Tag: Fool

It has been another busy week for Australia’s top brokers. This has led to the release of a number of broker notes.

Three broker buy ratings that you might want to know more about are summarised below. Here’s why brokers think these ASX shares are in the buy zone:

Aristocrat Leisure Limited (ASX: ALL)

According to a note out of Citi, its analysts have retained their buy rating and $51.00 price target on this gaming technology company’s shares. This followed the release of the poker machine manufacturer’s half year results last week. Citi notes that those results were well ahead of both the market’s and its own expectations thanks largely to lower than expected costs. A strong performance from its Rest of World segment also helped to offset a slightly softer than expected half in the United States. The broker also notes that the Aristocrat Leisure will consider selling its digital assets. It is supportive of the move, given how their growth has slowed. However, the price it receives for these assets will be key. The Aristocrat Leisure share price ended last week trading at $46.28.

CSL Ltd (ASX: CSL)

A note out of UBS reveals that its analysts have retained their buy rating and $330.00 price target on this biotherapeutics giant’s shares. UBS notes that the company’s collections partner, Terumo, has just released its latest quarterly update and it believes there are positives for CSL in there. This because Terumo’s update revealed that it has ramped up the rollout of CSL’s new Rika collection platform to more centres in the United States. So much so, Terumo’s Rika ramp up appears to be ahead of schedule, with the FY 2024 target already reached. This will be good news for CSL given the benefits of the very efficient new technology on plasma yields. The CSL share price was fetching $280.00 at Friday’s close.

Life360 Inc (ASX: 360)

Analysts at Morgan Stanley have retained their overweight rating on this location technology company’s shares with an improved price target of $17.50. This follows the release of the market darling’s recent quarterly update. Morgan Stanley highlights that Life360’s update, which was largely pre-released, revealed that its strong growth not only continued in the quarter but also at the start of the current quarter. This has led to the broker boosting its earnings estimates and valuation accordingly. The Life360 share price ended the week trading at $15.47.

The post Top brokers name 3 ASX shares to buy next week appeared first on The Motley Fool Australia.

More reading

• Here’s how the ASX 200 market sectors stacked up last week
• Brokers name 3 ASX shares to buy now
• Buy, hold or sell these 3 ASX 200 healthcare shares: Experts
• Here are the top 10 ASX 200 shares today
• Why Aristocrat Leisure, Graincorp, Incitec Pivot, and Patriot Battery Metals shares are rising today

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor James Mickleboro has positions in CSL and Life360. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL and Life360. The Motley Fool Australia has recommended CSL. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

ASX consumer discretionary shares led the ASX 200 market sectors last week with a 3.23% gain over the five trading days.

Meantime, the S&P/ASX 200 Index (ASX: XJO) lifted 1.11% to finish the week at 7,814.4 points.

On Thursday, the ASX 200 went close to its all-time high set in April after the S&P 500 hit a new record on encouraging US inflation numbers that stoked hopes of an earlier rate cut.

The Dow Jones index also crossed the 40,000-point mark for the first time ever on Thursday.

Seven of the 11 market sectors finished the week in the green.

Let’s review the week.

Consumer discretionary shares led the ASX sectors last week

It’s interesting to see ASX consumer discretionary shares at the top despite the obvious challenges for the sector today.

Consumers are starting to reduce their spending more and more as pandemic savings run low, and many economists think interest rates won’t be cut until very late in the year, or they could even go up again.

The latest Westpac Consumer Sentiment data is bleak, with sentiment at persistently pessimistic levels for the past two years and “showing few signs of lifting”, according to senior economist Matthew Hassan.

Hassan commented:

Indeed, outside of the deep recession of the early 1990s, this is easily the second most protracted period of deep consumer pessimism since we began surveying in the mid-1970s, with all other sentiment slumps lasting nine months or less.

The latest retail figures from the Australian Bureau of Statistics revealed the “weakest growth on record” outside the pandemic and the introduction of the GST.

Turnover rose just 0.8% for the year to 31 March. This is despite massive population growth driven by high immigration. More than half a million migrants (net) moved here in FY23.

Despite all of this, consumer stocks won the week. Perhaps the cost-of-living measures announced in the Federal Budget on Tuesday prompted investors to buy discretionary stocks?

As my colleague Seb mused: “… more money in pockets from both the tax cuts and the energy rebates will probably disproportionately flow through to consumer discretionary shares.”

Let’s take a look at some of the best performers within the consumer discretionary sector this week.

Which discretionary retail stocks outperformed this week?

The most obvious one to highlight is Aristocrat Leisure Limited (ASX: ALL) shares.

The gaming technology company smashed it out of the park this week. The Aristocrat share price skyrocketed a whopping 17.5% to close at $46.28 on Friday.

The bulk of that gain occurred on Wednesday when the company released its half-year results.

Aristocrat reported a 16.8% jump in net profit after tax (NPAT) to $723.3 million. Other positives were the fully franked interim dividend of 36 cents per share, up 20%, and an extra $350 million in share buybacks.

Among the other discretionary heavyweights, Lottery Corporation Ltd (ASX: TLC) shares rose 1.27% over the five days to finish at $5.19 on Friday.

Harvey Norman Holdings Limited (ASX: HVN) shares gained 1.29% to close at $4.32 on Friday. JB Hi-Fi Ltd (ASX: JBH) shares rose 0.94% to finish at $57.15.

Among the small-cap discretionary stocks, Supply Network Ltd (ASC: SNL) moved 6.38% higher over the week to finish at $22.

By the way, if you’re interested in buying ASX retail shares, top broker Goldman Sachs has just released its latest buying recommendations and 12-month share price targets for each of its favourite retail stocks.

Its top pick is Super Retail Group Ltd (ASX: SUL), owner of Rebel and Supercheap Auto.

ASX 200 market sector snapshot

Here’s how the 11 market sectors stacked up last week, according to CommSec data.

Over the five trading days:

S&P/ASX 200 market sector	Change last week
Consumer Discretionary (ASX: XDJ)	3.23%
Materials (ASX: XMJ)	2.49%
Consumer Staples (ASX: XSJ)	1.42%
A-REIT (ASX: XPJ)	1.13%
Financials (ASX: XFJ)	0.63%
Healthcare (ASX: XHJ)	0.61%
Communication (ASX: XTJ)	0.17%
Utilities (ASX: XUJ)	(0.33%)
Information Technology (ASX: XIJ)	(0.77%)
Industrials (ASX: XNJ)	(1.82%)
Energy (ASX: XEJ)	(3.59%)

The post Here’s how the ASX 200 market sectors stacked up last week appeared first on The Motley Fool Australia.

More reading

• Top brokers name 3 ASX shares to buy next week
• Why this smashed ASX 200 share is a fundie’s top value pick
• Top ASX dividend shares to buy in May 2024
• Here are the top 10 ASX 200 shares today
• Brokers name 3 ASX shares to buy now

Motley Fool contributor Bronwyn Allen has positions in Harvey Norman. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group and Lottery. The Motley Fool Australia has positions in and has recommended Harvey Norman and Super Retail Group. The Motley Fool Australia has recommended Jb Hi-Fi. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Investors that are on the lookout for some big returns might want to check out these ASX 200 shares listed below.

That’s because analysts are tipping their shares to deliver returns of between 15% and 50% for investors over the next 12 months.

Here’s what you need to know about them:

GUD Holdings Limited (ASX: GUD)

Analysts at Morgans see plenty of value in this ASX 200 share at current levels.

GUD Holdings owns a portfolio of companies in the automotive aftermarket and accessories sector. Its brands hold market leadership positions in all categories in which they operate. These brands include Ryco Filters, Wesfil, Narva, Projecta, DBA, and Xtreme Clutch.

Morgans was pleased with the company’s recent investor update, noting that management is guiding to earnings growth in FY 2024 despite the tough economic environment.

As a result, it has put an add rating and $13.71 price target on its shares. This implies potential upside of 24% for investors over the next 12 months.

Karoon Energy Ltd (ASX: KAR)

Another ASX 200 share that could rise strongly from current levels according to Morgans is Karoon Energy. It is an international oil and gas exploration and production company with assets in Brazil.

Morgans likes the company due to its production growth potential, strong balance sheet, and attractive valuation. It also highlights “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.”

The broker currently has an add rating and $2.80 price target on its shares. This suggests that they could rise by a sizeable 52% between now and this time next year.

TechnologyOne Ltd (ASX: TNE)

Finally, Goldman Sachs thinks that TechnologyOne could be an ASX 200 share with the potential to generate big returns. It is an enterprise software company providing a global SaaS ERP solution that transforms business and makes life simple for users.

Goldman highlights that “despite TNE’s improving underlying growth and above-trend PBT outlook, the stock has de-rated from 25.5x to 23.5x NTM EV/EBITDA over the last 12 months while tech peers have re-rated.”

In light of this, the broker thinks now is the time for investors to pounce on its shares. Particularly given that its analysts “forecast a mid-to-high teens (~16%) FY23-26E PBT CAGR (vs low-to-mid teens historically) with potential upside on achievement of TNE’s 115% NRR target (vs ~110% GSe) or UK success.”

The broker has a buy rating and $18.10 price target on its shares. This implies approximately 15% upside for investors.

The post These ASX 200 shares could rise 15% to 50% appeared first on The Motley Fool Australia.

More reading

• 5 stellar ASX growth shares to buy for strong returns
• 5 things to watch on the ASX 200 on Friday
• Here are the top 10 ASX 200 shares today
• Why Credit Corp, GUD, Race Oncology, and Spartan Resources shares are rising
• Why this $1.5 billion ASX 200 stock just surged 10%

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

In the past, Qantas Airways Limited (ASX: QAN) shares have been a good option for income investors.

The airline operator regularly shared a decent portion of its profits with its shareholders each year. This often led to some attractive dividend yields.

However, all that stopped in 2020 when the pandemic reared its ugly head and had Qantas and fellow airlines fighting for survival.

Well, the good news is that not only has Qantas survived, but it is also arguably more profitable than ever now thanks to its post-COVID transformation.

But what we are still yet to see is a dividend from Qantas.

Will that change in the near future? Let’s now take a look and see what analysts are forecasting for the Qantas dividend through to 2026.

Qantas dividend forecast

According to a note out of Goldman Sachs, it believes that it will be a little too soon for dividends in FY 2024.

So, if you’re on the lookout for income this year, you will be out of luck. But it certainly could be worth being patient.

That’s because the broker is forecasting Qantas to pay a 30 cents per share dividend in FY 2025. Based on the current Qantas share price of $6.11, this will mean a dividend yield of 4.9%.

The good news is that Goldman expects the airline operator to maintain its dividend at 30 cents per share in FY 2026. This will mean another 4.9% dividend yield for investors to look forward to receiving.

But should you buy its shares for more than just its future dividends? Goldman thinks you should.

Big returns

The note reveals that the broker sees major upside potential for Qantas shares from current levels.

Goldman has a buy rating and $8.05 price target on its shares. This implies potential upside of 32% for investors over the next 12 months.

To put that into context, a $10,000 investment would be worth approximately $13,200 this time next year if Goldman is on the money with its recommendation.

The broker commented:

As a key beneficiary of the re-opening of the world post-COVID, we expect the airline’s traffic capacity to return to 95% of pre-COVID levels by FY24e, with the airline’s earnings capacity (EPS) expected to exceed that of pre-COVID levels by ~52%. We forecast a ~24% FY19-24e cumulative uplift in unit revenues (c. 4.4%pa), and ~50% drop-through of QAN’s A$1bn+ structural cost-out program. QAN’s current market capitalisation and enterprise value are 10% below and 11% below pre-COVID levels. As such, we believe QAN is not priced for a generic recovery, let alone prospects for improved earnings capacity. We continue to see upside associated with substantially improved MT earnings capacity.

The post Here’s the Qantas dividend forecast through to 2026 appeared first on The Motley Fool Australia.

More reading

• Buy one, sell the other: Goldman’s verdict on these 2 ASX 200 travel shares
• These ASX 200 blue chip shares could rise 10% to 30%
• Short sellers up the ante on Qantas shares
• Here are the top 10 ASX 200 shares today
• 5 ASX shares to buy following the market selloff

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.

Almost all of us would have a superannuation fund. After all, it’s a lawful requirement that any Australian citizen or permanent resident who is employed must be paid superannuation. This super in turn must be paid into a specific super fund for our retirements.

Most Australians utilise the services of an external super fund provider for this purpose. There are hundreds of superannuation funds that manage Australians’ money on their behalf. But some of the most popular include AustralianSuper, Australian Retirement Trust, Aware Super and REST.

However, some Australians prefer to manage their own superannuation through a self-managed super fund (SMSF). Those who choose to use an SMSF have to front up all of the (not insignificant) costs of managing their own superannuation. But in return, they get complete control over what assets their retirement savings are invested in.

According to Australian Taxation Office (ATO) data released earlier this year, SMSFs made up 25% of all superannuation assets in Australia as of 30 June 2023. There were 610,000 SMSFs operating in Australia as of that date.

Many ASX investors might like the sound of running their own super funds. At the end of the day, super is still our money. So today, let’s discuss who should manage their own superannuation.

Who should manage their own superannuation with an SMSF?

The idea of taking direct control of one’s super retirement fund might sound empowering. However, there are some important considerations to keep in mind.

First, running your own SMSF is expensive. A super fund has to be structured as a trust, and trusts have to periodically pay expensive licensing and regulatory fees.

It will only be cheaper to manage your own super if you’re assets are above a certain threshold. Here at the Fool, we’ve discussed how having at least $200,000 in super assets before starting an SMSF is essential. Having less than that can end up costing you more in fees compared with leaving your money in an external super fund. What’s more, you might need even more than that if you wish to match the long-term returns of your average external super fund.

Further, since you will be responsible for your own super, you will lose important protections that other Australians enjoy, like theft or fraud protection. No one is going to bail you out if you make a poor investment decision and lose money in your super fund. Running an SMSF might also mean that your insurance regarding premature death or disability might be affected or voided.

Finally, running your own super requires a huge amount of time. The government estimates that SMSF trustees spend more than eight hours a month (or over 100 hours a year) managing their SMSFs. That’s probably 100 times more than your average Australian.

Foolish takeaway

Running your own super fund with an SMSF might sound empowering or glamorous. But it requires a lot of time, money and discipline. There are also significant downsides that you should be aware of.

So, it’s probably a good idea to seek professional financial and taxation advice before establishing your own super fund.

The post Should you manage your own superannuation? appeared first on The Motley Fool Australia.

More reading

• Buy these 4 ASX ETFs for income, growth, or mining exposure
• Why this smashed ASX 200 share is a fundie’s top value pick
• How I plan to invest my tax cuts
• 5 stellar ASX growth shares to buy for strong returns
• Here’s when Westpac says the RBA will cut interest rates

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.

Due to the growing popularity of exchange traded funds (ETFs), there are now countless options out there for investors to choose from.

For example, whether you’re looking for income, growth, or mining sector exposure, there’s an ASX ETF out there for you.

Let’s now take a look at four ETFs that cover these areas of the market:

BetaShares Global Cybersecurity ETF (ASX: HACK)

The first ASX ETF we are going to look at is for growth investors. It is the BetaShares Global Cybersecurity ETF, which provides investors with exposure to the rapidly growing cybersecurity sector.

Given how demand for cybersecurity services is expected to grow strongly over the coming decade as cybercrime becomes even more prevalent, this could be a great place to invest.

Among the companies included in the fund are industry leaders such as Accenture, Cisco, Crowdstrike, and Palo Alto Networks.

Betashares Global Uranium ETF (ASX: URNM)

If you’re more interested in gaining exposure to the mining sector, then the Betashares Global Uranium ETF could be worth a look.

It aims to track the performance of an index that provides exposure to a portfolio of leading companies in the global uranium industry.

Betashares highlights that as nuclear power is increasingly being accepted as a safe, reliable, low-carbon energy source, demand for uranium is expected to increase materially in the future. This bodes well for the companies included in the fund such as Boss Energy Ltd (ASX: BOE) and Paladin Energy Ltd (ASX: PDN).

ETFS Battery Tech & Lithium ETF (ASX: ACDC)

Another option for mining sector exposure is the ETFS Battery Tech & Lithium ETF.

It provides investors with access to companies throughout the lithium cycle. And with lithium stocks down heavily over past 12 months, now could be a good time to invest if you’re bullish on the long term demand outlook for lithium.

Among its holdings are Mineral Resources Limited (ASX: MIN), Nissan, Pilbara Minerals Ltd (ASX: PLS), Renault, and Tesla.

Vanguard Australian Shares High Yield ETF (ASX: VHY)

Finally, if you are looking for a source of income, then you may want to look at the Vanguard Australian Shares High Yield ETF.

It provides investors with easy access to many of the best ASX dividend shares on the Australian share market. Importantly, this is done with diversity in mind, limiting how much it invests in any particular industry or company.

Among its holdings are giants such as BHP Group Ltd (ASX: BHP), Coles Group Ltd (ASX: COL), and Commonwealth Bank of Australia (ASX: CBA). At present, the ETF trades with a dividend yield of 4.9%.

The post Buy these 4 ASX ETFs for income, growth, or mining exposure appeared first on The Motley Fool Australia.

More reading

• 3 excellent ASX ETFs I think are a buy right now
• Inherited a substantial sum of money? Here’s how I’d spend it (including the ASX stocks I’d buy)
• How much money should I put in one ASX ETF?
• 5 excellent ASX ETFs to buy next week
• How to invest in uranium on the ASX

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 Accenture Plc, BetaShares Global Cybersecurity ETF, ETFS Battery Tech & Lithium ETF, Cisco Systems, CrowdStrike, Palo Alto Networks, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2025 $290 calls on Accenture Plc and short January 2025 $310 calls on Accenture Plc. The Motley Fool Australia has positions in and has recommended BetaShares Global Cybersecurity ETF and Coles Group. The Motley Fool Australia has recommended Betashares Global Uranium Etf, CrowdStrike, and Vanguard Australian Shares High Yield ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

ASX 200 share IDP Education Ltd (ASX: IEL) offers “stand-out value” for investors today after a 40% smashing over the past 12 months, a fundie says.

IDP Education is an international education organisation that helps overseas students get into courses in Australia and other countries, including New Zealand, the United States, and the United Kingdom.

The IDP Education share price has fallen by 40% over the past year to close at $16.05 on Friday.

This compares to an 8.55% gain for the S&P/ASX 200 Index (ASX: XJO) over the same time period.

Here’s why fundie Prasad Patkar is a fan of this ASX 200 education stock.

Why this ASX 200 education share is a buy today

Patkar is the head of investments at Platypus Asset Management, a Sydney-based wealth manager that oversees $5 billion in assets.

Platypus’s Australian Equities Fund made Mercer’s top 10 list over one year after delivering a 15.71% return over the 12 months ending 30 April.

Platypus describes the fund as a high-conviction growth fund that usually holds 25-40 ASX shares.

It has exposure to ASX small-caps, and all of its selected stocks undergo a fundamental environmental, social, and corporate governance (ESG) analysis.

The fund’s track record is an average 8.31% annual return since inception on 30 April 2006.

Among the shares held within the fund today are IDP Education shares.

Patkar reckons the ASX 200 education share is the most undervalued stock they currently hold.

As reported in the Australian Financial Review (AFR), he puts this down to short-term regulatory challenges, and maintains that IDP is on track to gain competitive strength over the next one to two years.

Patkar said:

At the present time we think IDP Education is stand-out value.

The business is facing regulatory headwinds in its key markets which we believe will dissipate over the next 12 to 24 months, and the business will emerge in a stronger position from a competitive standpoint than what it is today.

According to CommBank, IDP Education shares are trading on a price-to-earnings (P/E) ratio of 26.77.

Why overweight in ASX consumer discretionary stocks?

IDP Education is an ASX 200 consumer discretionary share.

The Australian Equities Fund is currently overweight in this sector despite high inflation and interest rates.

Consumer discretionary stocks make up 14.35% of the fund, according to the latest fund update.

However, the sector only comprises 7.28% of the ASX 300 Accumulation Index. (This is the index that Platypus aims to outperform (before fees and expenses) over a rolling three-year period.)

Consumer discretionary is the third biggest sector position in the fund behind healthcare at 19.56% and materials at 18.39%.

Patkar explains why they are overweight on ASX consumer discretionary stocks:

If we have a high conviction in the investment case for a stock, that is the risk reward stacks up, we buy the maximum we can, subject only to liquidity constraints.

Being overweight or underweight a sector is just an outcome.

Other discretionary stocks held by the fund include ARB Corporation Ltd (ASX: ARB), Lovisa Holdings Ltd (ASX: LOV), Aristocrat Leisure Limited (ASX: ALL), and Domino’s Pizza Enterprises Ltd (ASX: DMP).

Patkar said:

We believe each of these businesses has resilience and defensive properties to withstand a moderation in consumer discretionary spending.

The post Why this smashed ASX 200 share is a fundie’s top value pick appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• 5 things to watch on the ASX 200 on Friday
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• Why IDP Education, JB Hi-Fi, PYC, and Renascor shares are falling today
• 5 things to watch on the ASX 200 on Thursday

Motley Fool contributor Bronwyn Allen has positions in Domino’s Pizza Enterprises. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended ARB Corporation, Domino’s Pizza Enterprises, Idp Education, and Lovisa. The Motley Fool Australia has recommended ARB Corporation, Domino’s Pizza Enterprises, Idp Education, and Lovisa. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The recent Federal Budget contained some good economic news for almost all Australians. From 1 July, every single income taxpayer’s tax rate is set to fall.

These tax cuts will mean that come the new financial year, everyone who earns income above the tax-free threshold of $18,200 per annum will have fewer dollars taken away by the taxman every paycheque.

Chances are that most people won’t really notice these tax changes. After all, we tend not to miss what we don’t have. But we also tend to adjust to what we do have fairly easily. But I’m going to be making an effort to redirect the extra dollars I’ll be getting from these tax cuts into investments in ASX shares.

I think investing in ASX shares is the most effective way for Australians to build additional wealth and retire earlier and more comfortably than they would by relying on their salaries, savings and superannuation.

But ASX shares build wealth most effectively when we properly harness the power of compound interest.

Compounding works more effectively the more time and money we give it. As such, I try and invest every spare dollar that I can, as soon as I can, into buying more ASX shares.

So, with the financial boost of a tax cut coming our way, I’m looking forward to ramping up my investing firepower.

Investing my tax cuts in ASX shares

The exact ASX shares I will buy with my tax cut money all depends on what the markets are doing at the time.

Ideally, I’d love to add to some of my favourite portfolio positions. These include Wesfarmers Ltd (ASX: WES) and Washington H. Soul Pattinson and Co Ltd (ASX: SOL). As well as the VanEck Morningstar Wide Moat ETF (ASX: MOAT) and MFF Capital Investments Ltd (ASX: MFF).

However, as of today, most of these investments are trading pretty close to all-time highs. If this continues, I might decide that the risk-reward balance isn’t attractive enough to justify additional investments using my tax-cut money in the next few months.

As such, I might turn to some new positions. As I outlined yesterday, these could include Infratil Ltd (ASX: IFT), or the Regal Investment Fund (ASX: RF1). Or perhaps the high-flying L1 Long Short Fund Ltd (ASX: LSF).

If I don’t like where those investments are priced at, I would probably deploy my new tax-cut cash into simple index funds like the Vanguard Australian Shares Index ETF (ASX: VAS). I think these investments are a great choice when all else fails the valuation test.

All in all, I expect any additional dollars I get from the tax cuts after 1 July to end up in the share market. In my view, this is the best choice for anyone wishing to build wealth as effectively as possible.

The post How I plan to invest my tax cuts appeared first on The Motley Fool Australia.

More reading

• Here are the 2 ASX shares I might buy next
• What is the dividend yield of Wesfarmers shares?
• With $1,000 to invest, should I buy ASX growth stocks or income shares?
• Why these ASX ETFs could be fantastic buy and hold options
• 5 things to watch on the ASX 200 on Wednesday

Motley Fool contributor Sebastian Bowen has positions in Mff Capital Investments, VanEck Morningstar Wide Moat ETF, Vanguard Australian Shares Index ETF, Washington H. Soul Pattinson and Company Limited and Wesfarmers. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Washington H. Soul Pattinson and Company Limited and Wesfarmers. The Motley Fool Australia has positions in and has recommended Washington H. Soul Pattinson and Company Limited and Wesfarmers. The Motley Fool Australia has recommended VanEck Morningstar Wide Moat ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

If you’re a fan of ASX growth shares, then you will be pleased to know that analysts are predicting strong returns from the five listed below.

Here’s what you need to know about these top shares:

Lovisa Holdings Ltd (ASX: LOV)

The first ASX growth share to look at is Lovisa. It is a fashion jewellery retailer that is growing at a rapid rate thanks to its global expansion.

Bell Potter is very positive on this expansion. In fact, it believes Lovisa can grow its network by 10% per annum between FY 2023 and FY 2034. This is expected to underpin strong earnings growth over the next decade.

The broker has a buy rating and $36.00 price target on Lovisa’s shares. This implies potential upside of 13% for investors.

NextDC Ltd (ASX: NXT)

Another ASX growth share that has been given the thumbs up by analysts is NextDC.

It is one of Asia’s most innovative data centre-as-a-service providers. It is building the infrastructure platform for the digital economy, delivering the critical power, security and connectivity for global cloud computing providers.

Morgan Stanley is very positive on the company’s outlook thanks to its belief that the data centre market will grow materially over the remainder of the decade.

The broker currently has an overweight rating and $20.00 price target on its shares. This suggests upside of 13.5% is possible over the next 12 months.

TechnologyOne Ltd (ASX: TNE)

Over at Goldman Sachs, its analysts think that enterprise software provider TechnologyOne could be ASX growth share to buy right now.

It likes the company due to its attractive valuation and positive growth outlook. The latter is being underpinned by its market leadership, defensive end markets, and mission-critical systems.

Goldman has a buy rating and $18.10 price target on Technology One’s shares. This implies 14% upside from current levels.

Webjet Limited (ASX: WEB)

A fourth ASX growth share for investors to consider buying is online travel booking company Webjet.

Analysts at Morgans are bullish on the company. This is due partly to its key WebBeds B2B business and the “significant market share still up for grabs.” The broker believes this leaves the company well-positioned for the future.

Morgans has an add rating and price target of $10.33 on Webjet’s shares. This suggests potential upside of 24% for investors.

Xero Ltd (ASX: XRO)

A final ASX growth share for investors to look at is Xero.

It is a cloud accounting platform provider with an estimated global market opportunity of 100 million small to medium sized businesses.

It is thanks partly to this huge market opportunity that Goldman Sachs is very bullish on Xero’s outlook and is tipping it as a buy. The broker has a buy rating and $156.00 price target on its shares. This implies potential upside of 29% from current levels.

The post 5 stellar ASX growth shares to buy for strong returns appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Lovisa, Nextdc, Technology One, and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group, Lovisa, Technology One, and Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool Australia has recommended Lovisa and Technology One. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

There has been a lot of speculation recently that interest rates may need to go higher before they go lower in an effort to tame inflation.

This would of course be very bad news for borrowers, which are already being squeezed by higher interest rates.

The good news, though, is that Westpac Banking Corp (ASX: WBC) continues to believe that the next move by the Reserve Bank of Australia (RBA) will be to take rates lower.

And the even better news that the first rate cut could be coming later this year and that there could be plenty more on the way.

What is Westpac saying about interest rates?

According to the Westpac Weekly economic report, the bank’s chief economist, Luci Ellis, hasn’t seen anything to say that inflation will be heading in the wrong direction again. She said:

Households in Australia are collectively doing it tough. Their cash flows are being squeezed by the high cost of living, high level of interest rates and a rising tax take. Consumption per capita has fallen more than 2½% since the RBA started raising rates. Australia stands out from its peers on this front.

At the same time, inflation is too high and the labour market is tight, though not quite as tight as late last year. The labour force data for April confirmed this gradual easing, helping to cut through the noise of the first three months of the year. And the Wage Price Index release, also this week, shows that wages growth is starting to roll over from its recent peak, as was widely expected. To be fair, these are lagging indicators. But there is nothing in these data – or more leading indicators – pointing to even higher inflation pressures down the track.

When will rates go lower?

As things stand, Westpac is forecasting the RBA to make its first interest rate cut in December. This will see a 25 basis points cut to 4.1% (from 4.35% today).

After which, Westpac’s economics team believes the central bank will then move swiftly with its cuts.

By March 2025, another 25 basis points cut to 3.85% is forecast and then by June rates are expected to fall to 3.6%.

But that’s not where it ends. Westpac is tipping the RBA to then take interest rates to 3.35% by September 2025 and then finally 3.1% by December 2025.

In summary:

• Today: 4.35%
• December 2024: 4.1%
• March 2025: 3.85%
• June 2025: 3.6%
• September 2025: 3.35%
• December 2025: 3.1%

Overall, it seems that some relief could be on the way for borrowers in the not so distant future according to Westpac.

The post Here’s when Westpac says the RBA will cut interest rates appeared first on The Motley Fool Australia.

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