At the start of each week, I like to look at ASIC’s short position report to find out which shares are being targeted by short sellers.

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

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

• Pilbara Minerals Ltd (ASX: PLS) continues its long run as the most shorted ASX share with short interest of 20.8%. This is down week on week but still significantly higher than second place. The prospect of lithium prices remaining at current levels for years is spooking investors.
• IDP Education Ltd (ASX: IEL) has 13.5% of its shares held short, which is up week on week again. This language testing and student placement company has come under pressure after revealing that it is being negatively impacted by student visa changes in a number of key markets.
• Liontown Resources Ltd (ASX: LTR) has 11.3% of its share held short, which is up week on week again. This lithium developer is potentially only a matter of weeks away from commencing production at the Kathleen Valley Lithium Project. Given how low lithium prices are, this may not be the best time to start activities.
• Westgold Resources Ltd (ASX: WGX) has short interest of 10.5%, which is up for a seventh week in a row. This appears to have been driven by doubts over the gold miner’s proposed merger with Canada-based Karoa Resources. Nevertheless, Westgold Resources shares are up 76% over the last 12 months.
• Sayona Mining Ltd (ASX: SYA) has short interest of 9.8%, which is up since last week. Short sellers have been going after this lithium miner after it revealed that it is paying more to produce lithium than it receives from buyers.
• Flight Centre Travel Group Ltd (ASX: FLT) has seen its short interest ease to 9.6%. Doubts over its ability to achieve revenue margin expectations could be weighing on this travel agent’s shares.
• Syrah Resources Ltd (ASX: SYR) has short interest of 9.5%, which is down week on week. This graphite miner is being negatively impacted by weak battery materials prices. This has led to production suspensions and further cash burn.
• Chalice Mining Ltd (ASX: CHN) has short interest of 9.4%, which is down week on week. This mineral exploration company’s shares are down almost 80% over the last 12 months and short sellers appear to believe further declines are coming.
• Strike Energy Ltd (ASX: STX) is back in the top ten with 8.5% of its shares held short. This gas company’s shares have been hammered in 2024 amid disappointment over drilling at the SE-3 well.
• Australian Clinical Labs Ltd (ASX: ACL) has short interest of 8.4%, which is flat since last week. This health imaging company is expecting to report another sizeable decline in earnings in FY 2024.

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

More reading

• Pilbara Minerals shares: Buy or Sell?
• 5 things to watch on the ASX 200 on Monday
• What’s ahead for ASX 200 travel shares in FY 2025?
• These ASX shares could rise 20% and ~40%
• Why Guzman y Gomez, KMD, Mineral Resources, and Pilbara Minerals shares are sinking

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 Idp Education. The Motley Fool Australia has recommended 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.

Westpac Banking Corp (ASX: WBC) is a popular ASX dividend stock because of its large dividends and major market presence in the banking sector.

In fact, I’d guess some investors have heavily weighted their portfolios to include Westpac and other ASX bank shares like Commonwealth Bank of Australia (ASX: CBA) and National Australia Bank Ltd (ASX: NAB). It could be a good idea to diversify.

I think investing in banks is largely a bet on Australian property. If Aussies have most of their wealth tied up in owning one or more properties, then investing in ASX bank shares as well doesn’t add much diversification to the underlying risks.

If investors want some dividend diversification, I’d suggest the below two stocks as options.

GQG Partners Inc (ASX: GQG)

GQG is one of the largest listed fund managers on the ASX. It is headquartered in the United States but expanding to places like Australia and Canada.

The business is able to achieve a high dividend yield because it’s committed to a dividend payout ratio of 90% of distributable earnings.

It’s focused on growing funds under management (FUM) through strong investment performance and attracting more funds. The strong returns are helping GQG appeal to investors and get them to allocate more money to the fund manager.  

GQG reported that its FUM had grown to US$150.1 million as at 31 May 2024 and that it had experienced net inflows of US$9.1 billion in the calendar year to date.

The ASX dividend stock’s payout has been climbing since it started paying a dividend in 2022. According to Commsec, it’s projected to pay a dividend yield of 8.5% in FY26.

Universal Store Holdings Ltd (ASX: UNI)

I think Universal Store is one of the more impressive ASX retail shares because it has continued to grow its dividend despite challenging conditions.

It is utilising its brands well to grow its sales and profit. The company is best known for its Universal Store stores which sell premium youth clothes. Universal Store also has a business called CTC, which trades under the THRILLS and Worship brands. It’s also rolling out Perfect Stranger as a standalone format.

In the FY24 first-half result, Perfect Stranger sales increased by approximately 60% to $6.6 million, helping the company’s total sales rise by 8.5% to $158 million. The statutory net profit after tax (NPAT) rose 16.7% to $20.7 million, showing the company’s scalability.

The ASX dividend stock’s payout has grown each year since it first started paying a dividend in 2021.

According to the estimate on Commsec, Universal Store is expected to pay a grossed-up dividend yield of 7.3% in FY24 and 9.25% in FY26.

The post Overinvested in Westpac shares? Here are two alternative ASX dividend stocks appeared first on The Motley Fool Australia.

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• Buy these ASX dividend shares for 5% to 6% yields
• 2 ASX 200 bank shares smashing new multi-year highs today

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

The ASX dividend share Metcash Ltd (ASX: MTS) may provide a high level of passive income to investors in the coming years for two key reasons.

Now, Metcash may not be a household name, but the company supports many well-known food and drink retailers in Australia.

The ASX dividend share supplies IGA supermarkets around Australia and also supplies numerous Independent Brands Australia (IBA) liquor businesses including Cellarbrations, The Bottle-O, IGA Liquor and Porters Liquor. The IBA retail network has more than 1,800 ‘tier one’ bannered stores across Australia and New Zealand.

Metcash also owns several hardware brands, including Mitre 10, Home Timber & Hardware, and Total Tools. It supports independent operators under the small-format convenience banners Thrifty-Link Hardware and True Value Hardware and a number of unbannered independent operators.

Due to its exposure to these industries, I think the ASX dividend share can generate fairly resilient profits. In addition, the company’s dividend yield is expected to be high in the next few financial years. Let’s investigate.

1. High dividend payout ratio

Every profitable company needs to decide its dividend policy. It can choose to pay a larger or smaller dividend than the previous year, simply pay out a particular percentage of its net profit after tax (NPAT) each year, or not pay a dividend at all.

Metcash’s board of directors has decided on a healthy dividend payout ratio of 70% of underlying NPAT. I think that’s high enough to deliver a pleasing dividend yield while still keeping some profit within the business to reinvest for more growth.

According to CMC Markets, Metcash is projected to pay a dividend per share of 21.9 cents in FY26. This translates into an expected grossed-up dividend yield of around 8.25%.

2. Low earnings multiple

A higher price/earnings (P/E) ratio can push down the yield, while a lower P/E ratio can lead to a higher dividend yield from an ASX dividend share.

Metcash usually trades on a relatively low P/E ratio compared to some of its peers.

The estimates on CMC Markets suggest the ASX dividend share could generate earnings per share (EPS) of 28.1 cents in FY24 and 30.4 cents in FY26. Those numbers would put the current Metcash share price at 13x FY24’s estimated earnings and 12x FY26’s estimated earnings.

These figures mean Metcash shares are much cheaper than some ASX blue chip stocks. For example, the Wesfarmers Ltd (ASX: WES) share price is valued at 30x FY24’s estimated earnings and the Woolworths Group Ltd (ASX: WOW) share price is valued at 24x FY24’s estimated earnings.

If Metcash can keep growing earnings over the longer term, then the valuation and dividend may appeal to investors.

The post This ASX dividend share could pay an 8% yield in 2026! appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in Metcash. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Wesfarmers. The Motley Fool Australia has positions in and has recommended Wesfarmers. The Motley Fool Australia has recommended Metcash. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The S&P/ASX 300 Index (ASX: XKO) stock G8 Education Ltd (ASX: GEM) may be a contender to deliver good returns, according to a lead portfolio manager from Wilson Asset Management.

G8 Education describes itself as one of Australia’s largest providers of quality early childhood education and care. It has more than 400 early learning centres across 21 brands.

As Oscar Oberg recently discussed in the Australian Financial Review, the childcare centre operator is an ASX 300 share that WAM is most bullish about.

Reasons to like the ASX 300 stock

WAM’s Oberg thinks G8 Education shares are the most undervalued by the market.

He acknowledged the company’s “struggle” with negative earnings per share (EPS) revisions and debt issues over the last decade. The company had even conducted a capital raising during COVID-19 in 2020.

WAM’s interest in G8 Education was piqued after the company appointed its new CEO, former BIG W managing director Pejman Okhovat.

According to the fund manager, Okhovat’s strategy for G8 Education was “relatively straightforward.” The company would aim to boost occupancy, stabilise costs, and divest underperforming childcare centres.

Oberg noted that G8 Education had a “very strong balance sheet” and could buy back between 5% to 10% of the shares on issue.

WAM’s research suggests this strategy can lead to the ASX 300 stock delivering organic EPS growth of between 10% to 15% each year over the next five years.

G8 Education share price valuation and upside

On WAM’s numbers, the G8 Education share price is valued on a forward price/earnings (P/E) ratio of 12 times, which Oberg described as “cheap”.

The fund manager believes the strong level of organic growth can deliver a re-rating to the G8 Education shares and raise the P/E ratio. It anticipates the G8 Education share price will have a “50% upside” in the next 12 to 24 months.

WAM’s positivity on the ASX 300 stock gives it a “large weighting” in the portfolio.

Commentary on the economic conditions

Oberg also had this to say about current economic conditions (courtesy of AFR):            

Conditions are quite patchy, especially for small-cap companies. This financial year represents the third year in a row that small caps will underperform the Australian market.

We do think that the tide will turn as soon as we see interest rates decline, and we saw an example of this from December 2023 to March 2024 where small caps had a great period.

The post Prediction: The ASX 300 stock with 50% upside! appeared first on The Motley Fool Australia.

More reading

• This ASX dividend share could pay an 8% yield in 2026!
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• Buy Coles and these ASX 200 dividend stocks
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• Income booster: Here’s an ASX dividend stock that yields 6% and provides quarterly cash payments

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

Investors that are on the lookout for big returns for their investment portfolios might want to check out the two shares named below.

Here’s what sort of returns brokers are tipping from them over the next 12 months:

Qantas Airways Limited (ASX: QAN)

Analysts at Goldman Sachs believe that this airline operator could provide investors with huge returns between now and this time next year.

The broker currently has a conviction buy rating and $8.05 price target on its shares. Based on its current share price of $6.09, this implies potential upside of 32% for investors. In addition, it is worth highlighting that Goldman believes that Qantas will bring back its dividend at long last in FY 2025. It is forecasting a 4.9% dividend yield for the financial year.

Goldman highlights that the Flying Kangaroo’s valuation is still lower than pre-COVID times despite having structurally and sustainably stronger earnings. In addition, it notes that its shares are trading at a sizeable discount to what investors are paying to own US airlines on Wall Street. It explains:

QAN is trading 4% below pre-COVID market capitalization with the enterprise value still 7% lower despite a structurally improved earnings capacity. Relative to regional/ US peers (median PE of 9.1x), QAN is trading on a 29% discount at 6.4x FY25 PE. This is more than 2x below the historical 5Y average discount of 14%. We expect this gap to narrow as QAN delivers earnings that are sustainably above pre-COVID levels and demonstrates ability/ willingness to distribute capital to shareholders while renewing the fleet.

Regis Resources Ltd (ASX: RRL)

If you are looking for exposure to the gold sector then it could be well worth checking out Regis Resources. It is one of Australia’s largest gold miners with a number of operating mines in Western Australia.

Bell Potter believes that the company is significantly undervalued at current levels and big returns could be on the cards for investors buying at today’s price. It has a buy rating and $2.80 price target on its shares, which implies potential upside of 54% over the next 12 months. It said:

As one of the largest ASX listed gold producers, we are attracted to its all-Australian asset portfolio and organic growth options which are unique at this scale. Furthermore, we see key opportunities in the fundamental, medium-term outlook and, in our view, these may also make RRL an appealing corporate target in the current conducive M&A environment.

The post Buy these ASX 200 shares that could rise 30%+ before it’s too late appeared first on The Motley Fool Australia.

More reading

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• How AI can help Qantas shares fly higher
• Could Qantas shares be poised to catch some Chinese tailwinds?
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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 Goldman Sachs Group. 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.

If you’re an income investor on the lookout for new portfolio additions, then read on.

That’s because listed below are three ASX 200 dividend stocks that analysts believe could be quality options for investors right now.

Here’s what they are forecasting from them in the near term:

Coles Group Ltd (ASX: COL)

Analysts at Morgans think that Coles could be an ASX 200 dividend stock to buy. It is of course one of the big two supermarket operators with over 800 stores across the country. Coles also has a large liquor network comprising almost 1,000 stores across brands such as First Choice and Liquorland.

Morgans currently has an add rating and $18.95 price target on its shares.

As for dividends, its analysts are forecasting Coles to pay fully franked dividends of 66 cents per share in FY 2024 and 69 cents per share in FY 2025. Based on the current Coles share price of $17.11, this will mean dividend yields of 3.85% and 4%, respectively.

Super Retail Group Ltd (ASX: SUL)

Goldman Sachs thinks that Super Retail could be an ASX 200 dividend stock to buy right now. It is the retail group behind popular store brands BCF, Macpac, Rebel, and Super Cheap Auto.

The broker currently has a buy rating and $17.80 price target on its shares.

Goldman is expecting the retailer to offer good dividend yields in the near term. It is forecasting fully franked dividends per share of 67 cents in FY 2024 and then 73 cents in FY 2025. Based on the latest Super Retail share price of $13.89, this will mean good yields of 4.8% and 5.25%, respectively.

Woodside Energy Group Ltd (ASX: WDS)

Over at Morgans, its analysts are also positive on Woodside Energy and see it as an ASX 200 dividend stock to buy this week. It is one of the world’s largest energy producers with high-quality operations across the globe.

Morgans’ analysts recently stated that they see “now as a good time to add to positions” following the recent underperformance of its shares. The broker has an add rating and $36.00 price target on them.

In respect to income, its analysts are forecasting Woodside to pay fully franked dividends of $1.25 per share in FY 2024 and then $1.57 per share in FY 2025. Based on its current share price of $27.52, this represents attractive dividend yields of 4.5% and 5.7%, respectively.

The post Buy Coles and these ASX 200 dividend stocks appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Monday
• Top ASX passive income shares to buy before June 30
• Top 10 most traded ASX shares and US stocks in May
• ASX 200 energy shares smashing the benchmark amid national gas crisis
• Mining, supermarkets, and property: 3 ASX 200 dividend stocks to buy

Motley Fool contributor James Mickleboro has positions in Woodside Energy Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group and Super Retail Group. The Motley Fool Australia has positions in and has recommended Coles Group and Super Retail Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

On Friday, the S&P/ASX 200 Index (ASX: XJO) finished the week on a positive note. The benchmark index rose 0.35% to 7,796 points.

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

ASX 200 expected to fall

The Australian share market looks set to fall on Monday following a mixed finish on Wall Street on Friday. According to the latest SPI futures, the ASX 200 is expected to open the day 16 points or 0.2% lower this morning. In the United States, the Dow Jones was up 0.05%, the S&P 500 edged 0.15% lower, and the Nasdaq dropped 0.2%.

Oil prices soften

ASX 200 energy shares Santos Ltd (ASX: STO) and Woodside Energy Group Ltd (ASX: WDS) could have a subdued start to the week after oil prices softened on Friday. According to Bloomberg, the WTI crude oil price was down 0.7% to US$80.73 a barrel and the Brent crude oil price was down 0.55% to US$85.24 a barrel. This couldn’t stop oil from recording its second weekly gain amid optimism gasoline demand.

Sell Pilbara Minerals shares

The Pilbara Minerals Ltd (ASX: PLS) share price remains overvalued according to analysts at Goldman Sachs. In response to news of its P2000 lithium expansion, the broker has reaffirmed its sell rating and $2.80 price target. This implies potential downside of 10% for investors from current levels. The broker commented: “We see the study result for the next leg of expansion as underwhelming vs. market expectations on a combination of capex, size, and timing.”

Gold price tumbles

It could be a tough start to the week for ASX 200 gold shares including Newmont Corporation (ASX: NEM) and Northern Star Resources Ltd (ASX: NST) after the gold price tumbled on Friday. According to CNBC, the spot gold price was down 1.6% to US$2,331.2 an ounce. This was driven by a stronger US dollar and higher treasury yields.

Paladin Energy could be takeover target

ASX 200 uranium producer Paladin Energy Ltd (ASX: PDN) will be one to watch on Monday. That’s because the miner could potentially be a takeover target for a large industry player according to reports in the AFR. The media outlet has suggested that Canada’s Fission Uranium Corp (TSX: FCU) could have its eyes on the company. Paladin Energy has projects in Africa, Australia, and Canada.

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

More reading

• Here’s how the ASX 200 market sectors stacked up last week
• These ASX shares could rise 20% and ~40%
• Top ASX passive income shares to buy before June 30
• Why Guzman y Gomez, KMD, Mineral Resources, and Pilbara Minerals shares are sinking
• Top 10 most traded ASX shares and US stocks in May

Motley Fool contributor James Mickleboro has positions in Woodside Energy Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. 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.