• Experts name 2 ASX 50 shares to buy

    a man raises his fists to the air in joyous celebration while learning some exciting good news via his computer screen in an office setting.

    a man raises his fists to the air in joyous celebration while learning some exciting good news via his computer screen in an office setting.

    The ASX 50 index is home to many of the highest quality companies that the Australian share market has to offer.

    And while not all shares in the index are necessarily in the buy zone right now, two that could be are listed below.

    Here’s why analysts rate these ASX 50 shares as buys:

    CSL Limited (ASX: CSL)

    The first ASX 50 share to consider is CSL. It is one of the world’s leading biotechnology companies, comprising the CSL Behring, CSL Vifor, and Seqirus businesses.

    As well as having a portfolio filled to the brim with high quality therapies, CSL invests 10%-11% of its sales back into research and development activities each year. This ensures that the company has a large number of potentially lucrative therapies under development, supporting its future growth.

    Citi is positive on CSL and currently has a buy rating and $340.00 price target on its shares.

    Telstra Corporation Ltd (ASX: TLS)

    Another ASX 50 share that is rated highly is telco giant Telstra.

    For some time, this telco giant was going backwards with its earnings. However, thanks to the success of its T22 strategy, Telstra returned to underlying growth at long last in FY 2022. And with its new strategy aiming to deliver strong and sustainable earnings growth over the coming years, Telstra’s outlook is arguably the best it has been in over a decade.

    Morgans is positive on the company and believes that its shares are undervalued at the current level. Especially given its restructure, which aims to unlock value from its assets.

    Morgans currently has an add rating and $4.60 price target on Telstra’s shares.

    The post Experts name 2 ASX 50 shares to buy appeared first on The Motley Fool Australia.

    Wondering where you should invest $1,000 right now?

    When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.* Scott just revealed what he believes could be the “five best ASX stocks” for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now

    See The 5 Stocks
    *Returns as of November 1 2022

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    Motley Fool contributor James Mickleboro has positions in CSL Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL Ltd. The Motley Fool Australia has positions in and has recommended Telstra Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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  • Why this fundie has been buying up Qantas shares

    A couple are running late for their flight as they rush to the gate.A couple are running late for their flight as they rush to the gate.

    A fund manager has outlined why he has been buying up ASX airline Qantas Airways Limited (ASX: QAN) shares.

    Qantas shares are lifting 1.72% today. For perspective, the S&P/ASX 200 Index (ASX: XJO) is 0.1% in the green today.

    So what does this fundie have to say about Qantas?

    COVID recovery

    Qantas shares may benefit from the COVID-19 travel recovery, according to this portfolio manager.

    Stuart Welch, portfolio manager at Alphinity Investment Management revealed this week his team has bought up Qantas shares.

    Explaining this, Welch said:

    Despite a more difficult outlook for the consumer, I do think there is a COVID recovery story at play here, which after a few fits and spurts is actually underway.

    October travel data, released by the ABS on Tuesday, shows overseas arrivals to Australia surged 13% on the previous month to more than 1.2 million. Overseas departures descended 1.9% to 1.02 million. The ABS noted this data is provisional.

    Speaking on the travel recovery, Welch said:

    It was led by visiting friends and family, but it has expanded into leisure, business travel and even more recently into the international side.

    Back in September 2021, only 18,850 people arrived in Australia while 30,330 left the country. Australia opened its international borders in February this year.

    Qantas shares have had a turbulent week amid proposed Federal Government industrial relations reforms.

    Qantas is arguing potential changes would “destroy demand” for flying due to higher costs. The airline said:

    For the Qantas Group, it will almost certainly mean less flying because costs will rise and demand will be destroyed – particularly on marginal routes. This will result in less investment and fewer jobs in aviation, with a flow on effect for communities and tourism.

    Qantas share price snapshot

    Qantas shares have surged nearly 18% in the year to date, while they have climbed 5% in a year.

    For perspective, the ASX 200 has fallen 3% in the past year.

    Qantas has a market capitalisation of about $11.1 billion based on the current share price.

    The post Why this fundie has been buying up Qantas shares appeared first on The Motley Fool Australia.

    Wondering where you should invest $1,000 right now?

    When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.* Scott just revealed what he believes could be the “five best ASX stocks” for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now

    See The 5 Stocks
    *Returns as of November 1 2022

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    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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  • 3 ASX 200 shares that announced supersized dividends this week

    A person is weighed down by a huge stack of coins, they have received a big dividend payout.A person is weighed down by a huge stack of coins, they have received a big dividend payout.

    It’s been a big week of earnings and plenty of S&P/ASX 200 Index (ASX: XJO) shares have made the most of the action, with some declaring whopping dividends. One stock even upped its full-year dividends by an enormous 200%.

    So, how much can shareholders look forward to receiving and how can market watchers get in on the action?

    Here’s all you need to know about the ASX 200 dividend shares revealing monster payouts this week.

    3 ASX 200 shares upping their dividends this week

    There have been earnings from plenty of ASX 200 shares this week, but these three stunned the market with soaring dividends.

    First out the gates is agriculture company GrainCorp Ltd (ASX: GNC).

    It doubled its earnings before interest, tax, depreciation, and amortisation (EBITDA) year-on-year, coming in at $703 million. On top of that, the company’s after-tax profit jumped 174% to $380 million. It likely comes as no surprise then, that the ASX 200 share also upped its dividend significantly.

    Astoundingly, its full-year dividends tripled, coming in at 54 cents per share – up from 18 cents per share in financial year 2021.

    GrainCorp doesn’t trade ex-dividend until 29 November. That means interested market watchers still have time to jump on board and receive the offering.

    Next up is Aristocrat Leisure Limited (ASX: ALL).

    The ASX 200 staple posted a 20% jump in normalised EBITDA, coming in at $1.85 billion, and a 31% increase in normalised after-tax profits, lifting to $1 billion in financial year 2022.

    The company also posted a notably larger full-year dividend, coming in at 52 cents per share. That marks a 27% jump on financial year 2021’s 41 cents per share.

    Aristocrat Leisure trades ex-dividend on 30 November.

    Finally, ASX 200 crop protection and seed technology company Nufarm Ltd (ASX: NUF) more than doubled its full-year dividends this week.

    Its underlying EBITDA soared 24% last financial year to $447 million while its profit jumped 65% to $107.4 million.

    Meanwhile, the ASX 200 company offered investors 10 cents per share of dividends for the period – up 150% from financial year 2021’s 4 cents per share.

    The stock will be the first of the three to trade ex-dividend. New investors will miss out on the payout from 24 November.

    The post 3 ASX 200 shares that announced supersized dividends this week appeared first on The Motley Fool Australia.

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    *Returns as of November 1 2022

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

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  • Here are the 3 most heavily traded ASX 200 shares on Thursday

    Three miners wearing hard hats and high vis vests take a break on site at a mine as the Fortescue share price drops in FY22Three miners wearing hard hats and high vis vests take a break on site at a mine as the Fortescue share price drops in FY22

    It’s been a positive, if bumpy, day for the S&P/ASX 200 Index (ASX: XJO) so far this Thursday.

    After three straight sessions of losses, it looks as though the ASX 200 might just eke out a gain this session. At the time of writing, the index has gained 0.1% to 7,129 points.

    But let’s now delve a little deeper into these market moves by checking out the shares currently at the top of the ASX 200’s share trading volume charts, according to investing.com.

    The 3 most traded ASX 200 shares by volume this Thursday

    Pilbara Minerals Ltd (ASX: PLS)

    Our inaugural share today is none other than the ASX 200 lithium producer Pilbara Minerals. A decent 16.3 million Pilbara shares have swapped hands as it currently stands. Unlike many mining shares, Pilbara is currently enjoying some gains today, with the shares up an uninspiring 0.2% at $4.93.

    This comes after the company announced its latest lithium auction results last night after market close. Pilbara was able to net even more for its product in this auction than what it received for the previous month. No wonder investors are impressed. This is the most likely explanation for the elevated volumes we are witnessing.

    South32 Ltd (ASX: S32)

    Our next ASX 200 share worth taking a look at today is the mining giant South32. So far this Thursday, a chunky 17.18 million South32 shares have been swapped on the ASX boards.

    There’s been no fresh news or announcements out of South32 itself today. But that hasn’t stopped the company losing a depressing 5%, putting its shares at $4.01 at present.

    As my Fool colleague Brooke dug into this morning, this could be due to rumours the government is considering bringing in a new mining tax. We can probably thank this steep drop in share price for the high volumes we are seeing out of South32.

    Core Lithium Ltd (ASX: CXO)

    Finally this Thursday, we have the ASX 200 lithium share Core Lithium. This session has had a weighty 25.44 million Core Lithium shares exchanged so far. This looks to be a consequence of the nasty sell-off Core Lithium continues to wade through.

    Today, the lithium producer has had another 4% wiped off its value, leaving it at $1.42 a share. Core Lithium has now fallen by a nasty 24% since just Monday. This could be in response to some tough love from an ASX broker.

    The post Here are the 3 most heavily traded ASX 200 shares on Thursday appeared first on The Motley Fool Australia.

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    Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has 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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  • Which stocks are in the Vanguard Australian Shares Index ETF (VAS) right now?

    The letters ETF sit in orange on top of a chart with a magnifying glass held over the top of it

    The letters ETF sit in orange on top of a chart with a magnifying glass held over the top of itThe Vanguard Australian Shares Index ETF (ASX: VAS) is the most popular exchange-traded fund (ETF) on the ASX by a large margin. So we know from the name itself that this ETF invests in Australian ASX shares. But which ones exactly? Time for a deep dive into the Vanguard Australian Shares ETF.

    So the Vanguard Australian Shares Index ETF is an index fund at its core, as the name suggests. Instead of the more pervasive S&P/ASX 200 Index (ASX: XJO), this ETF instead follows the S&P/ASX 300 Index (ASX: XKO).   

    Thus, every share in the ASX 300 is also found in the underlying portfolio of the Vanguard Australian Shares ETF.

    The ASX 300 is similar to the ASX 200, but instead of following the top 200 ASX shares on the share market by market capitalisation, it includes an additional 100 shares from the lower end of the market. This adds diversification and scope at the expense of weightings towards the top end of the ASX.

    For example, the ASX’s largest share, BHP Group Ltd (ASX: BHP), would have a weighting of around 10.4% in an ASX 200 ETF today. But in Vanguard’s ASX 300 ETF, BHP only represents 9.02% of the portfolio at present. A small but significant difference.

    Which ASX stocks make up the Vanguard Australian Shares ETF?

    But let’s get into the weeds of the Vanguard Australian Shares ETF. So as of 31 October, these were the top ten holdings of the fund and their weightings in the fund’s portfolio:

    1. BHP with a portfolio weighting of 9.02%
    2. Commonwealth Bank of Australia (ASX: CBA) with a weighting of 8.53%
    3. CSL Limited (ASX: CSL) with a weighting of 6.45%
    4. National Australia Bank Ltd (ASX: NAB) with a weighting of 4.91%
    5. Westpac Banking Corp (ASX: WBC) with a weighting of 4.03%
    6. Australia and New Zealand Banking Group Ltd (ASX: ANZ) with a weighting of 3.65%
    7. Woodside Energy Group Ltd (ASX: WDS) with a weighting of 3.26%
    8. Macquarie Group Ltd (ASX: MQG) with a weighting of 2.94%
    9. Wesfarmers Ltd (ASX: WES) with a weighting of 2.46%
    10. Telstra Group Ltd (ASX: TLS) with a weighting of 2.16%

    So that’s the top ten. But following these companies, there are names like Woolworths Group Ltd (ASX: WOW), Rio Tinto Limited (ASX: RIO), Fortescue Metals Group Limited (ASX: FMG) and Coles Group Ltd (ASX: COL) all in the top 20.

    Like all index funds, constituents in the Vanguard Australian Shares ETF depend on the weightings of the index itself. So if a company does badly and its share price falls, its weighting in the index (and thus, the ETF) will also fall. Conversely, shares that are doing well will also rise over time.

    That’s why NAB, for example, is now the second-largest ASX bank share, where it was in fourth place just a few years ago. This makes an index ETF like this one a perfect ‘bottom drawer’ investment since it requires very little diligence from the investors themselves.   

    The post Which stocks are in the Vanguard Australian Shares Index ETF (VAS) right now? appeared first on The Motley Fool Australia.

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    *Returns as of November 7 2022

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    Motley Fool contributor Sebastian Bowen has positions in CSL Ltd., National Australia Bank Limited, and Telstra Corporation Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL Ltd. The Motley Fool Australia has positions in and has recommended COLESGROUP DEF SET, Telstra Corporation Limited, and Wesfarmers Limited. The Motley Fool Australia has recommended Macquarie Group Limited and Westpac Banking Corporation. 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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  • Why is the Westpac share price tumbling on Thursday?

    A businesswoman holding a briefcase rests her head against the glass wall of a city building, she's not having a good day.

    A businesswoman holding a briefcase rests her head against the glass wall of a city building, she's not having a good day.

    The Westpac Banking Corp (ASX: WBC) share price is on course to end the day in the red.

    In afternoon trade, the banking giant’s shares are down 2.5% to $23.25.

    Why is the Westpac share price dropping?

    The good news for shareholders is that the weakness in the Westpac share price today is not because something bad has happened.

    In fact, it’s actually for a good reason! This morning Westpac’s shares traded ex-dividend for its upcoming final dividend payment.

    This means that the rights to this dividend remain with whoever was the owner of the shares at yesterday’s close. So, if you buy a parcel of shares today, you’ll not receive this dividend when it is paid and the seller will receive it instead.

    Clearly, you don’t want to pay for something that you won’t receive. So, to account for this, the Westpac share price has dropped to reflect it.

    Actually, had its shares not traded ex-dividend this morning, they would likely be trading higher today. That’s because the Westpac share price has dropped by 59 cents, but its dividend payment is even greater.

    The Westpac dividend

    Earlier this month, Westpac declared a fully franked final dividend of 64 cents per share. This was up from 60 cents per share a year earlier.

    If you didn’t take part in the bank’s dividend reinvestment plan, you can look forward to receiving these dividends in your nominated bank account in just over a month on 20 December. Just in time for some last minute Christmas shopping if you’re celebrating the holiday season!

    The post Why is the Westpac share price tumbling on Thursday? appeared first on The Motley Fool Australia.

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    Motley Fool contributor James Mickleboro has positions in Westpac Banking Corporation. 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 Corporation. 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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  • Why has ASX lithium share Winsome Resources rocketed 220% in a month?

    Woman attached to rocket flies into the airWoman attached to rocket flies into the air

    ASX lithium share Winsome Resources Ltd (ASX: WR1) has rocketed 220% since this time last month.

    Yep, that’s no typo. It’s also up 25% so far today.

    So, what’s driving investor interest in the lithium stock?

    Why has this ASX lithium share soared 218% in a month?

    The Winsome Resources share price has been a clear beneficiary of the rocketing demand for lithium. As nations around the world ramp-up electric vehicle production, the price of the battery-critical metal is trading at all-time highs.

    And, according to a report by the Australian government, investors can expect lithium prices to charge even higher into 2023 before moderating in 2024 as supply begins to catch up with demand.

    While that’s benefited most ASX lithium shares, Winsome Resources has gained far more than the average.

    The explorer’s share price really took off on 28 October. That came after the company reported it has identified significant pegmatite intercepts in a drilling campaign at its Adina and Cancet lithium projects, located in Canada.

    As additional promising data from the exploratory drilling came in over the following days, the ASX lithium share continued to power higher.

    Why is Winsome Resources raising capital?

    If you tried to buy or sell shares in Winsome Resources recently, you may have noticed the company was in a trading halt on Friday and Monday.

    Shares began trading again on Tuesday when the explorer announced a $6.8 million capital raise.

    The funds will be raised via the “Flow-Through Shares” provisions under Canadian tax law at $1.67 per share. That’s 54% higher than the current share price of $1.09.

    Winsome said the new shares in the ASX lithium explorer “will be immediately on-sold through a block trade agreement to select high-quality domestic and offshore institutional investors”.

    Commenting on the capital raise, Winsome Resources managing director Chris Evans said:

    This capital raise comes at an ideal time for the Company and allows us to secure funds under a very attractive arrangement facilitated through the Canadian Government’s generous tax incentives for mining exploration companies. It allows us to raise capital at a premium price without the level of dilution that would occur via a standard, share placement offer.

    Winsome Resources share price snapshot

    Winsome Resources listed on the ASX just under a year ago, on 30 November 2021.

    Since then, the ASX lithium share has gained 193%. Over that same period, the All Ordinaries Index (ASX: XAO) has lost 3%.

    The post Why has ASX lithium share Winsome Resources rocketed 220% in a month? appeared first on The Motley Fool Australia.

    Wondering where you should invest $1,000 right now?

    When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.* Scott just revealed what he believes could be the “five best ASX stocks” for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now

    See The 5 Stocks
    *Returns as of November 1 2022

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

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  • Why is the Altium share price charging higher?

    The Altium Limited (ASX: ALU) share price has been a strong performer on Thursday.

    In afternoon trade, the electronic design software company’s shares are up 3% to $37.60.

    Why is the Altium share price rising?

    Investors have been bidding the Altium share price higher on Thursday following the release of the company’s annual general meeting update.

    As you might have guessed from the performance of its shares today, management revealed that it has started FY 2023 strongly.

    Altium’s CFO, Richard Leon, commented:

    [T]hrough the first four months of FY23 we have seen very good performance. For our PCB business, average revenue per user, or “ARPU” is trending upward as our mainstream customers continue to adopt Pro-level platform subscriptions. Adoption of Altium 365, our cloud platform, also continues to grow, as does the count of users per account, creating a network effect.

    Leon revealed that the only thing that isn’t going in the company’s favour is the strong US dollar, which is causing foreign exchange headwinds. Nevertheless, the CFO believes is “entirely manageable” and not holding Altium back from achieving its half or full year objectives.

    Speaking of which, Leon provided some colour on what to expect for FY 2023. He revealed that Altium is on track to achieve its guidance, stating:

    We expect total revenue to be between $255 and $265 million USD, with both our PCB software business and cloud platform business growing nicely. And, we expect underlying EBITDA margin to be between 35 and 37% for the full year in FY23.

    Long term goals

    The company’s chairman, Sam Weiss, also provided the market with an update on its longer term goals.

    As some readers will be aware, Altium has set itself the goal of achieving revenue of US$500 million and subscribers of 100,000 by 2026.

    However, it has now amended this slightly. While it continues to target revenue of US$500 million, it believes it will only need a base of 75,000 to 90,000 subscribers to hit this goal. This is based on an average price of between $3,000 and $3,500 per subscriber.

    The post Why is the Altium share price charging higher? appeared first on The Motley Fool Australia.

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    *Returns as of November 10 2022

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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 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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  • Guess which ASX lithium share exploded 67% today

    A woman's head literally explodes with goodness.A woman's head literally explodes with goodness.

    The S&P/ASX 200 Materials Index (ASX: XMJ) is in the red today, down 1.18%. But this ASX lithium share is bucking the trend.

    The Burley Minerals Ltd (ASX: BUR) share price is on the rise by 25% today to 30 cents. However, in earlier trade, Burley Minerals shares skyrocketed 67% to 40 cents.

    So why is this ASX lithium share having such a top run today?

    Acquisition news for lithium explorer

    Investors are buying up Burley shares today on lithium acquisition news. Burley has entered an “exclusive agreement” to take ownership of 100% of the Chubb Lithium Project in Quebec, Canada.

    Further, under the deal, Burley would also acquire the Mt James and Dragon Projects, prospective for lithium, in the Gascoyne region of Western Australia.

    The project widens Burley’s exploration pipeline to high-grade lithium-bearing spodumene projects.

    Drilling at the Chubb Lithium project has shown the presence of spodumene-bearing lithium pegmatites.

    Burley is also an iron ore explorer, with a 70% stake in the Yerecoin Project near Perth in Western Australia.

    Commenting on today’s news, Burley managing director Wayne Richards said:

    We are very pleased to announce the signing of this Agreement to acquire such high-potential Lithium Projects in jurisdictions complemented by other major Lithium explorers and developers.

    The strategic and geographic location of all three potential projects are located in world class mining provinces and in Tier 1 jurisdictions of Australia and Canada.

    ASX lithium share Burley’s share price snapshot

    Burley Minerals has soared 27% in a year, while it has surged 46% in the year to date. In the past month, the company’s share price has rocketed ahead 122%.

    For perspective, the ASX 200 Materials Index has climbed 14% in a year.

    This ASX lithium share has a market capitalisation of about $10.3 million based on the current share price.

    The post Guess which ASX lithium share exploded 67% today appeared first on The Motley Fool Australia.

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    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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  • This fund manager prefers NAB shares over the other ASX 200 banks. Here’s why

    A little girl holds on to her piggy bank, giving it a really big hug.A little girl holds on to her piggy bank, giving it a really big hug.

    National Australia Bank Ltd (ASX: NAB) shares have been among a select group of S&P/ASX 200 Index (ASX: XJO) stocks that have benefited from rising interest rates this year.

    Prior to the RBA’s first rate increase in more than a decade on 4 May, Australia’s official cash rate stood at the rock bottom 0.10%.

    While the banks obviously charge higher rates for their loans, and offer less on their deposits, the historically low cash rate squeezed their net lending margins. So as rates have climbed, the banks’ net interest margins have broadly increased. Which has offered a welcome tailwind for NAB shares.

    Yet, while all the ASX 200 banks have benefited from higher rates, Andrew Martin, principal of Alphinity Investment Management, told The Motley Fool he prefers NAB shares over the other big bank stocks. (Stay tuned for the full interview, next week.)

    Why NAB rather than some of the other ASX 200 bank shares?

    Martin said, “The banks are one of the few sectors that are getting [earnings] upgrades. Banks are beneficiaries of higher rates. That’s still playing through.”

    He added that NAB had done “particularly well, in a relative sense” in the current environment.

    So, why NAB rather than one of the other ASX 200 bank shares?

    According to Martin:

    I think NAB is executing better. They have really reinvented themselves over the last five years.

    They’ve reclaimed their title as the best business bank in the country. Business is actually going really well, despite everything else that’s going on. They’ve managed to have a better margin outcome than their peers. And they’ve managed their costs better. So their growth trajectory looks better than some of the others.

    At the current price, NAB shares pay a trailing dividend yield of 5.0%, fully franked.

    How has NAB been performing?

    Despite underperforming some analyst expectations, NAB reported strong FY 2022 results last week.

    Among the highlight, cash earnings increased 8.3% from the prior year to $7.1 billion. Statutory net profit was also up 8.3% from FY 2021 to $6.9 billion. And the bank reported an exit net interest margin of 1.72%.

    Year to date, NAB shares have gained around 4% while the ASX 200 has lost 6%.

    The post This fund manager prefers NAB shares over the other ASX 200 banks. Here’s why appeared first on The Motley Fool Australia.

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

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