Tag: Fool

I recently invested in Guzman Y Gomez Ltd (ASX: GYG) shares for my portfolio for a few compelling reasons.

Let me say upfront that this buy was a minimal starting investment. Before the initial public offering (IPO), I was thinking about investing at the IPO price of $22. The Guzman Y Gomez share price soared to $30 on the opening day, causing me to decide to wait for a better price.

Perhaps unsurprisingly, and luckily for me, the GYG share price had dropped 17% by 1 July 2024. I decided to make a small investment when it hit the $25 mark. The price may fall further. I’d be interested in buying more if it did slip to a better valuation.

Why I decided to buy Guzman Y Gomez shares

Over the years, I’ve regularly written that one of the most helpful elements in helping an ASX share deliver strong returns is international growth. Australia has a relatively small population, whereas Asia, the United Kingdom, continental Europe, and North America are regions that can unlock much more growth potential.

GYG already has a small presence in three other countries outside of Australia – the United States, Singapore and Japan.

The Mexican fast-food business has 16 restaurants in Singapore and five in Japan, owned and operated by separate master franchisees. The ASX share earns royalty revenue from franchisee sales. It also has four corporate restaurants in the US.

At the latest count, GYG had 185 locations in Australia, with 62 corporate restaurants and 123 franchise restaurants. It plans to open 30 new restaurants in FY25 and increase its annual openings to 40 per year within five years.

Guzman Y Gomez has made significant progress over the last several years. In FY15, it made $101 million in global network sales, which increased to $759 million in FY23. This represents a compound annual growth rate (CAGR) over that time period. It expects another 50% growth of global network sales to $1.14 billion by FY25.

If the business grows its global network sales at a CAGR in the double-digits by 2030, I think it has an exciting future. As the owner of the GYG brand, the ASX share can benefit from global expansion, even if done through franchisees. I hope Guzman Y Gomez can expand into new countries in coming years, such as New Zealand and the UK.

Impressively, the business reported comparable restaurant sales growth in Australia in the double digits in FY22, FY23 and the first half of FY24. This bodes well for the ongoing growth of existing stores and justifies more locations across the country for the coming years.

If comparable store growth can remain comfortably above inflation, I’ll continue to be optimistic about Guzman Y Gomez shares for the long term.

Rising profit margins

Rolling out more locations can help grow its revenue. But the key reason why I think today’s GYG share price could be appealing for the long term is the potential for rising profit margins.

It’s true that the company is not priced cheaply. Even the $22 IPO GYG share price was judged by many market investors to be expensive. And there are many growth expectations built into the value.

However, I expect the company’s margins to significantly lift in the coming years, so profit can rise faster than revenue (which is predicted to rise quickly). Investors usually judge profitable businesses by their net profit capabilities.

GYG expects its underlying earnings before interest, tax, depreciation and amortisation (EBITDA) to global network sales margin to increase from 3.9% in FY23 to 4.5% in FY24 and then rise to 5.3% in FY25.

I think margins can continue to rise as the company adds more stores globally, with improving same-store sales helping increase the value of each location for GYG and franchisees.

The post Why I invested in Guzman Y Gomez (GYG) shares this week for the long-term appeared first on The Motley Fool Australia.

More reading

• GYG share price ends the week at $28. Is $62 in its future?
• Why Clinuvel, Guzman y Gomez, Magellan, and Sandfire shares are charging higher
• Top brokers name 3 ASX shares to buy today
• Why APA Group, Chalice Mining, Guzman Y Gomez, and Monadelphous shares are falling
• Down 18% since listing, should you buy Guzman Y Gomez shares now?

Motley Fool contributor Tristan Harrison has positions in Guzman Y Gomez. 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.

In today’s volatile market, finding reliable dividend-paying stocks can provide much-needed stability and consistent income for investors. However, identifying such ASX dividend stocks can often feel like searching for hidden gems amidst the market noise and uncertainty.

The following two ASX dividend shares might be worth consideration today if you’re a dividend-focused investor.

APA Group (ASX: APA)

APA Group is Australia’s leading energy infrastructure business, owning and operating natural gas transportation assets. With a vast network of pipelines spanning the country, APA plays a crucial role in delivering energy to homes and businesses.

APA Group shares currently offer a dividend yield of 6% using actual payments over the last 12 months. The good news is that the company guided for FY24 dividends per share (DPS) of 56 cents, implying a 7% dividend yield at the current share price.

Macquarie anticipates APA Group’s attractive dividends will continue in FY25. The broker projects FY25 DPS of 57.5 cents, slightly higher than FY24 DPS, as my colleague James highlighted.

This attractive yield is backed by stable cash flows generated from its long-term contracts with major energy producers and consumers.

Investing in APA Group provides exposure to Australia’s essential energy infrastructure sector. With a reliable dividend yield and strategic growth initiatives, APA can be a compelling choice for income-seeking investors looking for stability and potential capital appreciation.

The APA Group share price has fallen 20% over the past year and closed Friday trading at $7.91.

Rural Funds Group (ASX: RFF)

Rural Funds Group is a leading agricultural real estate investment trust (REIT) in Australia, owning a diversified portfolio of agricultural assets. These include vineyards, cattle farms, water assets, and almond orchards spread across various regions.

Currently, Rural Funds Group offers investors an attractive dividend yield of around 6%. The REIT’s business model focuses on long-term leasing arrangements with agricultural tenants, providing predictable and sustainable cash flows.

Amid global demand for agricultural products, Rural Funds Group stands to benefit from stable rental income and potential capital appreciation of its agricultural properties. The REIT’s diversified portfolio mitigates risks associated with any single agricultural sector.

Following a recent dip in its unit price, Rural Funds Group is now trading below its book value. Its current price-to-book (P/B) ratio stands at 0.72x based on reported figures, which include water entitlements at their book values. When adjusting for the estimated market value of these water entitlements, the company estimates its net asset value (NAV) to be $3.07 per unit as of December 31, 2023. This adjustment lowers its P/B ratio even further to 0.66x.

Investing in Rural Funds Group offers exposure to Australia’s resilient agricultural sector with the added benefit of consistent dividend income. The REIT’s strategic portfolio management and focus on long-term leases ensure reliable returns for investors seeking income and stability.

The Rural Funds Group share price rose 6.6% over the past year and closed Friday at $2.01.

The post 2 bargain Australian shares with dividend yields higher than 6% appeared first on The Motley Fool Australia.

More reading

• Analysts say these ASX dividend stocks with ~7% yields are top buys
• Australian dividend machines: 3 ASX shares that generate reliable passive income
• ASX 200 stock slips on $145 million impairment
• Why APA Group, Chalice Mining, Guzman Y Gomez, and Monadelphous shares are falling
• Brokers says these ASX 300 dividend shares are top buys

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 Apa Group and Rural Funds Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The 2023-24 financial year may have been a choppy ride for ASX investors, but overall, it turns out that FY24 was also pretty lucrative!

Despite all the ups and downs, geopolitical headwinds and the ever-present fear of unfettered inflation, the ASX 200 managed to deliver returns of 12.1% (including dividends) in FY24. Not too shabby!

So, if you sat on the shore last financial year, hoping for calmer waters before diving into the stock market, these are the potential gains you missed out on.

While an encore performance in FY25 is not guaranteed, the ASX 200 has delivered average annual returns of around 9% over the past 30 years.

Therefore, the longer you sit on the sidelines, the less time those returns have to compound your wealth.

So, if you’re ready to take the plunge, you’re in luck because we asked our Foolish writers which ASX shares should be on your buy list for FY25.

Here is what they told us:

6 best ASX shares for the new financial year (smallest to largest)

• Johns Lyng Group Ltd (ASX: JLG), $1.59 billion
• MFF Capital Investments Ltd (ASX: MFF), $2.23 billion
• Betashares Nasdaq 100 ETF (ASX: NDQ), $4.98 billion
• Steadfast Group Ltd (ASX: SDF), $6.85 billion
• NextDC Ltd (ASX: NXT), $10.68 billion
• Resmed Inc (ASX: RMD), $41.89 billion

(Market capitalisations as of market close 5 July 2024).

Why our Foolish writers love these ASX stocks

Johns Lyng Group Ltd

What it does: Johns Lyng specialises in building and restoration services in Australia and the United States. It restores properties and contents after insured events. Customers include major insurance companies, commercial enterprises, local and state governments, body corporates and retail customers.

By Tristan Harrison: The Johns Lyng share price has fallen almost 20% since 26 February 2024, making the company better value to buy today.

Johns Lyng is growing at a good pace. The normalised business as usual (BAU) net profit after tax (NPAT) grew by 15.8% to $26.4 million in the first half of FY24, and I think its underlying NPAT can continue to grow strongly as well.

The company is expanding its geographic presence, with New Zealand being one source of recent good news after Johns Lyng signed a contract with Tower Ltd (ASX: TWR) — the first agreement signed with a major national insurer in New Zealand.

In addition, Johns Lyng USA has been appointed to the Allstate emergency response and mitigation panel. Allstate is one of the largest insurance companies in the US.

The ASX share has also hinted that there could be further geographic expansion in the future.

The business can also grow profit if there is more catastrophe response work. The company has previously said that although inherently unpredictable, workflows stemming from catastrophe events continue to exhibit “larger and more enduring characteristics”, with work from prior events taking some time to finalise.

Motley Fool contributor Tristan Harrison owns shares of Johns Lyng Group Ltd.

MFF Capital Investments Ltd

What it does: MFF Capital is a listed investment company (LIC) that, like all LICs, manages an underlying portfolio of investments on behalf of its shareholders.

By Sebastian Bowen: MFF Capital is one of the best-performing and longest-held investments in my ASX share portfolio. As such, I would happily recommend it to anyone as a potential buy for FY2025.

MFF is run by Chris Mackay, one of Magellan‘s co-founders. Mackay is a disciple of Warren Buffett and aims to emulate Buffett’s style in MFF’s portfolio — a trait that very much draws me to this company.

As such, you’ll normally find high-quality American companies with strong moats in said portfolio, which are typically held for years at a time.

At the last count, these stocks included Amazon, Bank of America, L’Oreal, JP Morgan Chase, Mastercard and Home Depot.

This approach has worked well for MFF in the past, and I don’t see why it won’t continue to be effective in the future. With one share, you can get access to some of the best companies in the world, run by a world-class fund manager.

That’s why I’m happy to hold MFF and think it will continue to be a top-quality investment over the 2025 financial year.

Motley Fool contributor Sebastian Bowen owns shares of MFF Capital Investments Limited, Amazon and Mastercard.

Betashares Nasdaq 100 ETF

What it does: NDQ is an exchange-traded fund (ETF). You can buy and sell shares just as you would with any other ASX stock. The ETF is intended to track the performance of the NASDAQ-100 Index (NASDAQ: NDX). NDQ currently holds 102 technology-focused shares.

By Bernd Struben: NDQ provides investors with diversified exposure to some of the world’s leading tech companies with a single investment.

Individual tech stocks may go higher or lower in the financial year ahead. But I’m a firm believer in the ongoing power of the artificial intelligence (AI) revolution to lift most, if not all, of the world’s leading tech stocks in FY 2025.

And you’ll find most of those top global tech stocks listed on the Nasdaq 100.

Indeed, NDQ’s top four holdings are: Microsoft, Apple, Nvidia and Amazon.

Between them, these companies are investing billions of dollars in advancing their own AI ambitions, with Nvidia producing the chips that make it all happen.

The NDQ share price is up 29% over 12 months. The ETF also pays two annual distributions, with shares trading on a 2.7% unfranked trailing yield.

Annual management fees run at 0.48%.

Motley Fool contributor Bernd Struben does not own any of the shares mentioned.

Steadfast Group Ltd

What it does: Steadfast Group is Australia’s largest general insurance broker network, providing businesses and individuals with a broad range of insurance products and services.

By Kate Lee: I firmly believe that ‘time in the market’ is more crucial than ‘timing the market.’ Holding high-quality shares for the long term is, in my view, the key to successful investing. 

With that said, it’s also beneficial to understand where we stand in the investment market cycles. As I highlighted, we’re likely in the later stage of the bull cycle, which makes me cautious about cyclical shares.

In light of this, I believe Steadfast Group is a company that fits both strategies, as it operates in a non-cyclical industry.

Its earnings per share (EPS) have consistently grown from 7 cents in FY15 to 18 cents in the last 12 months to December 2023, with only two exceptions due to the COVID-19 pandemic.

Similarly, the company has increased its dividends-per-share every year for the last decade. 

The Steadfast share price has lifted 12.5% over the past month since we last highlighted this stock, but hasn’t moved significantly from its price of $6.09 a year ago. 

Currently, Steadfast shares are valued at 20x its FY25 earnings estimates by S&P Capital IQ, compared to their trading range of 15x to 25x. I think this PE multiple is still attractive,  considering the last time it reached 15x PE was in April 2020 during the COVID-19 pandemic.

Motley Fool contributor Kate Lee does not own shares of Steadfast Group Ltd.

NextDC Ltd

What it does: NextDC is a technology company enabling business transformation through innovative data centre outsourcing solutions, connectivity services, and infrastructure management software. 

By James Mickleboro: I think NextDC could be a great ASX share to buy for the new financial year.

The data centre solutions company has been growing rapidly for many years and appears well-placed to continue this trend long into the future. This is due to the insatiable demand for data centre capacity thanks to the cloud computing and artificial intelligence megatrends.

The team at Morgans agrees with this view. The broker thinks that “NXT is especially well placed to succeed given its partner ecosystem (enterprise users of cloud are also AI users).” In fact, the broker believes that if “NXT can fund and fill the planned pipeline, then it could be a $40+ stock.”

For now, though, the broker has an add rating and a $19.00 price target on the company’s shares.

Motley Fool contributor James Mickleboro owns shares of NextDC Ltd.

Resmed Inc

What it does: Resmed is the global leader in sleep apnea treatment devices. The company is known for its continuous positive airway pressure (CPAP) machines, delivering improved sleep and respiratory care to people in more than 140 countries.

By Mitchell Lawler: After surging 49% from its September low to around $32, Resmed shares are back on the ropes following new data on GLP-1s, dubbed weight-loss drugs, last month. 

On June 24, Eli Lilly and Co (NYSE: LLY) revealed a substantial reduction in sleep apnea events among people treated with its tirzepatide injection (branded Mounjaro) compared to the placebo during trials. 

The findings unsurprisingly rattled Resmed investors, resulting in an 11% fall in the share price since then. 

Personally, I see the retreat as an opening to buy more Resmed shares at an undemanding price. 

Weight-loss drugs may erode the company’s total addressable market. Still, given that the market is forecast to reach 1.2 billion people by 2050 (versus Resmed’s 23.5 million patients in 2023), there’s ample room for both treatment methods to coexist. 

Motley Fool contributor Mitchell Lawler owns shares of Resmed Inc.

The post Top ASX shares to buy for FY25 appeared first on The Motley Fool Australia.

More reading

• ASX NASDAQ (NDQ) ETF: Up 30% in a year, should you buy now or wait?
• 5 top ASX growth shares that could rise ~10% to 25%
• Buy these market-beating ASX ETFs in FY25
• Here are the top 10 ASX 200 shares today
• 9 ASX All Ords shares lifted to ‘strong buy’ consensus ratings in June

Bank of America is an advertising partner of The Ascent, a Motley Fool company. JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon, Apple, Bank of America, Home Depot, JPMorgan Chase, Johns Lyng Group, Mastercard, Microsoft, Nvidia, and ResMed. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2025 $370 calls on Mastercard, long January 2026 $395 calls on Microsoft, short January 2025 $380 calls on Mastercard, and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has positions in and has recommended ResMed and Steadfast Group. The Motley Fool Australia has recommended Amazon, Apple, Betashares Nasdaq 100 ETF – Currency Hedged, Johns Lyng Group, Mastercard, Microsoft, and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Guzman Y Gomez Ltd (ASX: GYG) share price rallied today, recovering from its sour start to the week. An improved appetite for shares in the Mexican-inspired food joint helped it finish the week in finer form than it began.

At the closing bell, GYG shares fetched $27.75, up 4% from yesterday’s close — squeezing out a weekly gain of 1.2%. Whereas, the S&P/ASX 200 Index (ASX: XJO) stepped up 1.3% during the week.

While the GYG share price might have had a quiet week, could its future be a lot spicer? According to one analyst, store growth is the magic ingredient for one red-hot valuation.

United States key to doubling the GYG share price

Price targets are a dime a dozen. Analysts crunch the numbers and give their best guess on a company’s share price in 12 months, often changing frequently with the release of earnings and other material information.

What is far less common is a price target of more than double the current market rate.

The team at Morgans believes this is within the realm of possibilities for GYG shares. But only if the newly listed company achieves a milestone — and a major milestone at that.

GYG now operates 210 stores in Australia, Singapore, Japan, and the United States, of which only four are located in the US. Analysts at Morgans think the GYG share price could reach $62 apiece if the company reaches 500 restaurants in the US.

It’s a tall order, considering it took the burrito seller 18 gruelling years to grow from one to 210 stores.

GYG aims to have 1,000 stores in Australia by 2050, which ‘appears far from unreasonable’ to Billy Boulton and Alexander Mees of Morgans. The domestic growth forms the basis of the broker’s baseline $30.80 price target.

To arrive at $62, a 123% premium on Friday’s share price, GYG would need 500 US stores alongside the 1,000 Australian outlets.

Why it still mightn’t be enough

The caveat to all of this… it’s a price target for 20 years into the future.

Why does this matter?

Well, a 123% return in one year is phenomenal! … over five years, terrific! … but over 20 years.

If the GYG share price is $62 in 20 years from now, it would equate to an average annualised return of 6.15%, which sounds okay. However, the ASX 200 has averaged around 9% per annum over the past 20 years — no ambitious store rollout required.

The post GYG share price ends the week at $28. Is $62 in its future? appeared first on The Motley Fool Australia.

More reading

• Why Clinuvel, Guzman y Gomez, Magellan, and Sandfire shares are charging higher
• Top brokers name 3 ASX shares to buy today
• Why APA Group, Chalice Mining, Guzman Y Gomez, and Monadelphous shares are falling
• Down 18% since listing, should you buy Guzman Y Gomez shares now?
• Why Guzman Y Gomez, MacMahon, Strike Energy, and WiseTech shares are sinking

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 no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Here are the top 10 ASX 200 shares today appeared first on The Motley Fool Australia.

More reading

• What will it take for DroneShield shares to enter the ASX 200?
• The best ASX 200 share of each market sector in FY24
• 3 high-flying ASX 200 stocks leading the charge into FY 2025
• Why Clinuvel, Guzman y Gomez, Magellan, and Sandfire shares are charging higher
• Up 15% in a month: Are Magellan shares still cheap enough to buy?

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

Shares of NIB Holdings Ltd (ASX: NHF) finished trade on Friday at $6.98, down 1.97%.

Whilst there’s been nothing market sensitive released by the company today, the moves come amidst a public standoff with St Vincent’s Health Australia regarding healthcare costs.

Some have raised concerns about the future of the insurer’s partnership with the hospital as a result. Here’s what you need to know.

St Vincent’s threatens to end negotiations

NIB shares were in focus on Thursday after non-profit hospital group St Vincent’s Health Australia put the health fund on notice, saying it could “walk away from their contract within the next 65 business days unless a new fairer funding agreement is reached”.

The contracts are to do with the funding agreement St Vincent’s has with NIB.

The group says it has asked NIB to provide a “fair funding agreement” that reflects increased healthcare costs of private hospitals.

St Vincent’s is Australia’s largest operator of non-profit private hospitals. It runs 10 private hospitals throughout NSW, QLD and Victoria and says NIB has “not put a fair offer on the table” whilst shutting the door on any future negotiations.

Now the group has threatened to walk away from talks with NIB after being left with “no choice”.

Unless a new funding agreement is reached within the notice period, St Vincent’s will end its contract with nib in early October (final day of notice period – Thursday, 3 October). 

This means that, after this date – unless an agreement is reached in the meantime – patients who use nib for their private health insurance may be required to contribute more to the cost of their care when using a St Vincent’s private hospital.

St Vincent’s CEO, Chris Blake, said that over 70 private hospitals have closed in the past 5 years here in Australia. In fact, the Federal Government is reviewing the issue right now in a national review.

Blake also described St Vincent’s frustrations:

In the last 12 months, St Vincent’s has negotiated major new agreements with Medibank Private Ltd (ASX: MPL), HCF, and the Alliance group of health funds. While the negotiations were robust, both sides gave ground to achieve a fair result. 

This is not a decision we take lightly. This is the first time in our 167-year history that St Vincent’s has given notice to a private health fund that we intend to end our agreement. It’s an indication of how seriously we treat this matter.

But nib has given us no choice but to make this call. 

NIB shares continue downtrend

Whilst the news isn’t market-sensitive, NIB shares drifted 5% lower this week. This continues a longer-term downtrend that’s been in place for the past three months.

In that time, NIB is down from highs of $7.82 per share on 9 April.

The firm reassured its members of continued coverage while it hopes to resume negotiations with St Vincent’s Health Australia.

In a statement on Friday, NIB’s CEO, Mark Fitzgibbon, assured members booked for treatment at St Vincent’s hospitals that they will remain covered until at least October 3, according to The Australian.

Fitzgibbon expressed disappointment at St Vincent’s decision to go public with the dispute but insisted that NIB has made a fair offer.

If negotiations fail, NIB members can still receive treatment initiated before October 3 until discharge.

What this means for investors

Despite the dispute, brokers are positive. Goldman Sachs recently rated NIB as a buy with a price target of $8.10, citing favourable operating trends and strong policyholder growth. NIB’s approved rate increases of 4.1% this year are expected to support its financial stability despite the current challenges.

Still, the ongoing negotiations between NIB and St Vincent’s are critical for maintaining coverage and customer satisfaction.

Investors should keep a close eye on the developments, as the outcome could significantly impact NIB’s share price and market position.

NIB shares are down over 19% in the last 12 months.

The post Will NIB shares bleed to keep St Vincent’s onside? appeared first on The Motley Fool Australia.

More reading

• Buy or hold? Top broker rates these 2 ASX 200 shares

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

The S&P/ASX All Ordinaries Index (ASX: XAO) is slightly in the red on Friday, down 0.11%.

There are 500 companies within the ASX All Ords index.

We thought it might be interesting to see which ASX All Ords share delivered the best capital growth in FY24 and which one languished at the bottom of the pile.

The results are in.

Best ASX All Ords share of FY24 for growth

Clarity Pharmaceuticals Ltd (ASX: CU6)

ASX All Ords healthcare share Clarity Pharmaceuticals shot the lights out in FY24. The Clarity Pharmaceuticals share price soared by 674.29% over the 12 months.

Clarity is a clinical-stage radiopharmaceutical company. It’s developing next-generation therapy and imaging products used for the diagnosis and treatment of cancer and other serious diseases.

The majority of the stock’s impressive price ascension in FY24 began in April.

That’s when the company announced that the first patient ever to be dosed with two cycles of 67Cu-SAR-bisPSMA at 8GBq had a complete response to treatment based on RECIST criteria.

That meant the patient had maintained undetectable levels of prostate cancer for almost six months.

In March, Clarity successfully completed an institutional capital raising of $110 million. It then ran a fully underwritten retail entitlement offer at $2.55 per share, which raised a further $10.8 million.

The funds will be used to continue radiopharmaceutical product development.

Last month, Clarity announced it had received a near-$10 million research and development tax incentive refund as part of the Australian Federal Government’s R&D Tax Incentive program.

The Clarity Pharmaceuticals share price closed FY24 at $5.42.

Worst ASX All Ords share of FY24

Core Lithium Ltd (ASX: CXO)

The share price of ASX All Ords lithium share Core Lithium tanked by 90% in FY24.

Just a year ago on 30 June 2023, Core Lithium shares were worth 90 cents a piece. That was already a devastating 52% fall from their all-time record high of $1.875 on 13 November 2022.

On the final trading day of FY24, the Core Lithium share price closed at 9.35 cents. So, it’s not surprising that the stock was at the bottom of the ASX All Ords index for FY24.

The biggest news out of the company in FY24 was the suspension of mining at its flagship Finniss Project in the Northern Territory in January.

The company did this to conserve capital while lithium prices continued to fall. Since then, Core Lithium has continued analysing exploration results and processing stockpiled ore.

In the latest quarterly update, Core Lithium told investors its cash balance had reduced from $124.8 million at the end of December to $80.4 million at the end of March.

However, the company said it intended to sell an inventory of lithium concentrate and fines in 4Q FY24. At the time of the announcement, it valued the inventory at $25 million.

The post Guess which 2 ASX All Ordinaries shares were the best and worst performers of FY24? appeared first on The Motley Fool Australia.

More reading

• ASX lithium shares: Screaming bargains or falling knives?
• 5 ASX All Ords shares that rose 250% to 700% in FY24
• Which ASX lithium shares are financially primed to survive this rut?
• 9 ASX All Ords shares lifted to ‘strong buy’ consensus ratings in June
• Will FY25 be kinder to Core Lithium shares?

Motley Fool contributor Bronwyn Allen has positions in Core Lithium. 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.

DroneShield Ltd (ASX: DRO) shares have enjoyed one of the most euphoric share price runs of any stock in the All Ordinaries Index (ASX: XAO) over the past 12 months.

A year ago, Droneshield shares were going for just 24 cents apiece. But fast forward to today, and those same shares are worth an extraordinary $1.94. That translates into a 12-month share price gain of 710%.

The gains are even larger for longer-term investors of this ASX defence share.

If one had owned Droneshield stock since April of 2020, when this company was priced at just 10 cents a share, they would be looking at a four-and-a-bit-year gain of 1,840%.

This stunning run leaves Droneshield with a respectable market capitalisation of $1.53 billion today.

With this kind of market cap under Droneshield’s belt, many investors might be wondering why Droneshield shares aren’t in the exclusive S&P/ASX 200 Index (ASX: XJO) club. After all, the ASX 200 is supposed to represent the largest 200 companies listed on the Australian share market.

And with a market cap of $1.53 billion, Droneshield is now well within that range.

On the surface, it does look like Droneshield’s ASX 200 inclusion is well overdue.

This company is now double the size of some of the ASX 200’s smallest constituents. Take Strike Energy Ltd (ASX: STX). Strike shares only joined the ASX 200 in February of this year, replacing the now-taken-over Costa Group Holdings Ltd.  But today, Strike has a market capitalisation of just $643.7 million – less than half of Droneshield.

Another stock currently in the bottom realms of the ASX is Nanosonics Ltd (ASX: NAN). Nanosonics currently commands a market cap of $884.75 million. Yet it too finds itself in the ASX 200, whereas Droneshield shares do not.

So what’s going on here?

Why aren’t Droneshield shares in the ASX 200?

Well, the ASX 200 Index is a little more complicated than what investors might naturally assume. It is not simply a collection of the largest 200 shares on the Australian market. S&P Global, the company that manages most of the ASX’s indexes, lists several criteria for ASX 200 inclusion, of which market capitalisation is just one.

And even though a company’s market cap is an important factor, S&P Global doesn’t just automatically include a share when it reaches a certain market cap milestone in its next quarterly rebalancing.

Here’s what S&P Global says on that:

…the market capitalization criterion for stock inclusion is based upon the daily average market capitalization of a security over the last six months.

The ASX stock price history (last six months, adjusted for price- adjusting corporate actions), latest available shares on issue, and the Investable Weight Factor (IWF) are the relevant variables for the calculation.

Today, Droneshield’s market cap is 440% higher than it was six months ago, which is one possible reason it hasn’t yet found itself in the ASX 200 Index.

S&P Global also uses liquidity as a test for ASX 200 inclusion. And Droneshield is now a very liquid stock by ASX standards, with more than 10 million shares traded so far this Friday. So it’s likely that Droneshield’s liquidity isn’t a factor here.

But S&P Global also uses another selection criterion for ASX 200 inclusion which might explain Droneshield’s absence in the index:

In order to limit the level of index turnover, eligible non-constituent securities will generally only
be considered for index inclusion once a current constituent stock is excluded due to a sufficiently low rank and/or liquidity, based on the float-adjusted market capitalization.

Remember we discussed Strike Energy’s ASX 200 inclusion? Well, that only happened thanks to Costa Group leaving the index. It looks as though it’s not Droneshield’s attributes that are resulting in its index exclusion today, but the attributes of the other shares on the index.

Next time a share is taken off the ASX boards or fails to meet the index’s market capitalisation and liquidity requirements, it might be Droneshield shares’ best shot at becoming an ASX 200 share. But until that happens, we might not see this company within the index. Watch this space.

The post What will it take for DroneShield shares to enter the ASX 200? appeared first on The Motley Fool Australia.

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• 3 reasons to buy this ASX 200 share like there’s no tomorrow
• 5 ASX All Ords shares that rose 250% to 700% in FY24

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 DroneShield, Nanosonics, and S&P Global. The Motley Fool Australia has positions in and has recommended Nanosonics. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

It has been another busy week for many of 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 right now:

CSL Ltd (ASX: CSL)

According to a note out of Macquarie, its analysts have retained their outperform rating and $330.00 price target on this biotherapeutics company’s shares. The broker has been looking at the US dollar and the impact it could have on CSL. And while it suspects that the greenback could act as an earnings headwind in the near term, it believes it will become a tailwind from FY 2026. Nevertheless, Macquarie doesn’t expect this to stop CSL from delivering double digits earnings growth over the next five years thanks to its plasma business. In light of this, the broker feels that the company’s shares are attractively price at current levels. The CSL share price is trading at $299.81 on Friday afternoon.

Premier Investments Limited (ASX: PMV)

A note out of Bell Potter reveals that its analysts have retained their buy rating and $35.00 price target on this retail conglomerate’s shares. The broker has been looking at the company’s proposed demerger of the Peter Alexander and Smiggle brands and the potential merger with Myer Holdings Ltd (ASX: MYR). It is very positive on both proposals. In respect to the former, the broker sees a lot of value emerging from the potential demerger of Premier Investments’ two key brands. Particularly given that it thinks they are global roll-out worthy. In light of this, Bell Potter notes that the company remains a key preference within the consumer discretionary sector. The Premier Investments share price is fetching $29.59 at the time of writing.

Suncorp Group Ltd (ASX: SUN)

Analysts at Morgan Stanley have retained their overweight rating on this insurance giant’s shares with an improved price target of $20.20. According to the note, the broker believes that Suncorp’s shares are being undervalued by the market. It highlights that they are trading at a material and unjustified discount to rival Insurance Australia Group Ltd (ASX: IAG). Especially given its higher quality earnings and strong car insurance businesses. As a result, the broker suspects that Suncorp’s shares could soon re-rate to higher multiples and close this gap. The Suncorp share price is trading at $16.86 this afternoon.

The post Brokers name 3 ASX shares to buy now appeared first on The Motley Fool Australia.

More reading

• What happened with the CSL share price in FY 2024?
• The best ASX 200 shares to buy when interest rates fall
• Broker upgrades CSL shares to ‘buy’ — could they hit $335?
• Buy this undervalued ASX 200 stock ahead of its demerger
• Australian dividend machines: 3 ASX shares that generate reliable passive income

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

S&P/ASX 200 Index (ASX: XJO) shares rose by 7.83% in FY24 (total returns of 12.1% including dividends).

The ASX 200 rose from a closing value of 7,203.3 points on the last trading day of FY23 to a closing value of 7,767.5 points on the last trading day of FY24.

The index fell from July to October last year before an early Santa Rally in November began amid speculation that interest rates would be cut in 2024 due to falling inflation.

There are 11 market sectors comprising the benchmark index.

Let’s take a look at which ASX 200 share was the top performer in each sector in FY24.

The best ASX 200 market sector shares in FY24

Based on 12-month stock price growth (not including dividends), these were the best ASX shares of each market sector in the last financial year.

Healthcare

Pro Medicus Limited (ASX: PME) shares were not only the healthcare sector’s best performers for price growth but also the top stock of the entire ASX 200 in FY24. 

The company delivered a 118.3% share price gain over the 12 months.

The Pro Medicus share price is $130.13 on Friday, up 0.56%.

Materials

In the materials sector, ASX 200 gold mining stock Red 5 Limited (ASX: RED) delivered 89.5% capital growth in FY24. The company was boosted by a rising gold price.

The ASX 200 gold miner is trading at 37 cents today, up 0.54%.

Energy

In the ASX 200 energy sector, uranium stock Deep Yellow Limited (ASX: DYL) soared by 77.5%.

The ASX 200 energy stock is trading at $1.41 today, down 0.35%.

Industrials

Diversified industrial and investment company Seven Group Holdings Ltd (ASX: SVW) was the No. 1 stock in the ASX 200 industrials sector with 52.9% capital growth in FY24.

The ASX 200 industrials share is trading at $36.05 today, down 4.07%.

Communications

Beep, beep! Car Group Limited (ASX: CAR) zoomed past its peers in the communications sector in FY24, racking up a 48% share price gain.

The ASX 200 communications stock is trading at $33.67 today, down 0.75%.

Technology

Social networking app developer Life360 Inc (ASX: 360) was the No 1. stock in the technology sector in FY24 with an outstanding 115.4% gain.

(Fun fact: The tech sector was the leader of the pack among the 11 sectors in FY24.)

The ASX 200 tech stock is trading at $15.87 today, up 0.063%.

Consumer discretionary

Budget jewellery retailer Lovisa Holdings Ltd (ASX: LOV) led the consumer discretionary stocks in FY24 with a 70.3% share price gain.

The ASX 200 retail stock is trading at $31.38 on Friday, up 1.26%.

Real estate & REITs

Goodman Group (ASX: GMG) soared in FY24 on the back of the artificial intelligence theme. With 73.1% share price growth, Goodman outperformed its real estate sector peers in FY24.

The ASX 200 property share is $35.35 on Friday, down 0.099%.

Consumer Staples

Bega Cheese Ltd (ASX: BGA) was the No. 1 consumer staples stock of the year in FY24. The Bega share price lifted 49.1% over the 12 months.

The ASX 200 consumer staples share is trading at $4.24 today, down 0.7%.

Financials

Diversified financial services company Hub24 Ltd (ASX: HUB) was the best ASX 200 financials stock of FY24, following an 82.9% surge in its share price.

Hub24 shares are trading at $46.67 today, down 0.66%.

Utilities

In the utilities sector, Origin Energy Ltd (ASX: ORG) was the No. 1 stock in FY24, with share price growth of 29.1%.

The ASX 200 utilities share is trading at $10.74 on Friday, up 0.47%.

The post The best ASX 200 share of each market sector in FY24 appeared first on The Motley Fool Australia.

More reading

• What will it take for DroneShield shares to enter the ASX 200?
• Here are the best ASX REITS of FY24 (a $66 billion company grew the most)
• 3 reasons to buy this ASX 200 share like there’s no tomorrow
• Best 3 ASX 200 healthcare shares for price growth in FY24
• 5 things to watch on the ASX 200 on Friday

Motley Fool contributor ass=”yoast-text-mark”>ass=”yoast-text-mark”>ef=”https://www.fool.com.au/author/TMFBronwyn/”>Bronwyn Allen has positions in Goodman Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goodman Group, Hub24, Life360, Lovisa, and Pro Medicus. The Motley Fool Australia has recommended Car Group, Goodman Group, Hub24, Lovisa, and Pro Medicus. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.