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The Telstra Group Ltd (ASX: TLS) share price has been sluggish over the past year, falling by 20%. This leading telco stock has underperformed the S&P/ASX 200 Index (ASX: XJO), which is up 7% during the same period. At the time of writing, the Telstra share price is trading at $3.48.

Telstra offers a dividend yield of 5.03%, surpassing the Reserve Bank of Australia’s official cash rate of 4.35%. Can this be a good investment opportunity for dividend-focused investors? 

Telstra’s valuation has become cheaper

The declining share price has made Telstra cheaper in terms of the price-to-earnings ratio. According to S&P Cap IQ, the Telstra share price is now valued at 19x FY24’s estimated earnings, down from 24x a year ago and near the midpoint of its historical trading range of 10x to 28x. 

Telstra generates a robust operating cash flow of approximately $7 billion annually, supporting its substantial cash dividend payments. As mentioned above, Telstra offers a fully-franked dividend yield at the current price.

How about Telstra’s business outlook?  

The telecommunications industry necessitates continuous investment in capital assets to ensure a high quality of service. Telstra spends nearly $4 billion annually on capital expenditures (capex), leaving approximately $3 billion of free cash flow, which is the cash left after accounting for cash outflows to support operations and capex.

While Telstra’s free cash flow of $3 billion is sufficient to cover its current annual dividend payments of $2.3 billion, future earnings growth is crucial for raising its dividend payments. 

Unfortunately, Telstra faces growing competition from more affordable alternatives, driven by consumer efforts to manage living costs. Additionally, as the largest player in the Australian market, Telstra has limited domestic growth opportunities. 

With that said, Telstra is proactively finding ways to optimise its cost structure, as highlighted in its recent market update in May 2024. 

Foolish Takeaway

The Telstra share price has been disappointing this year. However, the company’s valuation has become more attractive, trading at 19 times, and it offers a dividend yield of 5%. 

With limited revenue growth opportunities, Telstra’s focus on cost optimisation is a promising strategy for enhancing net profits and sustaining future dividend payments.

The execution of Telstra’s cost optimisation and growth strategies will be critical going forward.

The post Are Telstra shares now a brilliant bargain? appeared first on The Motley Fool Australia.

More reading

• ‘Undervalued’: 3 ASX 300 shares to buy following significant share price falls
• Buy Rio Tinto and these ASX dividend stocks for 5%+ yields
• Here is the earnings forecast through to 2026 for Telstra shares
• How I’d try to turn an empty portfolio into $300k by buying cheap ASX shares, starting now
• How UBS expects Telstra shares to gain 27% and deliver dividend growth

Motley Fool contributor Kate Lee 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 Telstra Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

If you’re looking for new additions to your investment portfolio in June, then it could be worth considering QBE Insurance Group Ltd (ASX: QBE) shares.

That’s because analysts at Goldman Sachs believe that big returns could await investors that buy the insurance giant’s shares at current levels.

Why are QBE shares a buy?

Goldman has named a few reasons why it thinks that investors should be buying the company’s shares today.

The first reason is that “QBE has the strongest exposure to the commercial rate cycle.” Given the momentum that is being seen in the commercial premium rate cycle, Goldman expects QBE to benefit greatly.

Another reason that the broker is bullish on the insurer is that “QBE’s achieved rate increases continue to be strong & ahead of loss cost inflation.”

And a third reason is that its “valuation [is] not demanding.” Goldman estimates that its shares are changing hands for just 9.8x estimated FY 2024 earnings of US$1.22 per share (A$1.84 per share).

Big returns expected

Goldman has a buy rating and $20.90 price target on QBE’s shares. This implies potential upside of 16% for investors over the next 12 months.

In addition, the broker is forecasting a 62 US cents per share (93.3 Australian cents per share) dividend in FY 2024. This represents a 5.2% dividend yield based on its current share price and boosts the total potential return beyond 20%. A slightly larger 63 US cents per share dividend is then expected in FY 2025.

Is anyone else bullish?

Goldman isn’t alone with its view that QBE’s shares are good value at current levels.

UBS currently has a buy rating and $21.00 price target on its shares. Whereas the team at Citi has a buy rating and $20.00 price target on its shares and Morgans has an add rating with a $20.00 price target. These all imply double-digit upside from where its shares trade today.

Commenting on its add recommendation, Morgans said:

With strong rate increases still flowing through QBE’s insurance book, and further cost-out benefits to come, we expect QBE’s earnings profile to improve strongly over the next few years. The stock also has a robust balance sheet and remains relatively inexpensive overall trading on 8x FY24F PE.

Overall, the broker community appears to believe that the insurance giant could be a quality option for investors. Especially those looking for a source of income from the share market given its 5%+ dividend yields.

The post 3 reasons to buy QBE shares right now appeared first on The Motley Fool Australia.

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• 2 top ASX income shares that analysts love
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Citigroup is an advertising partner of The Ascent, a Motley Fool company. 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.

Looking to supersize your stage three tax cuts by investing in S&P/ASX 200 Index (ASX: XJO) shares?

With history as our guide, that could prove to be a great road towards building your wealth.

As you’re likely aware, the stage three tax cuts take effect this financial year. Meaning from 1 July 2024, everyone earning more than $18,200 a year should expect to pay less of their hard-earned paycheques back to the ATO.

But what you choose to do with the extra cash in hand could make a tremendous difference to your financial well-being.

Why invest your tax cuts in ASX 200 shares?

The pending stage three tax cuts will see most Aussies significantly better off than they were before.

Especially if they opt to invest that extra cash in ASX 200 shares.

“While this will provide much-needed cost of living for many, others will be intending to splurge the extra cash, or stash it away in savings, which could easily be invested instead,” Brendan Doggett, Sharesies AU country manager, told the Motley Fool.

According to Doggett:

For example, if you earn the average national salary of $90,000 a year, you’ll get $160 back in tax cuts each month from 1 July. This could be turned into $11,396 in five years’ time if invested every month to buy ASX stocks, thanks to compound interest.

That figure assumes there are no changes to future tax rates and is based on the 6.8% average return posted by the ASX 200 over five years.

As you’d expect, for higher income earners the benefits of investing those stage three tax cut returns will be greater.

“For those who earn even higher, say $150,000, this would look more like $310 extra each month, and could result in a healthy $22,079 in stocks by 2029,” Doggett said. “Building this extra cash into your monthly investment routine is a simple way to add to your portfolio without much of a lift.”

And the longer your investment horizon, the better your returns from ASX 200 shares are likely to be.

According to Doggett:

For investors with a long-term gaze, $160 invested every month could turn into $31,493 in 10 years. When added to your super balance and any existing investments you may have, that’s a more-than-healthy contribution to a retirement fund that can be easily set aside monthly and forgotten about.

The figures here are based on the average ASX 200 rate of return of 9.3% over 10 years.

Which is not to say investors can’t reap some benefits with a shorter-term horizon.

“As for younger investors whose sights are more set on milestone ‘firsts’ such as getting on the property ladder or starting a family, fantastic returns can still be made in the short-term,” Doggett said.

“If you invest your extra income every month, you’d have $6,046 in three years’ time. Not bad for what could otherwise be splashed on a monthly grocery shop or trip to the pub!”

This figure is based on the average ASX 200 rate of return of 3.3% over three years.

The benefits of dollar-cost averaging

Now if you’re set to receive a sizeable tax refund from the stage three cuts, you might be tempted to invest it all in ASX 200 stocks in one go.

While that may not be a bad idea, Doggett told us that dollar-cost averaging can help investors form a lifetime wealth-building habit.

“In addition to seeing more in their pockets each month, many Australians are also preparing to receive a large tax refund, which could also be invested,” he said.

Doggett added:

While investing this as one lump sum might give you a higher return, quicker, it won’t turn investing into a habit, which is really what’s needed to make long-term gains.

Even though investing little and often every month (via dollar-cost averaging) might feel slower, this ‘set and forget’ mindset will help you maintain momentum and grow your money in the long-run.

The post How to turn your stage 3 tax cuts into $11,396 buying ASX 200 shares appeared first on The Motley Fool Australia.

More reading

• 3 reasons to buy QBE shares right now
• 2 excellent ASX income stocks to buy this month
• 2 ASX shares to buy that are near 52-week lows
• Here are the top 10 ASX 200 shares today
• Should you buy Guzman y Gomez shares when they list on the ASX?

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.

Are you looking for ASX income stocks to buy this month? If you are, it could be worth looking at the two in this article.

That’s because they have recently been named as buys by Morgans and tipped to offer attractive dividend yields.

Here’s what the broker is saying about them:

Cedar Woods Properties Limited (ASX: CWP)

Morgans thinks that this property company could be an ASX income stock to buy. In fact, the broker rates the company high enough to have it on its best ideas list with an add rating and $5.60 price target on its shares.

It believes company’s shares are undervalued and deserve to trade on higher multiples. It said:

CWP is a volume business and the demand for lots looks to be improving, with margins to invariably follow. CWP’s exposure to lower priced stock in higher growth markets sees further potential to drive earnings. On this basis, we see every reason for CWP to trade at NTA and potentially at a premium, were the housing cycle to gain steam through FY25/26.

As for dividends, Morgans is forecasting dividends per share of 18 cents in FY 2024 and then 20 cents in FY 2025. Based on the current Cedar Woods Properties share price of $4.48, this will mean dividend yields of 4% and 4.5%, respectively.

Dexus Industria REIT (ASX: DXI)

Another ASX income stock that Morgans rates highly is Dexus Industria. It is a real estate investment trust with a focus on industrial warehouses.

The broker currently has an add rating and $3.18 price target on its shares.

Morgans thinks that Dexus Industria is well-placed thanks to strong demand for industrial property and its development pipeline. It explains:

The portfolio is valued at $1.6bn across +90 properties with 89% of the portfolio weighted towards industrial assets (WACR 5.38%). The portfolio’s WALE is around 6 years and occupancy 97.5%. Across the portfolio 50% of leases are linked to CPI with the balance on fixed increases between 3-3.5%. While we expect cap rates to expand further in the near term, DXI’s industrial portfolio remains robust with the outlook positive for rental growth. The development pipeline also provides near and medium-term upside potential and post asset sales there is balance sheet capacity to execute.

In respect to income, the broker is forecasting dividends per share of 16.4 cents in FY 2024 and then 16.6 cents in FY 2025. Based on the current Dexus Industria share price of $2.97, this will mean dividend yields of 5.5% and 5.6%, respectively.

The post 2 excellent ASX income stocks to buy this month appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has 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.

Despite the Australian share market currently trading within sight of its record high, not all ASX shares are faring so well right now.

In fact, there are a large number of ASX shares that are currently at or around their 52-week lows.

And while not all of these are buys and some deserve to be down there, a couple that could be in the buy zone are listed below. Here’s what analysts at Morgans are saying about them:

Karoon Energy Ltd (ASX: KAR)

The Karoon Energy share price dropped to a 52-week of $1.71 today.

The team at Morgans is likely to see this as a buying opportunity. It has the ASX energy share on its best ideas list at present. It commented:

Unique as a reasonable scale pure conventional oil producer, benefitting directly from rising oil prices. Karoon has significant net cash and is fully funded through a doubling of production over the next 12 months. There are also potential catalysts just around the corner with Karoon flagging at its recent result that it plans to shortly update the market with more detail on its growth plans, Bauna’s outlook, and its ESG approach.

Morgans has an add rating and $2.80 price target on its shares. This implies potential upside of over 60% for investors.

Tyro Payments Ltd (ASX: TYR)

The Tyro Payments share price sank to a 52-week low of 77 cents on Tuesday before ultimately ending the day at 77.5 cents.

In recent years Tyro has built a significant presence in the Australian payments industry. In fact, with around 70,000 merchants on its network, it is only behind the big four banks in respect to number of terminals in the market.

And while investors don’t appear enamoured with the ASX share right now, a good number of brokers are positive on Tyro and see it as a buy. One of those is Morgans, which has it on its best ideas list. It said:

TYR sold off heavily in 2023 affected by the broad pull back in technology stocks and overall concerns regarding its earnings trajectory. However, we believe FY24 will show significantly improved business momentum, importantly driven by a much greater focus on lifting overall profitability. TYR still trades at a significant discount to valuation.

Morgans has an add rating and $1.47 price target on its shares. This suggests that the ASX share could double in value over the next 12 months.

The post 2 ASX shares to buy that are near 52-week lows appeared first on The Motley Fool Australia.

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The post Here are the top 10 ASX 200 shares today 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 positions in and has recommended Life360. 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.

ASX investors love a good initial public offering (IPO). And we just might get to see one of the biggest ASX IPOs in years when Mexican fast food chain Guzman y Gomez floats on the Australian stock exchange later this month on 20 June. But should ASX investors buy Guzman y Gomez shares as soon as they can?

IPOs are exciting, there’s no question about it. It’s interesting to see how the public markets value a company when the shares float for the first time. Plus, it’s always worth getting the popcorn out to watch the usual share price rollercoaster upon a stock’s ASX debut.

As we touched on yesterday, Guzman y Gomez is hoping to raise around $242.5 million by floating 11.1 million shares priced at $22 each.

By selling these Guzman y Gomez shares, the company is planning on funding an aggressive expansion across Australia. If Guzman indeed succeeds at this IPO pricing, it will see the company command a market capitalisation of $2.2 billion.

As a comparison point, Kentucky Fried Chicken (KFC) operator Collins Foods Ltd (ASX: CKF) currently has a market cap of $1.07 billion.

Unlike many ASX IPOs, retail ASX investors won’t have the opportunity to buy shares directly before the IPO. Instead, we’ll have to wait until Guzman y Gomez shares are trading on the secondary markets (under the ticker ‘GYG’) before we can pick up shares for ourselves.

However, Guzman reportedly already has “considerable support” from existing institutional investors like Aware Super, Firetrail Investments and Hyperion Asset Management. These early and institutional investors, as well as Guzman’s board and management, are still expected to own around 62% of the company post-IPO.

Should ASX investors buy Guzman y Gomez shares at IPO?

So we know when and how all ASX investors will soon be able to buy Guzman y Gomez shares. But let’s talk about whether they should.

Well, one ASX expert has already been sold on Guzman y Gomez shares and will be upping his stake once the company IPOs. As we mentioned above, Firetrail Investments was an early backer of Guzman. But its chief Patrick Hodgens recently told the Australian Financial Review (AFR) that he can’t wait to double down:

It has a great brand, excellent unit economics, large store rollout plan, strong board, one of the most profitable franchisee opportunities in Australia… And at the same time, no net debt. It’s a great starting point.

Hodgens told the AFR that Firetrail looks at a dozen pre-IPO companies every year, but normally chooses just one to invest in. This year, that one is Guzman y Gomez. Hodgens also stated that he likes Guzman’s co-CEO model, as well as the company’s shift to drive-throughs and strip stores.

However, not everyone is as excited about this IPO.

The AFR’s Chanticleer argues that Guzman at $22 a share is “priced for high growth” as it represents “32.5-times earnings on an enterprise value to pro forma FY25 EBITDA basis”. It goes on to state that “that’s a rich multiple”. Here’s why:

In Australia, we normally see IPOs priced on a multiple of earnings per share or net profit basis, but in GYG’s case it expects only $3.4 million net profit in FY24 and $6 million next year (on a pro forma basis) – that’s about a 370-times FY25 pro forma profit number.

Foolish takeaway

Every ASX IPO usually has both cheerleaders and detractors and the float of Guzman y Gomez shares is no different, it seems. Regardless of the arguments on both sides, we’ll have to wait until the shares hit the ASX to truly find out which story investors are buying.

The post Should you buy Guzman y Gomez shares when they list on the ASX? appeared first on The Motley Fool Australia.

More reading

• This ASX 200 superstar is down 13% in 2 days. Time to pounce?
• ‘Undervalued’: 3 ASX 300 shares to buy following significant share price falls
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• Why is the Woodside share price tumbling on Tuesday?
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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 recommended Collins Foods. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

June has certainly not started well for S&P/ASX 200 Index (ASX: XJO) darling Lovisa Holdings Ltd (ASX: LOV).

At market close last Friday, 31 May, shares in the ASX 200 fashion jewellery retailer closed trading for $33.91 apiece.

That put the Lovisa share price up more than 64% in only 12 months. Atop that supersized share price gain, Lovisa also paid out 81 cents per share in partly franked dividends over the year. This sees the stock currently trading on a trailing yield of 2.8%.

But things took a turn for the worse yesterday, with the Lovisa share price crashing 10.4% to close at $30.40.

And the selling continues today, albeit at a more modest pace.

In afternoon trade on Tuesday, the Lovisa share price is down 3.1% at $29.45, putting the stock down 13.2% since Friday’s closing bell.

I told you June was off to a rough start!

However, longer-term shareholders should still be sitting on some outsized gains.

Despite the fire sale, shares in the ASX 200 retailer remain up 42.7% over 12 months.

Why is the Lovisa share price getting smashed?

ASX 200 investors were overheating their sell buttons yesterday after Lovisa announced that CEO Victor Herrero will be stepping down on 31 May next year.

Herrero will be replaced by John Cheston, currently the CEO of Smiggle.

“John is a highly successful global retailer and will join Lovisa at a very exciting time as we continue our global growth,” Lovisa chairman Brett Blundy said.

Clearly, though, investors have their doubts.

“The outgoing CEO has been instrumental in Lovisa’s global expansion,” Motley Fool analyst James Mickleboro noted.

Mickleboro added:

While a lot of the hard work has certainly been done since his [Herrero’s] arrival in 2021, there’s still a lot more to come. The market may be concerned that his exit now puts at risk the successful execution of this expansion.

Which brings us back to our headline question.

Time to pounce on this ASX 200 superstar?

Following Lovisa’s announcement yesterday, a number of brokers downgraded their outlook for the ASX 200 jewellery retailer.

Among them:

• Barrenjoey cut Lovisa to a neutral rating with a $29.80 price target
• Citi cut Lovisa to a neutral rating with a $31.65 price target
• Morgan Stanley cut Lovisa to an equal-weight rating with a $30.25 price target
• Canaccord cut Lovisa to a hold rating with a $29.00 price target

Now, what you might have noticed is that while the ASX 200 company was broadly downgraded following the past two days of selling, the price targets from three of these brokers are already higher than the current $29.45 a share.

Indeed, Citi is forecasting a potential upside of 7.5% from current levels.

Atop these brokers, Wilsons Advisory analyst Tom Camilleri also expressed concern over Lovisa’s ongoing growth, particularly in China where Herrero has experience with store roll-outs.

In its half-year results for the six months to 31 December, Lovisa reported opening 74 outlets during the half year, taking the total to 854. That included the company’s first store in Guangzhou, China, and Ho Chi Minh City, Vietnam.

As for the outlook for the ASX 200 retail stock going forward, Camilleri added:

On a more fundamental level, Lovisa still has one of the most profitable and scalable physical retail formats globally, which should continue to be rewarded with a premium multiple.

And keeping in mind that Lovisa’s last interim dividend of 50 cents per share marked an all-time high payout, I’d say the two-day 13% sell-down could present a great opportunity to get in at an attractive long-term price.

The post This ASX 200 superstar is down 13% in 2 days. Time to pounce? appeared first on The Motley Fool Australia.

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Citigroup is an advertising partner of The Ascent, a Motley Fool company. 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 positions in and has recommended Lovisa. The Motley Fool Australia has recommended Lovisa. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Some experts have revealed where they see value within the S&P/ASX 300 Index (ASX: XKO) share landscape.

Share prices are always changing, so when valuations adjust, it can open up opportunities if something moves from being fair value to good value.

In a piece on The Bull, analysts have rated some stocks as a buy, so I’ll discuss three below.

Worley Ltd (ASX: WOR)

Worley described itself as a global professional services company of energy, chemicals and resources experts. The company partners with customers to deliver projects and “create value over the life of their assets”. It says it’s “moving towards more sustainable energy sources, while helping to provide the energy, chemicals and resources now.”

It was rated as a buy by Peter Day from Sequoia Wealth Management, who said the company’s factored sales pipeline was up 14% in the financial year to 31 March 2024. Sustainable-related work represented 82% of the factored sales pipeline.

The ASX 300 share’s plans include growing profit margins through automation and generative artificial intelligence and targeting market share gains with its technology solutions pipeline.

Telstra Group Ltd (ASX: TLS)

The ASX telco share is the leading provider of mobile services in Telstra. It also has a growing presence in cable infrastructure, enterprise, NBN services for households and telco services for Pacific Island nations.

Jabin Hallihan from Auburn Capital has called Telstra shares a buy following the decline since early February. Hallihan noted that Telstra recently reaffirmed its 2024 earnings guidance and revealed it’s expecting underlying earnings before interest, tax, depreciation and amortisation (EBITDA) to be between $8.4 billion and $8.7 billion in FY25.

Management’s plans have “shifted to re-setting and reducing costs” in markets where growth has slowed. The expert also noted that the number of postpaid mobile subscribers is approaching 9 million.

Hallihan says fair value is around $4.50 per share, according to Auburn Capital. That’s around 30% higher than today’s value.

Australian Clinical Labs Ltd (ASX: ACL)

This ASX 300 share is a provider of Australian pathology services to clients including doctors, specialists, patients, hospitals, and corporate clients. The company has over 70 laboratories. It’s one of the country’s largest private hospital pathology businesses, and the SunDoctors brand specialises in detecting skin cancer and providing treatment.

Jabin Hallihan from Auburn Capital also rated this company as a buy. He noted Australian Clinical Labs recently affirmed that underlying earnings before interest and tax is expected to be “at the lower range of between $60 million and $65 million” in FY24.

In the opinion of Hallihan and the Auburn team, the company is “undervalued” after the significant fall of the Australian Clinical Labs share price – it’s down 32% in the past 12 months, as shown on the chart below.

The post ‘Undervalued’: 3 ASX 300 shares to buy following significant share price falls appeared first on The Motley Fool Australia.

More reading

• Buy Rio Tinto and these ASX dividend stocks for 5%+ yields
• These are the 10 most shorted ASX shares
• Here is the earnings forecast through to 2026 for Telstra shares
• How I’d try to turn an empty portfolio into $300k by buying cheap ASX shares, starting now
• How UBS expects Telstra shares to gain 27% and deliver dividend growth

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 positions in and has recommended Telstra Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

It’s been a bit of a rough Tuesday for the All Ordinaries Index (ASX: XAO) and most ASX All Ords shares so far today. At the time of writing, the All Ords Index has dropped by 0.25% and is hovering just above 8,000 points. But let’s talk about one stock that’s going the other way and just hit a new 52-week high.

That ASX All Ords stock is none other than coal share Whitehaven Coal Ltd (ASX: WHC).

Whitehaven stock closed at $8.25 a share yesterday and opened at that same price this morning. But since then, it has only been up for this ASX All Ords stock. At present, Whitehaven shares are trading at $8.40 each, up a healthy 1.76% for the day thus far.

It was even better for Whitehaven shares earlier this morning. Just after market open, this All Ords stock climbed all the way up to $8.45 a share – a new 52-week high for Whitehaven.

Today’s gain continues a long streak of wins for Whitehaven shares. As it now stands, this ASX All Ords stock is now up 8.2% year to date in 2024 so far, as well as up a whopping 40.9% over the past 12 months.

Check that out for yourself below:

Why is this ASX All Ords stock at a new 52-week high today?

Today’s new highs for Whiehaven are not easily explained. There haven’t been any fresh developments, news or announcements out of Whitehaven itself for quite a while.

However, that doesn’t mean a lot of things haven’t been going right for the company.

Back in April, Whitehaven completed the acquisition of two metallurgical coal mines for US$3.2 billion, instantly transforming the company into a significant metallurgical coal producer.

As my Fool colleague Bronwyn covered at the time, this resulted in a number of ASX experts casting a positive light on the ASX All Ords stock. ASX broker UBS gave Whitehaven a buy rating, as well as a 12-month share price target of $8.70, as a result.

Michael Gable of Fairmont Equities piled on, stating that Whitehaven stock “looks cheap” following the mine acquisitions.

There was some good news for Whitehaven shares last month too. On 16 May, the All Ords stock revealed that the Federal court had dismissed an attempted challenge of its Narrabri Stage 3 Extension Project. This project is expected to extend the Narrabri coal mine’s life from 2031 to 2044.

So it appears that these positive developments for Whitehaven are resulting in investors taking a second look at the stock and liking what they see. Let’s see if Whitehaven can hit any more highs going forward.

At the current Whitehaven share price, this ASX All Ords coal stock has a market capitalisation of $7.03 billion, with a dividend yield of 5.84%.

The post Up 40% in a year, why this ASX All Ords stock just hit a new 52-week high 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.