy and hold forever in anticipation of the bull market
• Here are the top 10 ASX 200 shares today

Motley Fool contributor James Mickleboro has positions in Life360. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Life360 and ReadyTech. The Motley Fool Australia has recommended ReadyTech. 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://ift.tt/gvVeliD

If you’re looking for dividend shares to buy, then you could do a lot worse than the ASX 200 shares listed below.

Both of these shares have been named as buys with above-average forecast dividend yields. Here’s what you need to know:

QBE Insurance Group Ltd (ASX: QBE)

The first ASX 200 dividend share that has been named as a buy is insurance giant QBE.

Analysts at Morgans are positive on the company. This is due partly to its belief that “strong rate increases [are] still flowing through QBE’s insurance book.” In addition, the broker highlights that the insurer’s shares are trading on lower than average multiples and appear “inexpensive” at current levels.

As for dividends, Morgans expects QBE to pay an 82 cents per share dividend in FY 2023 and then a 93 cents per share dividend in FY 2024. Based on the latest QBE share price of $14.89, this equates to yields of 5.5% and 6.25%, respectively.

Morgans has an add rating and $16.96 price target on QBE’s shares.

Rio Tinto Ltd (ASX: RIO)

Another ASX 200 dividend share for income investors to consider buying is mining giant Rio Tinto.

Goldman Sachs believes it is a great option for investors that are looking for mining sector exposure. This is due to its “compelling valuation” and “return to production growth in 2023.”

The broker expects the latter to underpin fully franked dividends per share of US$5.39 in FY 2023 and then US$4.76 in FY 2024. Based on current exchange rates and the latest Rio Tinto share price of $123.19, this will mean yields of 6.5% and 5.8%, respectively.

Goldman Sachs has a buy rating and lifting its price target to $138.30.

The post 2 ASX 200 dividend shares to buy now: brokers appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• The latest Rio Tinto dividend is being paid today. Here’s what you need to know
• Why are ASX 200 mining shares like Fortescue smashing the index today?
• Here’s how much I would need to invest in Rio Tinto shares to generate a $100 monthly income
• Leading brokers name 3 ASX shares to buy today
• Lithium, iron ore, and copper: Experts say these ASX 200 mining shares are buys

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://ift.tt/o6K8smU

Fidelity portfolio manager James Abela has observed a curious — but welcome — change in the share market over the last six months.

“The market has shifted from focusing on value styles, valuations and short-term earnings to long-term realities of business models, as well as market structures,” Abela said on the Fidelity blog.

The revised focus seen in February’s reporting season would “likely continue into 2023”, he added.

“Operating margins, earnings growth, persistency of returns, cash generation, debt levels, market structures within industries, competition intensity levels, consumer confidence experience by companies, top-line sales outlook, and the visible level of certainty in management presentations.”

Meanwhile, Australian consumer sentiment remains ambiguous. Optimism seems to be mixed with worries about the second half of this year.

“Post-COVID, we have seen an increase in consumer spending,” said Abela.

“However, this flies in the face of the data reflecting consumer confidence, which is at low levels due to the flow-through impact of housing costs and cost of living, which is impacting the consumer psyche as spending concerns are emerging, but not yet visible in retail sales trends.”

So how does this translate to which ASX shares to buy right now?

4 attributes to look for in the best ASX shares to buy

The Fidelity team has deduced that the market revolution would trigger higher demand for four types of stocks: quality, momentum, transition, and value.

“The fund maintains a strategic tilt toward quality and transition or value with the intention of providing a higher-than-average growth outlook with a low valuation premium to navigate the beginning of 2023.”

Abela’s definition of quality takes in sectors such as software, health, consumer services, defensives, and insurance brokers.

Value shares come from industries such as real estate, airports, travel, global industrials, and gold.

To be precise, he named 11 specific stocks that his fund holds that are standard bearers of these desirable categories:

Type	Abela’s description	ASX shares
Quality	“higher returns, higher growth, long duration, quality accounts and management teams”	Altium Limited (ASX: ALU) WiseTech Global Ltd (ASX: WTC) Steadfast Group Ltd (ASX: SDF)
Momentum	“moderate returns with an upward trend, sentiment strong, cyclicals themes are favourable”	Orica Ltd (ASX: ORI) Evolution Mining Ltd (ASX: EVN) IGO Ltd (ASX: IGO)
Transition	“in recovery mode with some milestones or positive sentiment shift, but market still feeling uncertain about the outlook”	Flight Centre Travel Group Ltd (ASX: FLT) Auckland International Airport Limited (ASX: AIA) Collins Foods Ltd (ASX: CKF)
Value	“sentiment weak, valuations near lows relative to replacement cost or attractive in the eyes of industry participants”	Vicinity Centres (ASX: VCX) Ampol Ltd (ASX: ALD)

Australian conditions remain strong

Abela reckons the valuation of ASX shares generally — in terms of price-to-earnings (P/E) ratios — continues to chug along at the “lower range compared to history” because of the dark economic clouds.

“The dispersion range between high-growth and low-growth companies has begun to expand as the scarcity of earnings growth, certainty, sustainable margins and confidence in management has narrowed.”

Employment numbers have remained strong in Australia, indicating the country is not yet “experiencing any material economic weakness”.

“However, the drift toward softer business investment or employment is likely to create downward pressure in the current positive economic circumstances.”

The post 11 ASX shares to buy with 4 on-trend qualities right now appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 5 things to watch on the ASX 200 on Thursday
• Here are the top 10 ASX 200 shares today
• Here’s the latest forecast for ASX 200 lithium stocks from UBS
• 4 ASX 200 shares going gangbusters in high inflation (and what they have in common)
• 5 things to watch on the ASX 200 on Wednesday

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 positions in and has recommended Altium, Collins Foods, Steadfast Group, and WiseTech Global. The Motley Fool Australia has positions in and has recommended Steadfast Group and WiseTech Global. The Motley Fool Australia has recommended Collins Foods and Flight Centre Travel Group. 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://ift.tt/N14KzHb

The BHP Group Ltd (ASX: BHP) share price has proven resilient in the past, bolstered by a large and diverse portfolio of assets. Yet, the company’s shares are still in the dirt compared to a year ago.

At their last closing price, shares in BHP commanded a $47.27 price tag — roughly 10% lower than their going price a year prior. It appears investors are cooling their jets on the mining giant as commodity prices are dialled down to a gentle simmer.

Is it a chance to add this formidable Australian miner to the shareholding cabinet? Or is it better to leave it in the dust? We asked two of our Foolish writers to provide the bull and bear argument for one of the largest companies on the ASX — enjoy!

What’s to like about BHP shares now? 

By Monica O’Shea: I am positive about the BHP share price in the long term.

The iron ore price is a major factor that weighs on BHP shares on a regular basis. While the commodity has been volatile recently amid China’s plan to cap domestic output on steel, it is still far higher than its one-year low of $81.50 in November.

At the time of writing, iron ore is fetching US$121 a tonne. Late last week, ANZ commodity strategists Daniel Hynes and Soni Kumari said China’s commodity imports for March were surprisingly strong, commenting “Steel production is recovering, which could keep iron ore imports relatively steady.”

On another note, I believe BHP’s takeover of OZ Minerals Ltd (ASX: OZL) will broaden the company’s earnings base from copper. The conductive commodity accounted for US$2.8 billion of BHP’s underlying EBITDA in the first half of FY23, while iron ore contributed US$7.6 billion.

BHP has also recently received positive coverage from brokers. Macquarie has placed an “outperform” rating on BHP shares with a $52 price target. Meanwhile, Goldman Sachs has a hold rating on BHP with a $50.40 price target.  

Another recent good sign for BHP is insider buying. BHP director Gary Goldberg has recently lifted his stake in the company, which could indicate he is seeing positive signs for the BHP share price going forward.

Finally, I believe BHP could be worth holding for its dividend. Despite the BHP dividend falling in March 2023, overall, the company pays a very reasonable dividend yield when you look across ASX 200 shares.

Goldman is tipping BHP to pay a final dividend of US$1.21 a share in FY23, up from 90 cents in the first half of the financial year. This equates to $3.14 Australian dollars and represents a dividend yield of 6.6% based on the current share price.  

Motley Fool contributor Monica O’Shea does not own shares in BHP Group Ltd.

What’s not to dig about this mining giant?

By Tristan Harrison: I think the best time to buy an ASX mining share like BHP is when the share price is at a cyclical low when the commodity price has fallen.

No one can know what commodity prices are going to do next month or even next year, but I don’t think BHP is at a low point.

When we look at the BHP share price over the past six months, it has risen by around 16%. Since the middle of March, BHP shares have been flat. Yet, the iron ore price has dropped several dollars per tonne to around US$120 per tonne.

Iron ore has been the key earnings generator for BHP over the last few years, but China’s demand may not be enough to push the iron ore price any higher from here. In fact, it wouldn’t surprise me if the iron ore price fell by another US$10 per tonne over this year.

There’s also the new China Minerals Resources Group (CMRG) which is looking to do much of the Chinese purchasing of iron ore. This means CMRG could have a lot of buying power and will try to negotiate a lower iron ore price with the ASX mining shares, like BHP. Time will tell how much of an effect this has on the iron ore price.

BHP shares could continue to pay decent dividends over the longer term, but Commsec numbers suggest that the company’s dividend is going to be cut in FY23 to $3 per share.

With the company having a market capitalisation of $228 billion according to the ASX, I think it will be tricky for the business to grow strongly because of its enormous size.

Motley Fool contributor Tristan Harrison does not own shares in BHP Group Ltd.

The post BHP shares: Bull vs. Bear appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Why this broker just upgraded BHP shares to a buy rating
• Top brokers name 3 ASX shares to buy today
• Why are ASX 200 mining shares like Fortescue smashing the index today?
• How much to invest in ASX shares to get $500 in dividends every month
• Here’s the forecast for popular ASX 200 mining shares from UBS

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://ift.tt/Cgry5FK

The Wesfarmers Ltd (ASX: WES) share price will be one to watch closely on Thursday.

Why is the Wesfarmers share price on watch?

The Wesfarmers share price will be on watch on Thursday after the company identified its next takeover target.

Just a matter of days after selling down its stake in Coles Group Ltd (ASX: COL), the company is ready to put the funds to work to acquire Australia’s largest specialist clinic networks, Silk Laser Australia Ltd (ASX: SLA).

According to the release, Wesfarmers Health has tabled a non-binding offer of $3.15 cash per share. This represents a 30% premium to its last close price and values Silk Laser’s equity at $169 million. It is, however, worth noting that the offer is below the Silk IPO price of $3.45 per share.

The indicative proposal also provides for the payment of a fully franked dividend of up to a maximum of 10 cents per share. However, the cash component of any such dividend will reduce the cash consideration accordingly.

Wesfarmers notes that Silk is one of the largest non-surgical aesthetics clinic operators in Australia and New Zealand with a network of over 140 clinics. If the takeover is successful, it will become part of the Wesfarmers Health division. Management expect it to complement the division’s existing presence in the sector through its ownership and operation of Clear Skincare Clinics.

What’s next?

The release notes that Silk Laser has granted Wesfarmers up to 30 business days to undertake exclusive due diligence, with potential to extend the exclusivity period for a further 10 business days in certain circumstances.

As things stand, the Silk board of directors intends to unanimously recommend to its shareholders that they vote in favour of the scheme of arrangement. Each director intends to vote any shares they control in favour of the scheme.

Both are subject to the parties agreeing a scheme implementation deed on terms no less favourable than in the indicative proposal, the independent expert’s report, and there being no superior proposal.

One of the company’s largest shareholders, WAM Capital Limited (ASX: WAM), which owns 9.3% of Silk’s outstanding shares, has confirmed its support for the indicative proposal. So much so, it has entered into a voting agreement which is subject to there being no superior proposal and the independent expert’s report.

Silk Founder and Managing Director, Martin Perelman, was “pleased” with the news and believes “it is in the best interests of shareholders to engage” with Wesfarmers.

The post Wesfarmers share price on watch amid $169m Silk Laser takeover offer appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• If house prices have bottomed, should I buy property-related ASX shares?
• No savings at 40? I’d invest $5 a day in ASX shares for passive income of $7,800 a year
• Why did the Wesfarmers share price just smash a new 52-week high?
• Why this fund manager thinks these 2 outperforming ASX shares can keep beating the market
• 5 steps to bring in $1,000 per month in passive income

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 and Wesfarmers. The Motley Fool Australia has recommended Silk Laser Australia. 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://ift.tt/XbqKa2O

The banking sector has been having a tough time of late after a number of high profile collapses across the globe.

While this is disappointing for bank shareholders, it could be a buying opportunity for those that don’t already have exposure to the sector.

But which ASX 200 bank shares should you buy now?

Two that have recently been named as top picks by analysts are named below. Here’s why they rate these bank shares as buys:

ANZ Group Holdings Ltd (ASX: ANZ)

ANZ could be the ASX 200 bank share to buy according to analysts at Citi. The broker believes it is performing ahead of expectations during the first-half of FY 2023 based on its recent quarterly update. It commented:

Likely a strong quarter for institutional ANZ’s 1Q23 disclosures exhibited strong trends in both lending growth and asset quality. No earnings disclosure was provided, but we think that after backing out RWA movements from capital, it comfortably implies above market earnings. […] ANZ remains our top pick in the sector, and we expect the lending momentum, particularly in institutional, to continue to differentiate vs peers.

Citi currently has a buy rating and $29.25 price target on its shares and is forecasting a fully franked 166 cents per share dividend in FY 2023. Based on the latest ANZ share price of $24.14, the latter will mean a sizeable 6.9% dividend yield.

Westpac Banking Corp (ASX: WBC)

Over at Goldman Sachs, its analysts believe that Westpac is the ASX 200 bank share to buy right now.

Its analysts like Australia’s oldest bank due to its cost reduction plans and strong leverage to rising interest rates. The broker explained:

We are Buy-rated (on CL) and continue to see WBC as our preferred exposure to the A&NZ Financials reflecting: i) its strong leverage to rising rates, ii) despite WBC 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 with a 9% step down in costs expected over the next two years, iii) the business is still investing effectively in its franchise, and iv) we note the stock is trading at a notable discount to peers, versus the historical average discount of 2%.

Goldman has a conviction buy rating and $27.74 price target on its shares and is forecasting a 147 cents per share dividend in FY 2023. Based on the current Westpac share price of $22.23, the latter will mean a fully franked 6.6% dividend yield for investors.

The post These are the best ASX 200 bank shares to buy: brokers appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Which is the best ASX 200 bank share to buy today?
• 2 ASX stocks with a dividend bump coming
• Here’s the ANZ dividend forecast through to 2025
• I’d buy 12,000 Westpac shares for $150 in monthly passive income
• Passive income seekers: Experts say these ASX dividend shares 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.

from The Motley Fool Australia https://ift.tt/G95dRWq

There are some amazing dividend yields on offer out of the ASX at the moment.

But many of those stocks are expensive. 

For example, JB Hi-Fi Limited (ASX: JBH) and Rio Tinto Ltd (ASX: RIO) are handing out mouth-watering 7.7% and 8.6% yields at the moment but cost around $45 and $122 per share respectively.

So are there any cheapies out there that could net you a tidy income?

Here’s a cheap ASX stock pumping out dividends

Adairs Ltd (ASX: ADH) is a homewares retailer with a $377 million market capitalisation.

The stock is currently paying out an awesome dividend yield of 8.2%.

And the great thing is that investors can grab the shares for under $10. The Adairs stock price closed Wednesday at $2.18, to be down around 3% year to date.

The retailer stock is trading at around a bargain-basement price-to-earnings ratio of 7.7.

At an 8.2% yield, the income from Adairs shares would easily pay for the typical mortgage repayments, which currently hover just around 5% to 6% per annum. 

Then you’d have money left over for a nice holiday, or reinvestment.

Even with just a $50,000 investment, Adairs will provide a tidy $342 of passive income each month. The dividend is 100% franked, so that amount could be even more depending on your tax circumstances.

How reliable is the business though?

The worry with a small cap paying out such handsome payouts might be that it could be a trap. Is the share price or dividend level at risk of collapse?

According to The Motley Fool’s Sebastian Bowen, Adairs is “far from” a dividend trap.

“It has recently declared an interim dividend of 8 cents per share, matching last year’s payout,” he said.

“Adairs just reported sales growth of 34.1% and an increase in net profit after tax of 23.9% to $21.8 million. This indicates its business model is growing healthily, which means the dividends should keep flowing.”

Among the professional community, the sentiment is mostly positive on Adairs. 

According to CMC Markets, four out of nine analysts currently rate the stock as a buy, while the rest reckon it’s a hold.

The platform also forecasts a dividend yield of 7.3% and 7.6% for each of the coming two years.

The post 1 under-$10 ASX dividend stock to buy for monthly passive income appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• I’m buying ASX 200 dividend stocks ahead of the next bull market
• I’m looking for once-in-a-decade opportunities in the stock market recovery
• I think these two ASX dividend shares are top buys with $2,000 in April
• In search of deep value? I think these 3 ASX dividend shares could be a downright steal
• Dividend yields over 10%! Cheap ASX shares I’d buy for passive income

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 positions in and has recommended Adairs. The Motley Fool Australia has positions in and has recommended Adairs. The Motley Fool Australia has recommended Jb Hi-Fi. 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://ift.tt/ir2dXe8

The Xero Limited (ASX: XRO) share price has been on fire this year. Since the start of the year, the cloud accounting platform provider’s shares have risen an impressive 31%.

The good news for investors is that the team at Goldman Sachs believes it isn’t too late to jump on the Xero bandwagon.

In fact, the broker believes the Xero share price is only warming up and sees plenty more upside ahead for investors.

What is Goldman Sachs saying about the Xero share price?

According to the note, Goldman has reiterated its conviction buy rating on the company’s shares with an improved price target of $126.00.

Based on the current Xero share price of $92.00, this implies potential upside of approximately 37% for investors over the next 12 months.

What’s new?

The broker has been looking at high-frequency data, Xero’s pricing power, and its expectations for its FY 2023 results next month.

In respect to the former, Goldman highlights that high frequency data supports an improvement in the UK. It notes that app downloads imply +76,000 second half net adds, which is consistent with company guidance for a similar/better performance than the prior corresponding period. It is also ahead of consensus estimates.

Another positive is that its visitation and Google search shares continue to improve. And while North America is mixed, it sees the recent partnership with Allinial Global a positive. In addition, the ANZ region continues to track positively.

In addition, Goldman notes that Xero’s cost reduction program is coming along nicely, with its workforce reducing meaningfully since the announcement. It points out that since March it has “seen Xero’s Linkedin workforce decrease by c.14% to 5.1k.”

Finally, its analysts highlight that “despite recent price increases, Xero is still inline with peers, with no historical impact on churn.”

All in all, the broker believes Xero is a great option for investors and well-placed to grow into its NZ$76 billion addressable market.

The post Conviction list: Goldman Sachs says Xero share price can rise 37% appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Supercharge your portfolio with these 3 ASX growth shares: brokers
• Could buying Xero shares at under $95 make me rich?
• The ASX 200 tech stock to buy now before a massive revival
• Why Goldman Sachs is raving about these ASX growth shares
• Morgans names the best ASX 200 growth shares to buy in April

Motley Fool contributor James Mickleboro has positions in Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Xero. The Motley Fool Australia has positions in and has recommended Xero. 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://ift.tt/qIOaliE

If you’re a regular reader of The Motley Fool you might be sick of hearing the instruction “buy then hold for the long term”.

But boring you to death with repetition doesn’t make it any less true — especially in volatile times like these.

So you might be surprised that many fund managers and investment advisors like to make short-term predictions much more than long-term forecasts.

That’s because they are measured on their performance on a monthly, quarterly, and yearly basis. They can’t afford to be patient — otherwise they’ll lose customers!

However, one prominent member of the industry recently stuck his neck out.

Nucleus Wealth chief investment officer Damien Klassen this month examined what could happen in the years beyond the current economic downturn.

He then extrapolated those trends into specifically what type of ASX shares investors should buy now to reap massive gains in those years.

Back to the future 

So what will the world look like after the current down cycle?

Klassen, writing on the Nucleus blog, reckons the major deciding factor will be government responses to the coming global recession, downturn, or credit crunch.

“If there are significant direct fiscal interventions, as we saw during the pandemic, then inflation might return.”

But the chances are, according to Klassen, the 2020s will end up “a replay of the 2010s” with low inflation.

“High levels of inequality mean not much demand — the rich save extra income,” he said. 

“Central banks cut interest rates, hoping already leveraged consumers could take out even greater loans. Productivity gains don’t end up in wages.”

Unfortunately, Klassen forecasts that inequality is set to “stay for a while”. 

“In Australia, a left-wing government is increasing tax on low and middle-income earners while cutting the tax paid by the top brackets. It is similar globally. There are no signs of any broad backlash.”

Regardless of the macroeconomics, Klassen reckons there will be a major “game changer” for ASX companies in the next decade.

“The biggest potential positive for earnings is coming through artificial intelligence breakthroughs,” he said.

“The sudden introduction of artificial intelligence to hundreds of millions of people is bound to have significant productivity gains.”

Whether this is seen as a positive or a negative revolution is somewhat subjective.

“The difference vs the 2010s, for an investor, is that this time it is the service industries that look like they will benefit the most from the productivity gains,” said Klassen.

“Or lose the most from job losses, depending on how you want to frame it.”

Not value, not growth, but…

So what does all this mean in selecting ASX shares to buy right now?

Keeping in mind that Klassen is referring to long-term prospects, he advised staying away from value stocks.

“They tend to be the stocks with the least pricing power. Productivity gains will be competed away for most value stocks.”

But that doesn’t mean it’s a wholesale flight to growth either.

“It will be hit-and-miss with this group due to changing business models,” he said.

“But, given we are talking about stocks to buy as economies recover from the recession, it will be worth having some growth in your sights for at least the initial stages of the recovery.”

The common denominator for the stocks Klassen would pick up are that they all represent quality businesses.

“These are the stocks with pricing power, higher margins and better returns on equity.”

There are definitely businesses he would avoid at all costs.

“I would be careful buying intermediaries or wholesalers,” he said.

“The internet has spent the last 20 years trying to disintermediate these companies. Any surviving companies should be worried that improved access to artificial intelligence will finish the job.”

As for sectors, there are a bunch that will benefit from paying for fewer humans in return for the same production: information technology, media, legal, transport, healthcare, and finance.

“Advertising and [copywriting] will have their staff numbers halve for the same output. Media creation will become cheaper and easier,” said Klassen.

“Finance will continue to see job losses in customer service roles. In corporate finance, stock broking and funds management, the rainmakers will be more productive and need less support staff.”

Klassen reminded, though, that there is still plenty of volatility to swim through before these long-term predictions will hit the mark.

“We have a credit crunch to navigate first,” he said.

“But we can clearly see where the next wave of productivity enhancements comes from. And they will likely underpin reasonably significant earnings growth after the credit crunch.”

The post The ASX shares that will win in the long term appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 5 things to watch on the ASX 200 on Thursday
• Here are the top 10 ASX 200 shares today
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• Should I invest in the ASX 200 or the S&P 500?

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

from The Motley Fool Australia https://ift.tt/BgyhC6R

Mineral Resources Ltd (ASX: MIN) shares could offer big returns to investors that aren’t averse to investing in the mining sector.

That’s the view of analysts at Morgans, which have named the mining and mining services company as one of their top picks from this side of the market.

Iron ore looking good

According to the note, the broker believes that iron ore has come out of its slump in great shape. It commented:

While the market remains concerned with comments from the Chinese government around capping steel output at 2022 levels, we note that those levels are quite healthy – particularly when coupled with iron ore supply risks. The pullback in Chinese steel production has not matched the level of market pessimism around China growth, with monthly steel production still around a solid base of 80mt.

China iron ore stockpiles at port remain at healthy levels, suggesting increased iron ore imports are being consumed. On the back of these evolving fundamentals, with iron ore prices demonstrating a higher watermark than we previously expected, we have upgraded our forecasts.

Mineral Resources share price could leap higher

Morgans sees a lot of value in Mineral Resources shares at the current level.

It has an add rating and $106.00 price target, which, based on its current share price of $84.31, implies potential upside of almost 26% for investors.

Making things even better, Morgans is expecting some big fully franked dividend yields in the near future. It estimates that its shares will provide yields of 4.4% in FY 2023 and 8% in FY 2024.

The broker explained why the company is its top pick right now:

MIN is our top pick amongst the iron ore sector, where we see growth from its Onslow Iron project as likely to increase materiality of iron ore to earnings. MIN’s share price has ‘shrugged off’ the disappointing news around the recent gas appraisal well (Lockyer-2). Perhaps suggesting investors do not attribute material value to MIN’s energy prospects (at least relative to the sell-side).

We continue to see MIN as a business that is over half way through a material transformation. Now delivering on its lithium growth objectives, and progressing construction of its Onslow Iron project, we expect MIN to grow group production at 10% CAGR over the next 3 years.

The post Why Mineral Resources shares are a ‘top pick’ for this broker appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Here are the top 10 ASX 200 shares today
• Here’s the latest forecast for ASX 200 lithium stocks from UBS
• Get big gains and huge dividends from these ASX 200 mining shares: brokers
• Why Core Lithium, Neuren, Norwest, and Pilbara Minerals shares are pushing higher
• A ‘new entry point’ just opened for 2 ASX 200 shares with strong outlooks

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://ift.tt/PTK1hyz