Tag: Fool

The Netwealth Group Ltd (ASX: NWL) share price has jumped over 50% in the past year, as shown on the chart below. The company has demonstrated its ability to deliver capital growth and dividend income.

The company provides a platform that enables financial intermediaries and clients to invest and manage a wide array of domestic and international products.

Netwealth’s offering includes non-custodial administration and reporting services, self-managed superannuation fund (SMSF) administration, managed funds, managed accounts, investor-directed portfolio services, and superannuation products.

The company has achieved earnings growth since it was listed in late 2017, which has enabled excellent dividend growth.

Growing dividends

Netwealth has grown its annual dividend every year since it first started paying one in 2018, which is a commendable record.

The 2023 financial year saw the annual payout increase by 20% to 24 cents per share. The FY23 annual dividend was around double the size of the FY19 payout of 12.1 cents per share.

Netwealth’s excellent dividend growth has continued in FY24, with the interim dividend hiked by 27% year over year.

The last two declared dividends come to 27 cents per share, translating to a fully franked dividend yield of 1.3% and a grossed-up dividend yield of 1.9%.

At a time when the Reserve Bank of Australia (RBA) cash rate is above 4%, the Netwealth dividend yield is not particularly appealing, so I wouldn’t call Netwealth shares a buy purely for the passive income.

But we should consider other elements of the investment thesis, not just its dividend potential.

Strong operational performance and margins

Netwealth is delivering strongly on growing its core metrics.

The update for the three months to 31 March 2024 showed funds under administration (FUA) had reached $84.7 billion, an increase of $6.7 billion over the quarter. The FUA growth over 12 months was 28.5%.

It reported FUA inflows of $5.2 billion for the three months to March 2024, which was 40.7% higher than the prior corresponding period. The FUA net inflows for the quarter were $2.7 billion, up 62.2% year over year.

Netwealth also reported its funds under management (FUM) reached $19.7 billion at 31 March 2024, an increase of $1.6 billion for the quarter. FUM net inflows for the quarter were $0.6 billion.

This level of FUA and FUM growth can help drive the company’s earnings higher because it contributes to revenue growth. As a digital platform business, Netwealth can benefit from operating leverage, leading to profit rising faster than revenue.

Netwealth says it’s highly profitable, with a strong earnings before interest, tax, depreciation and amortisation (EBITDA) margin of 47.6% in the HY24 result. It also has “strong cash generation” and a very high level of recurring revenue, resulting in predictable revenue.

The broker UBS currently rates Netwealth as a buy because of the “strong” quarterly FUA and inflow numbers. The broker has a price target of $22.50 on Netwealth shares, implying a possible rise of more than 10% over the next 12 months.

The post Are Netwealth shares a compelling buy for dividends? appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• If you’d invested $10,000 in Netwealth shares at the start of the year, here’s how much you’d have now

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

Australia’s inflation rate has experienced notable fluctuations over the last couple of years. It has been significantly influenced by global disruptions such as the COVID-19 pandemic and geopolitical tensions. These factors, coupled with supply chain constraints and rising commodity prices, have escalated costs across various sectors. This poses a challenge for investors looking to maintain the real value of their portfolio returns.

Impact of inflation on real returns

Inflation erodes the purchasing power of money, directly impacting the real returns of investments. For investors in the stock market, this means that nominal gains can be offset by the rising cost of living, leading to diminished actual wealth accumulation. This underscores the importance of strategic investment choices that can outpace inflation and preserve capital.

Defensive share investment strategies

In response to inflationary pressures, one strategy is to focus on defensive stocks in sectors less sensitive to economic cycles. Think consumer staples and utilities. These sectors are considered defensive because they provide essential goods or services that remain in demand, regardless of economic conditions.

Companies like Coles Group Ltd (ASX: COL) and Woolworths Group Ltd (ASX: WOW) play a critical role in everyday life by providing necessary goods. Despite economic downturns, demand for products from these companies tends to remain stable, making them resilient investment choices during inflationary times. 

Coles reported robust results for 3QFY24. Supermarket sales revenue was up 5.1% to $9,065 million. Woolworths has also demonstrated strong financial performance recently, with group sales up 2.8% over the same period to $16,800 million. Despite these results, both companies’ share prices fell on the day of the quarterly updates.

Both supermarkets have seen their earnings increase year on year since 2020, but their share prices have been heading in the opposite direction. The Coles share price is down 10% over the past year while the Woolworths share price is down 17%. Both companies, however, have the potential to bounce back speedily following corrections in the share price which could serve savvy investors well.

Utilities are another pillar of defensive investing. Companies like AGL Energy Limited (ASX: AGL) supply essential services like electricity and gas. Utilities are indispensable, which can provide a buffer against economic swings. AGL recently raised its earnings guidance for FY24, with net profit after tax (NPAT) expected to be between $760 million and $810 million, up from $680 million and $780 million. 

The AGL share price is down 14% from its peak in July 2023 but has been trending upwards since February 2024, when it announced a quadrupling of interim profit.

Foolish takeaway

Investing in defensive stocks, such as those in the consumer staples and utilities sectors, can present a prudent approach to safeguarding your portfolio against inflation. These sectors offer the dual benefits of stability and consistent demand, which are crucial during times of economic uncertainty and rising prices.

By strategically incorporating such stocks, investors can protect their portfolios and possibly achieve real growth in value. This makes defensive share strategies essential to a well-rounded investment approach during inflationary periods.

The post Safeguarding against inflation: A defensive share strategy appeared first on The Motley Fool Australia.

More reading

• ASX investors may choose supermarkets over Wesfarmers shares after ACCC inquiry: broker
• Leading brokers name 3 ASX shares to buy today
• Analysts say these 4 ASX dividend shares are buys
• Why the Woolworths share price now offers a ‘very rare opportunity’
• Should you buy Coles shares for that hefty 6% dividend yield?

Motley Fool contributor Katherine O’Brien 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. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

ASX copper shares have risen strongly over the last few months. For example, since the start of 2024, the Sandfire Resources Ltd (ASX: SFR) share price has surged almost 30%, as can be seen below. Meanwhile, fellow ASX copper miner Aeris Resources Ltd (ASX: AIS) has seen its share price almost double in 2024 to date.

Various resources are required to decarbonise the world, including copper, lithium, nickel, cobalt, and rare earths. But arguably copper may be one of the most vital commodities on the path to a greener future because of its importance to electrification. Copper is essential for wind and solar renewable energy generation, energy storage, electricity transmission, and electric vehicles.

In fact, Rio Tinto Ltd (ASX: RIO) recently highlighted that just one 1MW wind turbine uses 3 tonnes of copper, while an electric vehicle uses four times more copper than a traditional vehicle.

Also according to Rio Tinto, global demand for copper is set to grow between 1.5% to 2.5% per year. This comes at a time when good copper deposits are becoming harder to find.

Those are the long-term dynamics, but with the copper price recently soaring to record highs of more than US$11,000 per tonne, is now the right time to invest?

Macquarie names two ASX copper shares

According to the Australian Financial Review (AFR), Macquarie is still pretty bullish on copper, despite prices recently soaring.

Macquarie’s analysts increased their copper price forecast for the 2024 calendar year by 7% to US$9,671 per tonne and for the 2025 calendar year by 9% to US$9,575 per tonne. While those numbers are lower than this week’s record highs, according to Statista, they would still represent stronger prices than have been seen over most of the past decade.

So why is the investment banking giant still optimistic on copper? Per AFR, Macquarie believes that slower Chinese demand for copper due to a weak property sector will be partially offset by a boost in demand outside of China.

However, Macquarie expects a copper surplus in 2026, leading to a price forecast of US$8,500 per tonne for that year.

Of the diversified miners, AFR reported Macquarie’s preferred pick as South32 Ltd (ASX: S32) while from a copper pure-play perspective, the broker favours Sandfire.

More positivity on Sandfire shares

Macquarie isn’t the only top broker that likes Sandfire for the longer term

AFR also reported broker Wilsons likes the ASX copper share after visiting its Botswana operations, but remains cautious about the recent strength of the copper price. Wilsons forecasts that in FY25, Sandfire can generate revenue of US$1.14 billion and earnings before interest, tax, depreciation and amortisation (EBITDA) of US$332.5 million.

Wilsons said:

We stress that we are positively predisposed toward Sandfire (and to structurally strong copper markets over the medium/longer term), but at this stage downgrade our rating to market weight, given our view that copper prices might give up some recent gains in the near term.

Wilsons has a price target of $9.90 on Sandfire shares, suggesting possible upside of 4.1% over the current share price in the next year.

The post Will ASX copper shares keep surging from here? (Plus: 2 top picks for exposure) appeared first on The Motley Fool Australia.

More reading

• 1 Australian mining stock worth a long-term investment
• Buy Rio Tinto and these excellent ASX dividend shares
• Here are the top 10 ASX 200 shares today
• Brokers name 3 ASX shares to buy now
• Rio Tinto share price sinks amid gas woes

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

When directors, officers, or executives purchase shares in their own companies, it can send a powerful message about the business’s underlying health and future prospects. Insider buying can serve as a grassroots indicator of potential, sometimes preceding positive developments that lead to stock price appreciation. For investors, these moves offer a hint to look beyond the noise of the market and consider where insiders are putting their own money.

Recently, insiders at four S&P/ASX 200 Index (ASX: XJO) companies — ALS Ltd (ASX: ALQ), Super Retail Group Ltd (ASX: SUL), Sonic Healthcare Ltd (ASX: SHL), and Gold Road Resources Ltd (ASX: GOR) — have made notable purchases, suggesting value that others may have overlooked.

ALS

ALS is a global testing, inspection, and certification company. It delivered its FY24 results last week, recording a 6.8% increase in revenue and a final dividend of 19.6 cents. The company has undertaken eight acquisitions over the past 12 months which are expected to add $152 million to revenue on a full year basis. It is targeting mid single digit organic revenue growth in FY25. 

Super Retail Group 

Super Retail Group is a leading retailer specialising in auto, outdoor, and sports products in Australia. The company operates through several well-known retail brands including Supercheap Auto, BCF, and Rebel. Despite current inflation and interest rate challenges, the retailer managed to record total sales growth of 2% for the first 43 weeks of FY24. It expects to open 27 stores total in FY 24 and close 4 stores. 

Sonic Healthcare

Sonic Healthcare is a global company providing laboratory medicine/pathology and radiology services across multiple countries. In its most recent earnings update Sonic Healthcare reported strong organic revenue growth with earnings before interest tax depreciation and amortisation (EBITDA) forecast to be approximately $1.6 billion in FY24. Inflationary pressures are weighing on profit growth; however, the company is set to reap the benefits of FY24’s investments in the form of synergies and enhanced returns from FY25 onward. 

Gold Road Resources 

Gold Road Resources is an Australian gold production and exploration company primarily focused on the Gruyere Gold Mine, one of Australia’s largest and lowest-cost gold mining operations. The company produced 64,323 ounces of gold in the March quarter with production sold at a strong spot gold price of $3,137 an ounce. Analysts have recently revised forecast gold prices upwards driven by expectations of Federal Reserve rate cuts and a weakening US dollar. 

Foolish takeaway 

Insider buying can not only strengthen investor confidence but also provide a compelling narrative about latent value in ASX-listed companies. When company leaders invest their own money into their operations, it can be a strong endorsement of the business’ current health and future prospects. Whether it’s ALS’s strategic acquisitions poised to boost revenue, Super Retail Group’s expansion despite economic headwinds, Sonic Healthcare’s robust growth trajectory, or Gold Road Resources capitalising on favourable gold prices, these insider purchases signal a bullish outlook for these ASX 200 shares.

The post 4 ASX 200 shares being scooped up by insiders appeared first on The Motley Fool Australia.

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• Beat the bank! 2 ASX stocks worth buying to make more money than interest on savings
• Analysts say these 4 ASX dividend shares are buys
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Katherine O’Brien 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 Super Retail Group. The Motley Fool Australia has positions in and has recommended Super Retail Group. The Motley Fool Australia has recommended Sonic Healthcare. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

ASX 200 uranium stock Boss Energy Ltd (ASX: BOE) is the biggest faller of the ASX 200 so far today.

The Boss Energy share price tumbled 9.73% shortly after the market open amid news of a major collective insiders’ sell-off. After hitting and of $4.82 per share, the uranium miner has partially recovered to $4.87.

Just after 5pm yesterday, the company announced that Boss Energy CEO and managing director Duncan Craib, chair Wyatt Buck, and director Bryn Jones had sold a significant portion of their personal holdings.

The statement included details of each sale and commentary from Buck as to why the sell-off occurred.

Let’s look at the details.

Major insiders sell-off of ASX 200 uranium stock

Firstly, let’s look at the details of the sales.

Boss Energy CEO and managing director Duncan Craib sold 3.75 million shares at an average price of $5.63 per share between Tuesday and Friday last week. The on-market sale totalled just over $21 million.

Additionally, Craib exercised an option yesterday to acquire 250,938 Boss Energy shares at a zero exercise price. The 250,983 short-term unquoted options had an expiry date of 30 June 2025.

His holdings now total 741,673 shares in the ASX 200 uranium stock, plus almost 300,000 long-term unquoted options and more than 390,000 long-term performance rights.

Chair Wyatt Buck sold 291,777 Boss Energy shares last Tuesday, also at $5.63 per share. The on-market sale totalled just over $1.64 million.

The sell-down represented 63% of Buck’s holdings. He retains 170,000 shares in the ASX 200 uranium stock.

Director Bryn Jones also sold 600,000 Boss Energy shares last Tuesday at $5.63 per share. The on-market sale totalled just under $3.38 million.

Like Buck’s sale, this also represented 63% of his total holdings. Jones retains just under 345,000 shares in the ASX 200 uranium stock.

What did management say?

In the statement, Buck explained that several years ago, the board of directors made personal commitments not to sell any shares until Boss Energy’s 100%-owned Honeymoon mine began production.

The company acquired the Honeymoon mine in December 2015. The first drum of uranium was produced last month, making Boss Energy Australia’s first new uranium producer in a decade.

Buck specifically addressed the largest sale among the three directors — that of CEO Duncan Craib.

He said:

Mr Craib joined Boss in January 2017 and was tasked, personally invested, and incentivised with taking the Honeymoon mine toward production.

Having achieved that milestone event Mr Craib has sold 3.75 million securities and retains 1.43 million securities after the change.

Mr Craib remains a significant long-term shareholder of the Company and has no intention to sell any further shares in the medium term.

Buck added that Craib remains committed to driving Boss Energy’s growth.

He said the board was acting to ensure Craib and the executive team were incentivised and aligned for the company’s next stage of expansion.

As at 31 March, Boss Energy has no debt and $298 million of liquid assets (cash, equity investments and physical uranium).

What’s happening with the Boss Energy share price?

The ASX 200 uranium stock has soared in recent years as the world warms up to the idea of nuclear energy being part of the green energy transition.

The Boss Energy share price is up 75% over the past 12 months and 9,560% over the past five years. (You read that right!)

As we recently reported, the ASX 200 uranium stock has also been one of the top 5 risers since the COVID crash.

The new demand for uranium emerged amid constrained supply, leading to extraordinary growth in the uranium price.

The uranium price is currently at a 16-year high of US$91.65 per pound, up 68% over the past 12 months.

The uranium price cracked the US$100 per pound watermark in January before retracing to where it is today.

Established uranium mining companies around the globe have rushed to restart mines that have been on care and maintenance for years to feed this growing worldwide demand.

According to Trading Economics, the United States and 20 other countries have announced plans to triple their nuclear power by 2050.

Of the 58 global nuclear reactors under construction, China is building 22 of them.

The post ASX 200 uranium stock dives 10% amid $26 million insiders sell-off appeared first on The Motley Fool Australia.

More reading

• ASX 200 shares vs. property: Which has performed better since the COVID crash?
• Why BHP, Boss Energy, Domino’s, and Renascor shares are racing higher
• ASX 200 uranium stock Boss Energy surges on copper news
• Why Boss Energy, Meteoric Resources, Pantoro, and Worley shares are falling today
• Will ASX uranium shares run higher on this ‘historic’ supply ban?

Motley Fool contributor Bronwyn Allen 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.

Rarely will an ASX growth stock look ‘cheap’ if it is close to printing money for its shareholders. No one wants to sell an ordinary goose as it evolves into a golden one. As such, it’s often extremely difficult to locate a company with multibagger potential before it skyrockets.

Patience and perseverance can go a long way in this lifelong endeavour. If you turn over enough stones, you’ll eventually find those rare companies — the misunderstood, underappreciated, or simply ignored businesses primed for success.

This month, I’ve uncovered a little ASX growth stock that is now high on my buy list.

Profits could send this soaring

Companies that are not yet profitable can be difficult to value. As onlookers haphazardly speculate on the future, this can lead to wildly exuberant or sunken share prices. Fortunately, this wayward estimation can also give rise to undervalued opportunities.

Sometimes, the mood among a company’s shareholders falls into a rut. Good news becomes bad news, and bad news becomes terrible news. The despair stage can narrow investors’ vision, clouding genuine positive signs.

Enter Eroad Ltd (ASX: ERD): A fleet management technology company attempting to traverse the gap between cash burner and cash earner. If successful, sentiment can quickly shift. A recent example is Xero Ltd (ASX: XRO), with shares now up 19% year-to-date after achieving profitability in FY24.

High revenue growth and profitability are powerful combinations. The New Zealand-based vehicle telematics company Eroad is already reaping revenue growth. In the last three years, its revenue has increased 98.7% to NZ$182 million — a compounding annual growth rate (CAGR) of 25.7% per annum.

On 23 May 2024, this ASX growth stock announced it had achieved a positive free cash flow of $1.3 million in FY24.

Furthermore, according to analyst forecasts, FY26 net profit after tax (NPAT) could be around NZ$10.6 million. Those estimates then expand to NZ$24.4 million in FY27.

If Eroad were to trade on a 30 times price-to-earnings (P/E) ratio, the company’s market capitalisation could be A$676.6 million. Right now, Eroad is valued at $162.3 million — leading me to believe this ASX growth stock could be a four-bagger in three years.

Why is this ASX growth stock being ignored?

I’m guessing you’re already asking: “Mitchell, why hasn’t the share price rallied if the future is so bright?”

It’s a good question. Eroad is not without its risks.

My biggest worry is the company’s rate of share dilution. Since 2020, the number of shares outstanding has more than doubled (shown below), effectively more than halving the value of each slice of ownership a shareholder owns.

I’ll be keeping a close eye on it, although I’m optimistic, given Eroad is now free cash flow positive.

The post ASX growth stock on the cusp of profitability: My multibagger pick appeared first on The Motley Fool Australia.

More reading

• ASX 200 uranium stock dives 10% amid $26 million insiders sell-off
• The greats you should base your investing on
• 3 top ASX 300 dividend shares to buy now for $3,000 a month in passive income
• 3 things about Qantas stock every smart investor knows
• Which ASX biotech shares are pioneering the future of medicine?

Motley Fool contributor Mitchell Lawler 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 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.

“Dad, you wave at people a lot when you’re driving. I think it’s because you’re old.”

Now, as much as I’d like to believe my son was wrong about that first statement, I’m not sure he is.

A driver coming the other way had pulled further to his left to give me room to go around some workers on the side of the road. So yes, I waved in acknowledgement and thanks.

It did give me the opportunity to talk to my son about being kind, and thankful. And that I try to be considerate in return. I told him that my hope is also that by being considerate, and appreciating others when they are, too, it might lead, in a very small way, to a slightly nicer community.

And it reminded me of driving in the country. We try to get away for a few weeks every winter in the school holidays – recently that’s been a series of driving holidays in the bush. If you’ve done the same, you’ll know that there’s a very strong correlation between the distance from a capital city, and the likelihood that you’ll get a wave from an oncoming driver.

Obviously impractical around town – you’d get RSI just going to and from work – but in the bush there’s something really nice about acknowledging each other in that very small way.

Surprise, surprise: after I dropped the young bloke off at school, my thoughts turned to investing.

It reminded me of what might be my favourite quote of all time (it’s a crowded field, and I reserve the right to change my mind!), from Sir Isaac Newton:

“If I have seen further than others, it is by standing upon the shoulders of giants.”

This statement of absolute humility, from one of the greatest minds humanity has known, has always struck me.

None of us can do it – anything – all alone.

We are the product of our lives up to this point:

Parents, siblings, extended family, friends, neighbours, teachers, colleagues, managers, coaches, teammates, books, television shows, opportunities, obstacles, successes, failures…

There is no self-made man or woman. There is no overnight success. None of us achieves anything from first principles.

Which, frankly, we should find wonderfully freeing. It should free us from our own egos. And lower the heights of the mountains we aim to climb.

The humility to stand on the shoulders of giants – to learn from others, and use their example and expertise – also gives us an enormous advantage.

Investors don’t have to divine for ourselves the mathematical concepts behind the ‘discounted cash flow‘ model. We don’t have to invent the term ‘competitive advantage’. We don’t need to discover the beauty of a capital-light business model. Or the benefits of economies of scale. And much more, besides.

Indeed, we have never had more information – and access to that information – including the ideas, successes and failures of those who came before.

It would be hubris in the extreme to think that we can find or invent some heretofore unknown investing principle or paradigm. And even if we could, the time and effort it would take would almost certainly be better used understanding what is already known, and putting it to work for ourselves.

And yet, it is that very hubris (and/or ego) that leads many to ignore what is already known. It is behind the ‘not invented here’ syndrome that inflicts much of society. And, frankly, we see it all too often in the ‘Warren Buffett’s lost it’ headlines, and the idea that ‘old fashioned’ investing principles don’t apply for one reason or another.

(Indeed… the increase in such sentiment is an interesting sign that investors may be getting carried away. No, don’t use it to try to time the market, but do be careful if you feel yourself getting caught up in something!)

Me? I don’t think I’ve ever had an original idea about an investing principle. About how they might apply, sure. But there is no ‘Phillips Constant’ or ‘Phillips Trading Strategy’. I think I’ve done okay applying existing principles, but not inventing my own.

I’ve written this before, but I am almost never the smartest person in the room (sometimes, not even when I’m alone!). If I have a skill, or perhaps more accurately an ‘approach’ that works, it’s in doing my best to synthesise the ideas of others and apply them to new circumstances.

I’ve taken the maths of Ben Graham, the sensibility of Warren Buffett, the multidisciplinary brilliance of Charlie Munger, the explanations of Peter Lynch, the business savvy of Jim Collins and the behavioural insights of Danny Kahneman and Amos Tversky. I’ve read countless others who have unpacked and explained all of the above, and more. And I’ve internalised Aesop’s ‘Tortoise and the Hare’, both as a general principle and as encapsulated in my single favourite investment picture: The Vanguard 30-Year Index Chart.

There are a lot of giants in the paragraph above. Neither you nor I could hope to become any one of them via our own efforts in a single lifetime – and certainly not all of them.

And to return to my original point, each of those people has paid their expertise forward – in their writing, speaking, and in their example and results. The beauty of knowledge is that it is, like investing, a compounding phenomenon: the more you know, the more you can know.

I do this job in large part because I was fortunate enough to learn from my now-colleagues in the US, when I was starting out as an investor. And because I can repay that by paying it forward to others.

More giants. More shoulders.

So, this is my acknowledgement of them. And my hope is that by sharing it, others will be able to access the lessons I’ve learned.

I had a lovely message from a reader the other day, thanking me for what I do in this space and on our podcast, Motley Fool Money. He wanted to send me a small gift as a thank you.

Which is flattering, obviously. And very much appreciated. But I asked him, instead, to just pay it forward – to share what he’s learned and benefitted from, with others.

No, I don’t think I’m going to unleash a new wave of waving drivers. Or a wave of investors who’ve had their own Damascene conversions. But if I can make a bit of a difference, for a few people, I’ll consider my work done.

And the ‘old’ bit of my son’s comment? I’m just going to have to cop that one on the chin!
Fool on!

The post The greats you should base your investing on appeared first on The Motley Fool Australia.

More reading

• 3 top ASX 300 dividend shares to buy now for $3,000 a month in passive income
• 3 things about Qantas stock every smart investor knows
• Which ASX biotech shares are pioneering the future of medicine?
• The little-known ASX tech stock that could rise 25% in a year
• Buy this cheap small cap ASX share for a very big return

Motley Fool contributor Scott Phillips 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.

A $3,000 monthly passive income, or $36,000 a year, would be life-changing for most investors.

Certainly, I can think of numerous ways I could use that extra cash in retirement. Some of these would be useful, and others would be just a tad extravagant.

I’m sure you have your own ideas of what you might do with a spare $3,000 a month in passive income.

With that in mind, we’ll look at three top S&P/ASX 300 Index (ASX: XKO) dividend shares you may want to consider buying today to secure that kind of payout.

Before we dive into those, though, please keep in mind that the yields you generally see quoted are trailing yields. Future yields may be higher or lower, depending on a range of company-specific and macroeconomic factors.

Also bear in mind that a well-diversified passive income portfolio should contain more than just three dividend stocks. Investing in a wider basket of companies that operate in different sectors and locations will help to lower the overall risk of your ASX dividend portfolio.

With that said…

Three ASX 300 dividend shares for passive income

The first ASX 300 share I’d buy now to secure my $3,000 in monthly passive income is bank stock Australia and New Zealand Banking Group Ltd (ASX: ANZ).

ANZ paid a partly franked final dividend of 94 cents per share on 22 December. The big four bank will pay the interim dividend of 83 cents per share on 1 July. (ANZ traded ex-dividend on 13 May, so it’s a bit too late to grab that one!)

All told, that equates to a full-year payout of $1.77 a share.

At yesterday’s closing price of $28.43, ANZ shares trade on a partly franked trailing yield of 6.23%.

The second ASX 300 share I’d buy now for passive income is mining stock Fortescue Metals Group Ltd (ASX: FMG).

The iron ore miner paid a fully franked final dividend of $1.00 a share on 28 September. The interim dividend of $1.08 a share was paid on 27 March.

That works out to a 12-month payout of $2.08 a share.

At yesterday’s closing price of $26.51, that equates to a fully franked trailing yield of 7.85%.

Which brings us to the third share I’d buy now for my $3,000 monthly passive income stream, Telstra Group Ltd (ASX: TLS).

Australia’s biggest telco paid a fully franked final dividend of 8.5 cents a share on 30 August. Telstra delivered the interim dividend of 9 cents per share on 28 March. That brings the 12-month payout of 17.5 cents a share.

At yesterday’s closing price of $3.53 a share, Telstra shares trade on a fully franked trailing yield of 4.96%.

To the maths!

Assuming I buy an equal number of shares in each ASX 300 dividend stock, I can expect to earn a yield of 6.3%, largely franked.

To earn my $3,000 monthly passive income, or $36,000 a year, I’d need to invest $568,421 today.

Now that’s a sizeable amount to invest in one go.

But that’s OK.

Investing is a long game.

I can also make regular smaller investments. And by tapping into the magic of compounding, I’ll reach my passive income goal in good time.

The post 3 top ASX 300 dividend shares to buy now for $3,000 a month in passive income 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 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.

Qantas Airways Limited (ASX: QAN) stock has risen around 20% since the end of February 2024, as shown on the chart below. The ASX travel share has had a rough 12 months, but the future looks more positive.

The company has made some moves in the last few months to win back the trust of passengers after its ticket-selling misdemeanours. For example, Qantas recently expanded its frequent flyer program by adding 20 million more reward seats.

There are (at least) three things that investors should know about Qantas stock, which could make it a compelling investment.

Qantas loyalty division is highly profitable

Many people may think that flights are the only important part of the business. The Qantas loyalty division is becoming increasingly profitable and a bigger contributor to the company’s overall earnings.

In the first half of FY24, Qantas made a total underlying profit before tax of $1.25 billion, down 13%.

It made HY24 underlying earnings before interest and tax (EBIT) in the Qantas domestic division of $641 million, $322 million of underlying EBIT in Qantas international (including freight), $325 million of underlying EBIT in Jetstar Group and $270 million of underlying EBIT in the Qantas Loyalty division. The HY24 Qantas Loyalty underlying EBIT rose by 23% year over year.

Qantas aims to reach $800 million to $1 billion of underlying EBIT by FY30. This segment could contribute to the ASX travel share’s overall profitability at a greater level in the coming years.

Share buyback

A share buyback is one of the most useful things a company can do to increase the value of shares for shareholders.

The ASX travel share announced in the HY24 result that it was increasing its on-market share buyback by up to $400 million.

Buying back shares means the company’s value is being shared between a smaller number of shares, increasing the underlying value in per-share terms. This helps shareholder-related metrics such as the return on equity (ROE) and earnings per share (EPS). In theory, it should help push the Qantas stock price higher as the share buyback continues.

Very cheap valuation

Airlines usually don’t trade on a high price/earnings (P/E) ratio, but the profit they make is just as valuable as the profit dollars made by an ASX tech share, ASX retail share or ASX bank share.

In the FY24 first-half result, the business made statutory net profit after tax (NPAT) of $869 million, or statutory EPS of 52 cents.

The broker UBS has estimated Qantas could generate EPS of 91 cents in FY24, 99 cents in FY27 and $1.11 in FY28. According to those projections, the Qantas stock price is valued at 6.7x FY24’s estimated earnings, 6.2x FY27’s estimated earnings and 5.5x FY28’s estimated earnings.

In three years from now, Qantas’ profit could be substantially higher, so it looks to me to be at a very appealing level now.

The post 3 things about Qantas stock every smart investor knows appeared first on The Motley Fool Australia.

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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.

ASX biotech shares have been showing significant signs of momentum lately. Exciting clinical trial results and strong investor interest are propelling the sector forward. Plenty of upcoming catalysts and company-specific developments could mean the rest of 2024 is also busy for ASX biotech stocks. 

The biotechnology industry combines biology with technology to develop products for various applications. Biotech stocks are shares in companies developing biotech products, which could have medical, agricultural, or industrial applications. 

Many biotech firms focus on genetics and molecular biology to innovate. Extensive research and development (R&D) is undertaken to create new therapies and technologies. This means substantial R&D spending generally precedes revenue generation. Success in biotech can lead to significant rewards, however, with share values potentially soaring following technological breakthroughs or drug approvals. 

Risks and rewards 

The biotech sector is known for its volatility, driven by the high stakes of clinical trials. The performance of biotech shares tends to be driven by company-specific developments, such as trial data, rather than broader economic factors. This means the sector is generally non-cyclical and can provide potential diversification benefits. 

The ASX is home to a number of groundbreaking biotech companies pioneering innovative therapies. For example, Telix Pharmaceuticals Ltd (ASX: TLX) develops radiopharmaceutical diagnostic agents and therapeutic products that are reshaping oncological care. Fellow ASX 300 biotech Clinuvel Pharmaceuticals Limited (ASX: CUV) develops treatments for serious skin disorders. Both Clinuvel and Telix have successfully commercialised products and are expanding their market presence. This should bode well for future revenue streams. 

The ASX also hosts an array of emerging biotech firms that are beginning to make their mark. Botanix Pharmaceuticals Ltd (ASX: BOT) develops dermatological products and drug treatments. The company is preparing for the upcoming commercial launch of a topical treatment for underarm sweating. Federal Drug Administration (FDA) approval for the treatment is expected by late June 2024. 

Meanwhile, Neuren Pharmaceuticals Ltd (ASX: NEU) is focused on developing treatments for severe neurodevelopmental disorders like Rett syndrome and Fragile X syndrome. It recently achieved FDA approval for a drug that treats Rett syndrome in adults and children over two years old. This is the first and only approved treatment for this condition. Another Neuren Pharmaceuticals drug candidate is also in trials for the treatment of several other disorders. 

As these companies progress through regulatory pipelines and reach commercial stages, the impact on their valuations could be transformative.  

What does the future hold for ASX biotech shares? 

Biotech firms on the ASX are benefitting from global trends that favour advancements in medical technology and increased healthcare demand. The performance of individual biotech companies, however, is ultimately dependent on successful outcomes from R&D activities.
 
Investing in this sector comes with high volatility and risk, but does offer substantial growth potential. Current trends suggest a positive trajectory for ASX biotech shares, making them an interesting sector for investors looking for exposure to innovative healthcare solutions.

The post Which ASX biotech shares are pioneering the future of medicine? appeared first on The Motley Fool Australia.

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Motley Fool contributor Katherine O’Brien 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 Telix Pharmaceuticals. The Motley Fool Australia has recommended Telix Pharmaceuticals. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.