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The S&P/ASX 200 Index (ASX: XJO) is having another underwhelming session. In afternoon trade, the benchmark index is down 0.5% to 7,714.2 points.

Four ASX shares that are not letting that hold them back are listed below. Here’s why they are rising:

Arafura Rare Earths Ltd (ASX: ARU)

The Arafura Rare Earths share price is up 4% to 18.7 cents. This may be a delayed reaction to an announcement from the rare earths developer on Monday. Arafura revealed that it has conditionally secured up to US$150 million of debt financing for the Nolans Project from The Export-Import Bank of Korea (KEXIM). Management notes that the KEXIM loan guarantee supports the credit approval process for commercial lenders and brings Arafura closer to its targeted US$775 million senior debt funding required for the Nolans Project.

Ora Banda Mining Ltd (ASX: OBM)

The Ora Banda Mining share price is up 8% to 32.5 cents. This follows the release of an update on its estimates for the Davyhurst Gold Project (DGP) mineral resources and ore reserves. Management advised that the Sand King underground resource has increased 176% to 3.4M tonnes at 2.8g/t for 306k ounces. Whereas the Riverina underground resource has increased 54% to 4.0M tonnes at 3.7g/t for 468k ounce. As for ore reserves, total underground ore reserves have increased 94% to 1.2M tonnes at 3.7g/t for 142k ounces.

Superloop Ltd (ASX: SLC)

The Superloop share price is up 3% to $1.60. Investors have been buying this telco’s shares today following the release of a trading update. Superloop revealed that it has continued to perform strongly in the high value segment of the residential broadband market. So much so, high-speed plans (100Mbps or greater) now exceed 50% of its base. Management believes this trend will continue, driven by consumer demand for higher internet speeds, reliability, and value. As a result, it now expects its FY 2024 underlying EBITDA to be at or above the top end of the $51 million to $53 million guidance range.

Whitehaven Coal Ltd (ASX: WHC)

The Whitehaven Coal share price is up 4% to $8.45. Investors have been buying coal mining shares this week in response to news of a fire burning underground in a major coal mine owned by Anglo American in Queensland. Given that the Grosvenor mine was expected to produce 2.3 million tonnes of metallurgical coal this year, investors appear to believe there could be a meaningful impact to global supply. The fire continues to burn on Tuesday according to reports.

The post Why Arafura Rare Earths, Ora Banda, Superloop, and Whitehaven Coal shares are rising today appeared first on The Motley Fool Australia.

More reading

• 2 ASX All Ords shares smashing new multi-year highs on big news
• How these three ASX gold stocks soared above the rest in FY 2024
• Here are the top 10 ASX 200 shares today
• Why are ASX 200 coal shares smashing the market today?
• Why Arafura Rare Earths, Bigtincan, Evolution Mining, and Galileo Mining shares are dropping

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

The S&P/ASX 200 Index (ASX: XJO) is down 0.41% in early afternoon trade on Tuesday.

The benchmark index has slipped more firmly into the red following on the 11:30am AEST release of the Reserve Bank of Australia’s minutes from its 18 June interest rate policy meeting.

As you’re likely aware, at that meeting the RBA opted to hold the official interest rate steady at 4.35%.

You also probably recall that it was only back in May 2022 that the official Australian cash rate stood at a historic low of 0.10%. That’s when the central bank commenced a rapid tightening policy that saw rates lifted 13 times since then to tamp down runaway inflation.

But with inflation proving sticky in recent months, should ASX 200 investors brace for another rate hike? Or can we look forward to the RBA moving towards easing?

Here’s what today’s minutes reveal.

What the RBA minutes reveal for ASX 200 investors

My biggest takeaway from the RBA minutes is that the bank’s board members are just as uncertain about the shorter-term inflationary path as the rest of us.

Which means that traders should remain nimble. Meanwhile, ASX 200 investors with a long-term horizon would do well to ignore the month-to-month uncertainties and hold onto their quality stocks.

The RBA pointed to a mixed picture in its ongoing efforts to bring inflation back within its 2% to 3% target range.

The board noted:

Relative to expectations, growth in overall household and public consumption in the March quarter had been stronger than expected while other components had surprised on the downside.

The members said that while energy rebates and rent assistance would lower headline inflation in 2024, the direct effect would be reversed later in 2025.

And the Aussie labour market remained tight relative to full employment, though conditions had continued to ease gradually in recent months.

On that uncertainty front, the board noted, “It was too early to determine if this signalled a more rapid easing in aggregate wages growth than currently expected.”

As for ASX 200 investors potentially facing higher interest rates, the RBA noted, “Inflation remained above the target range and had been a little higher than expected in prior months.”

But the board is still awaiting more data.

“Members acknowledged that these (limited) inflation data had increased the risk that sustainable progress towards the inflation target may be slower than forecast,” the members said.

And the RBA made it clear that the door is wide open for more interest rate hikes if required.

According to the minutes:

Several measures of inflation expectations had drifted up in recent years to be around the midpoint of the target band, after having been below target during the low-inflation period prior to the pandemic.

Members acknowledged that if inflation expectations were to rise materially from current levels, it could require significantly higher interest rates to bring inflation back to target, with adverse implications for growth in output and employment.

With the data on hand, the RBA still believes inflation will likely return to its target by 2026 “despite some elevated upside risk around the forecast”.

The RBA offered its usual caveat that it “will do what is necessary” to bring inflation back to target.

But ASX 200 investors will have to wait for the next batch of inflation data to see if boosting the cash rate is necessary again.

According to the RBA, “The extent of uncertainty at present meant it was difficult either to rule in or rule out future changes in the cash rate target.”

The post What the RBA minutes imply for the ASX 200 and higher interest rates appeared first on The Motley Fool Australia.

More reading

• How ASX shares vs. property performed in June
• Here are the top 10 ASX 200 shares today
• Leaders and laggards of the ASX market sectors in FY24
• 5 things to watch on the ASX 200 on Monday
• Here’s how the ASX 200 market sectors stacked up last week

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

Ansell Ltd (ASX: ANN) shares are in focus today after the company announced it finalised a major acquisition.

The purchase was made for all of the assets in US-listed entity Kimberly-Clark Corporation (NYSE: KMB)’s personal protective equipment (PPE) business – a deal Ansell initially announced on 8 April 2024.

Despite the completion of this major acquisition, Ansell shares remain steady at $25.90 per share at the time of writing, flat with the previous close of $25.91 apiece. Here’s a closer look.

Ansell shares on radar after transaction

Kimberly-Clark is a US consumer goods giant, holding over 175 brands under its banner. Many are household names – Kleenex tissues and Huggies diapers are two examples.

It has a market capitalisation of US$47.8 billion at the time of writing.

The rationale behind the deal was to expand Ansell’s product portfolio and market position. The $970 million transaction will see it acquire brands like Kimtech and KleenGuard – both used for anti-contamination against bacteria and viruses.

It also includes several manufacturing assets used in the production of gloves, masks, apparel, and eyewear.

Financial implications

The deal was finalised today after Ansell secured long-term debt financing to settle the balance.

It raised US$377 million via the United States Private Placement (USPP) market. The other portion of the deal was funded through a fully underwritten institutional placement of approximately 17.8 million new Ansell shares on 8 April, where it raised $400 million at $22.45 per share.

Since that date, these investors have made a 15% return on their money as I write.

The new debt facility announced today will replace previous instruments Ansell was using to fund its growth. As such, management noted this should provide Ansell with financial stability going into FY 2025:

The USPP proceeds replace the previously announced fully committed bridge facility which will no longer need to be drawn, with maturities on the notes issued ranging from 5 to 12 years and providing Ansell with long term funding certainty going into FY25.

Outlook for Ansell shares

Despite the size and potential impact of the acquisition, Ansell shares have not seen immediate movement in early trade on Tuesday.

Investors might be taking a wait-and-see approach, considering the complexities and integration efforts associated with such a significant purchase.

But analysts appear to be optimistic about the deal’s long-term benefits. According to CommSec, Anshell shares are rated as a moderate buy, with 6 buy and 6 hold recommendations, respectively.

Ansell’s management also expects the acquisition to be beneficial. It expects revenues and earnings per share (EPS) to grow directly as a result of the move. We will just have to wait and see if this is positive for Ansell shares or not.

The company’s full-year results for FY 2024 are set to be released on 20 August, per the announcement.

In the last 12 months, Ansell shares have slipped over 4.5% into the red. This year to date, the stock has lifted into the green following a 6% return in the past month of trade.

The post Why are Ansell shares on investors’ radars today? appeared first on The Motley Fool Australia.

More reading

• How ASX shares vs. property performed in June
• 2 ASX All Ords shares smashing new multi-year highs on big news
• These 2 ASX 200 stocks just scored substantial broker upgrades
• Why is the RPM Global share price crashing 22% today?
• Can ASX 200 tech shares produce another strong performance in FY25?

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

Comparing shares vs. property in the final month of FY24, we saw ASX 200 shares outperform bricks and mortar in terms of asset price appreciation.

The S&P/ASX 200 Index (ASX: XJO) rose 0.85% in June. Meantime, the national median home value rose by 0.7%, according to CoreLogic data.

That was the 17th consecutive month of growth for the national median price.

The median house price rose 0.5%, and the median apartment price lifted 0.7% over the month. On the share market, some stocks outperformed by a mile, including an ASX energy share that skyrocketed 40%.

CoreLogic research director Tim Lawless said the national median had lifted between 0.5% and 0.8% every month since February.

Lawless commented:

The persistent growth comes despite an array of downside risks including high rates, cost of living pressures, affordability challenges and tight credit policy.

The housing market resilience comes back to tight supply levels which are keeping upwards pressure on values.

Last month, we saw the same growth patterns and the same dominant markets as we saw in May.

Perth, Adelaide, and Brisbane delivered the highest home value growth. Home price medians rose in June at 2%, 1.7%, and 2%, respectively.

Among the regional markets, regional Western Australia led the pack with 1.5% growth. Regional South Australia followed with 1.1% growth, then regional Queensland with 1%.

Shares vs. property price growth in June

Here’s how shares vs. property performed in terms of house price and share price gains last month.

Property market	Median house price	Price growth	12-month price growth
Sydney	$1,466,475	0.5%	6.8%
Melbourne	$948,879	-0.3%	1.2%
Brisbane	$953,028	1.1%	15.2%
Adelaide	$824,669	16%	15.1%
Perth	$791,926	2%	23.7%
Hobart	$691,339	-0.2%	-0.3%
Darwin	$589,166	0.6%	3.1%
Canberra	$986,414	0.5%	3.2%
Regional New South Wales	$763,364	0.3%	4%
Regional Victoria	$596,580	-0.3%	-0.4%
Regional Queensland	$644,987	1.1%	12.3%
Regional South Australia	$437,854	1.2%	11.4%
Regional Western Australia	$532,116	1.6%	16.9%
Regional Tasmania	$537,285	0.7%	0.2%
Regional Northern Territory	$442,837	-0.5%	-2.9%

Top 5 risers of the ASX 200 last month

The ASX 200 lifted 0.85% in June.

According to CommSec data, these 5 ASX 200 shares were the top-performing stocks.

ASX 200 share	Share price growth
Strike Energy Ltd (ASX: STX)	40%
Bapcor Ltd (ASX: BAP)	21%
Pro Medicus Limited (ASX: PME)	19.3%
Healius Ltd (ASX: HLS)	18%
Insurance Australia Group Ltd (ASX: IAG)	15.2%

Why did Strike Energy shares spark 40% higher?

Strike Energy released seven price-sensitive announcements in June.

Based on share price gains, the updates that most excited Strike Energy investors included a flow test update regarding the Walyering-7 well in the Perth Basin.

The company advised they’d commenced a production testing program, and moveable gas and condensate had been recovered from the completed zones within the well.

Investors also liked the news of a five-year $153 million development financing package.

The post How ASX shares vs. property performed in June appeared first on The Motley Fool Australia.

More reading

• Here’s a recap on IAG shares in FY24 – and their FY25 outlook
• Here are the top 10 ASX 200 shares today
• Why Guzman Y Gomez, MacMahon, Strike Energy, and WiseTech shares are sinking
• Leaders and laggards of the ASX market sectors in FY24
• These are the 10 most shorted ASX shares

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

The ASX All Ordinaries index may be having a subdued session, but that hasn’t stopped two shares from scaling new heights.

Here’s why these shares are rising today:

Altium Ltd (ASX: ALU)

The Altium share price has hit a new record high of $68.20 on Tuesday.

Investors have been buying the electronic design software company’s shares after its takeover by Japan’s Renesas took another big step towards completion.

The ASX All Ords share advised that the Committee on Foreign Investment in the United States (CFIUS) has approved the deal after concluding that there are no unresolved national security concerns with respect to the transaction.

This approval by CFIUS was the last outstanding regulatory authorisation required to complete the transaction. Shareholders will now vote on the deal at a meeting on 12 July. If everything goes to plan, the $68.50 per share takeover will complete on 1 August.

Superloop Ltd (ASX: SLC)

The Superloop share price has hit a multi-year high of $1.65.

The catalyst for this has been the release of a trading update from the telco this morning.

Superloop advised that it has continued to perform very strongly in the high value segment of the residential broadband market. It notes that its high-speed plans (100Mbps or greater) now exceed 50% of its base.

The good news is that it expects this trend to continue, driven by consumer demand for higher internet speeds, reliability, and value.

In light of its strong performance, management expects its underlying EBITDA for FY 2024 to be at or above the top end of the $51 million to $53 million guidance range.

It also advised that FY 2024 cash capex remains on track for the $25 million to $27 million range previously guided. This includes $5 million in additional capex associated with the recent Origin Energy Ltd (ASX: ORG) and AGL Energy Limited (ASX: AGL) contract wins, together with the accelerated customer growth in the Consumer segment.

Speaking of Origin, the energy retailer has reached “go live” with Superloop. This means that from today, Superloop’s white label offering will underpin new sign-ups for Origin home broadband services.

The ASX All Ords share highlights that this milestone has been reached in under four months. It believes the speed of this achievement is testament to the capability of the Superloop platform and the strong collaboration between project teams.

The post 2 ASX All Ords shares smashing new multi-year highs on big news appeared first on The Motley Fool Australia.

More reading

• Leaders and laggards of the ASX market sectors in FY24
• Here’s how the ASX 200 market sectors stacked up last week
• The best three ASX 200 shares to buy and hold in FY 2024 revealed
• 9 ASX 200 shares finishing FY24 on a 52-week high
• 5 ASX 300 shares smashing new highs while the market sinks

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 Altium. 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.

Two S&P/ASX 200 Index (ASX: XJO) stocks just scored substantial broker upgrades.

One of the companies has already been on a tear over the past year, while the other has struggled.

But according to top brokers, the next 12 months could see them deliver share price gains of 11% and 16%, respectively. And that doesn’t include the dividends they both pay.

Which ASX 200 stocks are we talking about?

Read on!

(Broker data courtesy of The Australian.)

Two ASX 200 stocks to buy

The first ASX 200 stock just earning a broker upgrade is financial technology company Hub24 Ltd (ASX: HUB).

The Hub24 share price is down 0.2% in late morning trade today, at $45.98. Shares are up a whopping 76% in a year, making it the third-best-performing ASX 200 share in FY 2024. Hub24 shares also trade on a fully franked trailing dividend yield of 0.8%.

Despite the recent share price surge, Bell Potter foresees more outperformance ahead. The broker gave the ASX 200 stock a buy rating with a $53.20 price target. That’s almost 16% above current levels.

At its most recent half-year results, Hub24 reported a 14% year on year increase in total revenue, which came in at $156.7 million for the six months.

Which brings us to the second ASX 200 stock that just scored a broker upgrade, property and infrastructure group Lendlease Group (ASX: LLC).

The Lendlease share price is up 0.9% today at $5.68 a share. Lendlease shares are down 28% in a year. The stock also trades on a partly franked trailing dividend yield of 3.1%.

Citi believes that the sell-off has run its course. The broker raised Lendlease to a buy rating, while maintaining its $6.30 price target. That represents an 11% potential upside from the current share price.

Citi is upbeat about Lendlease’s ongoing international asset sales, expected to bring in some $4.5 billion.

The broker said this week’s AU$480 million (US$320 million) sale of the ASX 200 stock’s US Military Housing business came in ahead of expectations.

According to Citi analyst Suraj Nebhani (quoted by The Australian):

While there is uncertainty around the future capital receipts from Lendlease’s asset sale program, we see the shares as sufficiently discounted here and providing strong value upside.

Moreover, the progress on asset sales and capital received to date has been encouraging, and we therefore see upside to Lendlease shares from current pricing.

The post These 2 ASX 200 stocks just scored substantial broker upgrades appeared first on The Motley Fool Australia.

More reading

• Brokers just put buy ratings on these ASX 200 tech stocks
• 5 things to watch on the ASX 200 on Tuesday
• Here are the top 10 ASX 200 shares today
• Why Coronado Global, EML, Immutep, and Lendlease shares are storming higher
• Guess which ASX 200 share is pushing higher on $480m asset sale

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Hub24. The Motley Fool Australia has recommended Hub24. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The RPMGlobal Holdings Ltd (ASX: RUL) share price is having a difficult time on Tuesday.

In early trade, the mining software solutions provider’s shares were down as much as 22% to $2.17.

Its shares have recovered a touch since then but remain down 16% to $2.33.

Why is the RPM Global share price crashing?

Investors have been hitting the sell button today after the company released a trading update.

According to the release, RPM Global sold $50.4 million in software Total Contracted Value (TCV) in the second half of FY 2024. This brings its expected full year TCV to $77 million, which represents a 9.2% increase year on year.

This TCV comprises $75.4 million in subscription licenses (FY 2023: $65.8 million), $1.3 million in perpetual licenses (FY 2023: $2.9 million), and new maintenance of $0.3 million (FY 2023: $1.8 million).

Management notes that the $75.4 million in TCV software subscription sales will deliver annually recurring revenue (ARR) of $9.2 million. As of 1 July, the total value of ARR is $62 million, comprising $50.7 million from subscriptions and $11.3 million from maintenance.

It also highlights that as its software becomes more and more mission critical, mining companies are asking for longer subscription terms to ensure certainty of supply. For example, in the second half of FY 2024, the company sold $18.4 million in software subscriptions with a committed term of eight years and $6.4 million with a committed term of ten years.

Given how the above reads very positively, investors may be wondering why the RPM Global share price is sinking today.

Well, this appears to have been driven by softer than expected profitability during the year.

Softer profits

The release reveals that gross revenue for FY 2024 is expected to finish between $113 million and $114 million. This is up from $98.4 million in FY 2023.

EBITDA (before management incentives) is expected to be in the range of $18.7 million to $19.3 million, which is up from $15 million last year.

And finally, profit before tax (pre management incentives) is forecast to be in the range of $14 million to $14.5 million. This is up 52% to 58% year on year from $9.2 million.

This was lower than forecast, which is weighing on the company’s shares today. Management commented:

The lower than forecasted profitability is due to reduced perpetual license sales and the timing of subscription licenses signed during the second half of FY2024.

It is also worth noting that not all of these profits will be retained, with the company intending to reward its employees handsomely. It advised:

Given the growth in TCV, revenue and profitability in FY2024, the Company expects incentives (shared across an increased number of employees) to be in the range of $3.5 million to $3.9 million for the FY2024 year (FY2023: $3.0 million).

Despite today’s weakness, the RPM Global share price remains up over 60% since this time last year.

The post Why is the RPM Global share price crashing 22% today? appeared first on The Motley Fool Australia.

More reading

• These 2 ASX 200 stocks just scored substantial broker upgrades
• Can ASX 200 tech shares produce another strong performance in FY25?
• 3 ASX small-cap shares I think have explosive growth potential
• Why are Liontown shares in a trading halt today?
• Can Nvidia stock cross $1,000 again after the stock split?

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 RPMGlobal. The Motley Fool Australia has recommended RPMGlobal. 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) tech shares delivered strong returns in FY24. There are multiple quality names within the ASX 200 that have created value for shareholders.

Some of the biggest names in the tech sector include Wisetech Global Ltd (ASX: WTC), REA Group Ltd (ASX: REA), Xero Ltd (ASX: XRO), CAR Group Limited (ASX: CAR), SEEK Ltd (ASX: SEK) and TechnologyOne Ltd (ASX: TNE).

The performance of each individual company’s operational growth and financials will obviously have an impact on how the share prices of the ASX 200 tech shares track in FY25. Aside from that, I think there could be two (foreseeable) important factors.

Interest rates

Interest rates usually greatly impact valuations because if investors can get a good return from safe assets like bank accounts and bonds, then ‘risk’ assets like shares should be priced at a lower level. For example, high interest rates, in theory, should mean a lower price/earnings (P/E) ratio than if interest rates were lower.

One of the world’s greatest investors, Warren Buffett, once said:

The value of every business, the value of a farm, the value of an apartment house, the value of any economic asset, is 100% sensitive to interest rates because all you are doing in investing is transferring some money to somebody now in exchange for what you expect the stream of money to be, to come in over a period of time, and the higher interest rates are the less that present value is going to be. So every business by its nature…its intrinsic valuation is 100% sensitive to interest rates.

Some investors may have already ‘priced in’ interest rate cuts from the US Federal Reserve or the Reserve Bank of Australia (RBA) which is likely partly why we saw such a strong rally of ASX 200 tech shares during FY24.

Based on Australia’s latest inflation numbers and RBA commentary, it could be a while yet before there’s a rate cut.

Valuations too high?

Interestingly, some high-profile, high-performing investors have started reducing their exposure to technology.

The Australian Financial Review recently reported that fund manager GQG Partners Inc (ASX: GQG) has made some “aggressive moves” to produce the next stage of strong returns (in FY25).

The newspaper reported that tech stocks were a major factor in GQG’s recent investment fund performance. However, in the last few months, the fund has reduced its exposure to the tech sector by more than half – from 43% in the portfolio to 21%. This decision was made because it seemed that the significant market interest in AI stocks was not spreading to other sectors as widely as expected.

GQG’s Brian Kersmanc said:

From the semiconductor standpoint, things weren’t broadening out as much –
spending was really isolated to that cluster around AI and data centres.

Markets also started pricing in some really blue sky scenarios for these stocks, so
although optically they looked cheap on a price-to-earnings basis, to get to the
estimates that were prevailing in the market, you had to get to some pretty
aggressive assumptions.

The last time GQG significantly cut its tech exposure was when it rotated into energy stocks, according to the AFR. After that, the NASDAQ plunged 33%, and commodity prices soared after Russia invaded Ukraine. The ASX 200 tech shares also had a bad time in 2022.

It’s an interesting sign that GQG has decided to take profits from its tech exposure. Even if tech stocks don’t crash in FY25, this could suggest that the ASX 200 tech shares may not see the same level of returns in FY25 as FY24 because we’ve already seen the expansion of their valuations (such as the P/E ratios).

Better-than-expected earnings growth and/or reducing interest rates could be necessary for another good year.

The post Can ASX 200 tech shares produce another strong performance in FY25? appeared first on The Motley Fool Australia.

More reading

• Brokers just put buy ratings on these ASX 200 tech stocks
• 5 things to watch on the ASX 200 on Tuesday
• Leading brokers name 3 ASX shares to buy today
• Why Guzman Y Gomez, MacMahon, Strike Energy, and WiseTech shares are sinking
• Guess which ASX tech share is sinking after $45 million founder sell-down

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 REA Group, Technology One, WiseTech Global, and Xero. The Motley Fool Australia has positions in and has recommended WiseTech Global and Xero. The Motley Fool Australia has recommended Car Group, REA Group, Seek, and Technology One. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Investing in smaller companies, often called small-cap shares, is quite exciting for many investors. These companies, usually valued between $200 million and $2 billion, have a great potential to grow quickly.

What attracts people to ASX small-cap shares is their ability to respond quickly to new opportunities or changes in the market. This agility can lead to rapid growth. However, remember that while the opportunity for big rewards exists, these stocks can also be quite volatile. Investing in them comes with a mix of high hopes and risks.

With that caveat, let’s dive into 3 ASX small-cap shares that I think have promising growth potential.

PWR Holdings (ASX: PWH)

PWR Holdings is a great example of a company using its strong skills in one area to grow into other industries.

Founded in 1997 by Kees Weel, who is still the CEO today, PWR Holdings has become a top player in advanced cooling systems. The company is a global leader in this niche, providing high-performance products for motorsport, automotive, aerospace, and defence industries.

While the company is best known for its motorsports division, the aerospace and defence industry is growing fast.

In 1H FY24, the company reported robust results, as revenue grew by 22.2% to $64.2 billion, and earnings before interest, taxes, depreciation, and amortisation (EBITDA) increased by 27.2% to $18.4 billion. While the motorsport sector’s 19% revenue growth was solid, the real surprise came from the aerospace and defence sector which saw an impressive 124% growth in revenue. The sector represented 12% of the total revenue, up from 7% a year ago.

Over the past decade, PWR Holdings has delivered stable earnings growth, superior profitability, and high return-on-equity ratios.

The PWR Holdings share price closed Monday at $10.94. Its shares are valued at a price-to-earnings (P/E) ratio of 34x on FY25 earnings estimates using S&P Capital IQ.

VEEM Ltd (ASX: VEE)

If there’s a leader in PWR Holding for the global cooling systems market, there’s also VEEM for the global marine precision parts market. VEEM introduced products that aimed to enhance efficiency and safety within its industry.

Founded in 1968, VEEM makes advanced marine technology and engineering parts, servicing both the defence and commercial marine sectors. Over the years, VEEM has established a strong reputation for innovation and quality, positioning itself as a key player in the global marine technology market.

This expertise and market leadership led to two exciting opportunities for VEEM. Several years ago, VEEM launched VEEM gyrostabilisers, an innovative product that replaces traditional propeller-based stabilisation. While the product’s revenue was just $5 million in 1H FY24, it brings a big market potential. Management estimates its total addressable market would be US$1.1 billion for new builds.

The other exciting venture is VEEM’s partnership with Sharrow Engineering. Last year, the two companies announced an exclusive agreement to adapt Sharrow’s design to a wider range of vessels. While it’s still early days, VEEM saw a positive outcome from initial testing and plans to launch this product line throughout FY25.

VEEM is tightly held by insiders, with Managing Director David Miocevich owning over 50% of the company.

The VEEM share price closed Monday at $1.72. According to S&P Capital IQ, its shares are valued at an FY25 P/E ratio of 30x.

Smart Parking Ltd (ASX: SPZ)

Smart Parking is the smallest company of the three, with a market capitalisation of $173 million, which puts it at the border between small-caps and micro-caps.

The company is growing fast by scaling up its operations. This company has presence in Australia, New Zealand, the UK, Germany, and Denmark.

As the name suggests, Smart Parking specialises in smart parking technology, which helps drivers find available parking spaces more easily and efficiently. Its systems include real-time parking information, automated payment options, and advanced monitoring tools. Smart Parking aims to make parking simpler and more convenient for both drivers and parking operators.

The number of parking sites managed by Smart Parking has grown from 250 in June 2017 to 1,219 in December 2023. During this period, revenue rose from $24.8 million in FY17 to 45.2 million in the last 12 months. As it built scale and operational efficiency, EBITDA margins improved from just 4% in FY17 to over 20% in the last 12 months to December 2023.

In terms of total addressable markets, management estimates there are approximately 45,000 sites in the UK, 90,000 sites in Germany, and 10,000 sites in Denmark. That’s a total of 145,000 parking sites, giving a long runway for growth.

The Smart Parking stock closed at $0.48 on Monday, implying a FY25 P/E ratio of 19x, according to S&P Capital IQ.

The post 3 ASX small-cap shares I think have explosive growth potential appeared first on The Motley Fool Australia.

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

Liontown Resources Ltd (ASX: LTR) shares won’t be going anywhere on Tuesday.

That’s because the lithium developer has entered a trading halt this morning.

Why are Liontown shares in a trading halt?

Liontown requested the trading halt as it prepares to make an announcement relating to the funding of the Kathleen Valley Lithium Project in Western Australia. Its request states:

The trading halt is requested pending an announcement by the Company in connection with funding arrangements. Liontown considers that the trading halt is necessary to ensure the Company can manage its continuous disclosure obligations.

As things stand, Liontown’s shares are expected to be offline until the commencement of trading on Thursday 4 July.

What is happening?

It remains unclear what its funding arrangements involve. But shareholders certainly will be hoping that it includes debt and not equity.

As covered here, Liontown shares were the worst performers on the ASX 200 index in the last financial year. During the 12 months, the lithium developer’s shares lost approximately 70% of their value. So, this really would not be a good time to raise money and dilute its shareholders materially.

But debt financing is easier said than done. Earlier this year, Liontown warned that weak lithium prices were causing issues when it came to financing the Kathleen Valley Lithium Project.

However, it then entered into a A$550 million debt facility agreement in March with a syndicate of lenders. This includes Commonwealth Bank of Australia (ASX: CBA), National Australia Bank Ltd (ASX: NAB), and Export Finance Australia.

The company didn’t expect to need to draw down on the debt facility until early in third quarter of 2024 (i.e. now). However, before then, there were remaining conditions that needed to be satisfied.

And as we have had no update since this announcement about the conditions being satisfied, it seems probable that this trading halt relates to this facility. These conditions include:

[D]emonstrating compliance with customary tests; providing a Base Case Financial Model (BCFM) based off, amongst other things, independent price forecasts and management forecasts of production, capital and operating costs, and which demonstrates compliance with financial ratios; and, entry into key project tripartite agreements.

Since the agreement was signed, lithium prices have continued to weaken. Furthermore, analysts are now predicting that prices remain at these levels for the foreseeable future. It will be interesting to see how this impacts its BCFM and thus its eligibility for the debt facility.

All being well, everything will be running smoothly and this is just a routine halt. We will find out if that is the case later this week when Liontown shares return to trade.

The post Why are Liontown shares in a trading halt today? appeared first on The Motley Fool Australia.

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