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We would all love to retire with a $1 million nest egg. That would be more than enough to fund a comfortable retirement, at least according to the Association of Superannuation Funds of Australia (ASFA).

But sadly, most Australians today don’t have enough in superannuation to make this happen on its own. As such, the best way we can hope to get to a seven-figure nest egg by the time we reach retirement age is by investing in ASX shares outside superannuation.

So today, let’s talk about three ASX hacks you can use to hopefully get to a retirement nest egg of $1 million one day by investing in the share market.

3 ASX hacks to help get to a $1 million nest egg

Put your investing on autopilot

I think the best way to invest in ASX shares, particularly for someone who doesn’t get a thrill out of the whole process, is to automate your investing. Make a commitment to yourself to invest $100, $200 or $500 a month (or whatever you can afford) into your nest egg, and stick to it as best you can. Rain, hail or shine.

Most investors get hamstrung from time to time by thinking that, for whatever reason, the present isn’t a good time to invest. You might be expecting a stock market crash, or have read some professional investors’ predictions of an economic slowdown.

You want to avoid all of that. So make a plan and stick to it as closely as you can. Hopefully, you can even forget you’re doing it. By the time five, ten or 20 years go by, you’ll almost certainly notice some real changes to your wealth if you do so.

Reinvest your earnings and dividends

Investing in ASX shares pays dividends. Literally. Chances are that if you own ASX shares, you’ll regularly receive dividend payments. This passive income is one of the best and most obvious benefits of owning shares.

But many people treat this income as disposable and simply add it to their everyday bank accounts, where it is quickly frittered away.

This would be a big mistake. Dividends form a huge component of the overall returns we enjoy from our share market. So siphoning these away from your portfolio is kneecapping the wealth-building effects you might otherwise enjoy from investing.

As such, if you’re looking to build wealth as efficiently and effectively as possible, make sure you are always reinvesting your dividends back into ASX shares. That way, you’ll receive even higher levels of income next dividend payday, kickstarting a virtuous cycle.

You can turbocharge this ASX hack further by investing any windfall earnings you might receive. These could be a tax return or an insurance payout. Any spare cash you can direct into your ASX portfolio brings that $1 million nest egg closer.

ASX hack: Keep your investing simple

Finally, and perhaps most importantly, I think almost every ASX investor who is aiming to build a $1 million nest egg through the stock market needs to keep their investing simple.

The worst thing an investor can do is get ahead of themselves and invest in the wrong stocks. Nothing is more demoralising than losing all your money on a couple of bad stock picks and having to start all over again from square one.

If you have a passion for investing and picking undervalued stocks, then, by all means, go for it. But if you’re a ‘check your portfolio once a month’ kind of investor, it might be better to stick with simple, hands-off investments like index funds.

An index fund like the iShares Core S&P/ASX 200 ETF (ASX: IOZ) or even a listed investment company (LIC) like Argo Investments Ltd (ASX: ARG) are great choices for hands-off investors. They basically do the hard yards of investing for you and are perfect for putting your regular investments on autopilot.

The post 3 ASX hacks to build a $1 million retirement nest egg appeared first on The Motley Fool Australia.

More reading

• 3 lower-risk ASX shares for beginner investors
• How I’d try to turn an empty portfolio into $300k by buying cheap ASX shares, starting now

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.

Fortunately for income investors, the Australian share market is one of the most generous in the world when it comes to dividends.

Year in, year out, countless ASX listed companies share a portion of their profits with their lucky shareholders.

But with so much choice, it can be hard to decide which ones to buy above others.

With that in mind, let’s take a look at three ASX dividend stocks that analysts think could be quality options for investors right now and are forecast to offer dividend yields of 5% to 7%. They are as follows:

Accent Group Ltd (ASX: AX1)

Bell Potter continues to see a lot of value in this ASX dividend stock. Accent is a footwear-focused retailer and the owner of a large number of store brands such as HypeDC, Stylerunner, and The Athlete’s Foot.

The broker currently has a buy rating and $2.50 price target on its shares.

As for income, Bell Potter is forecasting fully franked dividends per share of 13 cents in FY 2024 and then 14.6 cents in FY 2025. Based on the latest Accent share price of $1.98, this represents dividend yields of 6.5% and 7.4%, respectively.

Dexus Industria REIT (ASX: DXI)

Over at Morgans, its analysts believe that Dexus Industria could be an ASX dividend stock to buy. It is a real estate investment trust that invests in high quality industrial warehouses across Sydney, Melbourne, Brisbane, Perth and Adelaide.

Morgans currently has an add rating and $3.20 price target on its shares.

In respect to that all-important income, the broker is expecting dividends per share of 16.4 cents in FY 2024 and then 16.6 cents in FY 2025. Based on the current Dexus Industria share price of $2.84, this will mean dividend yields of 5.75% and 5.85%, respectively.

Transurban Group (ASX: TCL)

The team at Citi thinks toll road operator Transurban could an ASX dividend stock to buy right now. The broker currently has a buy rating and $15.50 price target on its shares.

Citi believes the company is positioned to provide investors with attractive dividend yields in the coming years thanks to its positive exposure to inflation.

The broker is forecasting dividends per share of 63.6 cents this year and then 65.1 cents in FY 2025. Based on the current Transurban share price of $12.32, this will mean yields of 5.15% and 5.3%, respectively.

The post 3 ASX dividend stocks to buy with 5% to 7% yields appeared first on The Motley Fool Australia.

More reading

• Why APA Group, Immutep, NAB, and Immutep shares are sinking
• 2 of the top dividend shares in Australia
• 3 ASX dividend shares to buy with 6%+ yields
• ASX passive income: Earn $1000/month
• Brokers name 3 ASX dividend shares to buy

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

On Thursday, the S&P/ASX 200 Index (ASX: XJO) was out of form and dropped into the red. The benchmark index finished 0.3% lower at 7,759.6 points.

Will the market be able to bounce back from this on Friday and end the week on a high? Here are five things to watch:

ASX 200 to rebound

The Australian share market looks set to end the week on a positive note following a decent session on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open 26 points or 0.35% higher this morning. On Wall Street, the Dow Jones was up 0.1%, the S&P 500 rose 0.1%, and the NASDAQ was 0.3% higher.

Oil prices charge higher

It looks like ASX 200 energy shares Beach Energy Ltd (ASX: BPT) and Karoon Energy Ltd (ASX: KAR) could have a good finish to the week after oil prices charged higher overnight. According to Bloomberg, the WTI crude oil price is up 1.2% to US$81.89 a barrel and the Brent crude oil price is up 1.4% to US$86.47 a barrel. Increasing tensions between Israel and Lebanon offset soft US demand.

Buy Lynas shares

The Lynas Rare Earths Ltd (ASX: LYC) share price could be undervalued according to analysts at Bell Potter. In response to news that the miner is planning to produce heavy rare earth elements dysprosium (Dy) and terbium (Tb), the broker has reaffirmed its buy rating with an improved price target of $7.80. It said: “This additional product suite should provide a value uplift to pricing as LYC captures greater margin from the higher value Dy+Tb products.”

Gold price rises

ASX 200 gold shares Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) could have a solid finish to the week after the gold price charged higher overnight. According to CNBC, the spot gold price is up 1% to US$2,337.3 an ounce. A weaker US dollar gave the precious metal a lift.

Arcadium Lithium rated neutral

Arcadium Lithium (ASX: LTM) shares have been given a neutral rating by analysts at Goldman Sachs. However, its analysts have initiated coverage with a price target of $6.50, which implies potential upside of 25% for investors. It said: “With global optionality and strong production growth on the largest lithium resource base among our coverage, Arcadium is well positioned longer-term, though we see risk to projects on execution and cashflow, on our lithium price outlook, and to consensus expectations. We initiate at Neutral with 12m PTs of US$4.30/sh & A$6.50/sh on ALTM & LTM.AX, representing ~20-30% TSR.”

The post 5 things to watch on the ASX 200 on Friday appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• Macquarie names 6 ASX shares to buy in July after tax-loss selling
• Why Arcadium Lithium, Baby Bunting, Cettire, and Qualitas shares are racing higher
• 4 ASX mining shares going gangbusters while the market dives
• Should ASX 200 investors brace for another RBA interest rate hike?

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.

Despite the past month’s sharp retrace, ASX uranium shares have been on fire over the past year.

Here’s what I mean.

Over the past 12 months the All Ordinaries Index (ASX: XAO) is up a solid 9%.

Now, here’s how these five leading ASX uranium shares have performed over this same time:

• Paladin Energy Ltd (ASX: PDN) shares are up 77%
• Bannerman Energy Ltd (ASX: BMN) shares are up 131%
• Deep Yellow Limited (ASX: DYL) shares are up 81%
• Boss Energy Ltd (ASX: BOE) shares are up 27%
• Alligator Energy Ltd (ASX: AGE) shares are up 49%

Boom!

And these blistering gains come after some big share price falls over the past month, spurred by a 9% retrace in uranium prices.

Here’s how these five ASX uranium shares have performed since this time last month:

• Paladin shares are down 22%
• Bannerman shares are down 19%
• Deep Yellow shares are down 20%
• Boss Energy shares are down 25%
• Alligator Energy shares are down 19%

Before you break out your tiny violin for shareholders, take another gander at the 12-month gains up top.

Of course, that’s all water under the bridge.

The question now is, what might investors expect from ASX uranium shares in FY 2025?

Can ASX uranium shares burn bright in FY 2025?

Every miner obviously faces its own specific operational issues each year.

Company specific variables include things like the weather in their mining locations, production levels, costs, how they progress with exploration and new project developments.

But the biggest common factor that will impact all ASX uranium shares in FY 2025 is the price they’ll receive for the radioactive metal they dig from the ground.

As you may be aware, uranium prices hit 16-year highs of US$106 a pound in early February. Prices have since retraced to around US$84 per pound today.

While that’s a sizeable fall, it remains well above the US$67 a pound uranium averaged in calendar year 2023. And in 2021, the average price was roughly US$30 a pound.

It’s hard to predict if and when prices will again top US$100 a pound.

But I think with the nuclear renaissance we’re witnessing among many major economies seeking carbon-free baseload power, uranium prices – and ASX uranium shares – are more likely to move higher in FY 2025 than lower.

It takes a long time to bring new mines into production, after all. Meaning global demand growth should continue to outpace supply growth for years yet.

Indeed, according to the World Nuclear Association, global uranium demand is likely to outpace global supply through to 2040.

And whether Australia moves forward with its own nascent nuclear ambitions or not, I believe the ongoing debate is at least likely to see the government move to ease the current restrictive policies on domestic uranium exploration and mining.

That alone could give ASX uranium shares a big boost.

The post Will the blistering rally for ASX uranium shares charge on into FY 2025? appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Thursday
• Guess which ASX uranium stock was just upgraded to a buy rating
• ASX 200 uranium stock tumbles despite significant new production potential
• Why DroneShield, Paladin Energy, Red 5, and Synlait shares are falling
• Paladin Energy shares sink on $1.25b uranium acquisition news

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.

The rate of inflation in Australia continues to be stronger than what the Reserve Bank of Australia (RBA) would like, which may have a negative knock-on effect on ASX shares. The latest monthly reading showed that inflation had accelerated back to 4%, which was stronger than expected.

The RBA’s job is to ensure that inflation stays under control, and recent inflation strength is increasing the risk of another rate rise.

A rate rise would be painful for borrowers and give households with big cash deposits another boost to their income.

What would the impact on ASX shares be? The broker Morgan Stanley has given a warning about which stocks could underperform.

Household-facing ASX shares could face troubles

According to reporting by The Australian, Morgan Stanley suggests that ASX bank shares, ASX retail shares, and ASX housing shares face the potential of underperformance, with the institution predicting an interest rate increase by the RBA in August.

There are numerous banks on the ASX including Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), ANZ Group Holdings Ltd (ASX: ANZ), National Australia Bank Ltd (ASX: NAB), Bendigo and Adelaide Bank Ltd (ASX: BEN) and Bank of Queensland Ltd (ASX: BOQ).

Housing ASX shares could include Mirvac Group (ASX: MGR), Stockland Corporation Ltd (ASX: SGP) and Brickworks Limited (ASX: BKW).

I recently covered the outlook for ASX retail shares in a separate article, though names like Harvey Norman Holdings Limited (ASX: HVN) could certainly come under scrutiny if Australian rates increased.

Morgan Stanley suggested that if the RBA makes another rate hike and also gives ‘hawkish’ commentary, it could mean weakness for the local economy. This could lead to consumers being more thrifty with their money, which could challenge second-half earnings.

The newspaper reported that the broker suggested the market’s optimistic approach to credit quality risks is shown by the valuations that ASX bank shares are currently trading at, and those multiples should be reconsidered. It also said that some indicators for housing activity are continuing “to flash”. The Australian dollar could strengthen if the RBA rate goes up because investors would be able to earn more money in the country.

What stocks would be opportunities?

Morgan Stanley Australia equity strategist Chris Nicol said, according to The Australian:

For much of this year we have seen a consensus bias to want to look through any impact from tighter monetary policy and jump any earnings gaps to the next stage of the cycle.

Should our additional rate hike call become consensus, the potential harder landing that comes with that is not priced into earnings multiples in our view and will pressure Index direction.

In terms of positioning, we retain our model portfolio sector bias of underweight banks, consumer and housing-linked stocks.

Our key overweight sectors are resources, non-bank financials, global healthcare and selected quality growth.

No specific ASX shares were mentioned as opportunities, but global healthcare could include names like Cochlear Ltd (ASX: COH), CSL Ltd (ASX: CSL) and Sonic Healthcare Ltd (ASX: SHL). Non-bank financials may refer to names like Insurance Australia Group Ltd (ASX: IAG) and Challenger Ltd (ASX: CGF) that could benefit from higher interest earnings on their bond investments.

The post Which ASX shares to buy if interest rates rise (and which to avoid) appeared first on The Motley Fool Australia.

More reading

• Why APA Group, Immutep, NAB, and Immutep shares are sinking
• Here’s when CBA and these ASX 200 bank stocks are paying their dividends
• 3 reasons I think the CBA share price may crash!
• 5 ASX 300 shares smashing new highs while the market sinks
• I think this ASX 200 stock is a tremendous bargain today

Motley Fool contributor Tristan Harrison has positions in Brickworks and Sonic Healthcare. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Brickworks, CSL, and Cochlear. The Motley Fool Australia has positions in and has recommended Bendigo And Adelaide Bank, Brickworks, and Harvey Norman. The Motley Fool Australia has recommended CSL, Challenger, Cochlear, and Sonic Healthcare. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Nvidia (NASDAQ: NVDA) has delivered staggering, market-beating gains, but would you believe it hasn’t always been that way? You don’t have to go back far to see when it has struggled — Nvidia stock lost a full 50% of its value in 2022.

Investors who didn’t buy Nvidia stock during that down period might be kicking themselves since those steep losses were immediately followed by the artificial intelligence (AI) craze that has been fueling the stock (and the broad market) for almost two years now. But if that’s you, don’t feel too bad. Very few people understood the changes generative AI would usher in for the world.

If you do own Nvidia stock and have benefited from its incredible gains recently, you should keep in mind there’s real debate about how long its streak can go on. It’s up over 700% since the beginning of 2023, it trades at a high valuation, and the company is facing increasing competition. There’s likely to be significant pullback at some point — here’s how to keep it from upending your portfolio.

Diversification, diversification, diversification

The old adage about not putting all your eggs in one basket is well-known because it’s true. Even if you own shares in one of the best companies on the planet, which Nvidia undoubtedly is, there are no guarantees regarding its future performance. Holding just one stock, or letting it make up an outsized percentage of your portfolio, is a major risk. Even the best of companies can run into all sorts of unforeseen challenges.

With that in mind, putting your investment eggs in different baskets, so to speak, can happen in a few ways. There are layers of diversification, and the more fully diversified your portfolio is across various types of categories, the more protection it will have.

 First, there are different kinds of investments. Beyond the stock market, which includes individual stocks, exchange-traded funds (ETFs), and options, there’s real estate, bonds, cryptocurrencies, and savings accounts, among others.

Even within the stock market, there are different kinds of stocks: growth stocks, value stocks, dividend stocks, blue chips, and other classifications. You can also break stocks down by industry, geography, or market capitalization.

Diversification across these categories can protect you from a downturn in any one asset class, industry, region, etc. A good rule of thumb is to have around 25 to 30 holdings in your stock portfolio, but if that sounds overly complicated, consider a few ETFs. The most popular ones track major indexes like the S&P 500, giving you instant exposure to the hundreds of stocks within the index.

Does it make sense to sell Nvidia stock?

Some long-term investors prefer a “set it and forget it” approach to their holdings. If you buy great stocks and hold through thick and thin, you should be able to generate strong long-term gains. But even these investors need to occasionally review their portfolios to see if any adjustments are necessary to support their investing goals.

And this brings us to the dilemma for Nvidia shareholders. What happens when a stock appreciates in value and accounts for too large a portion of your overall portfolio?

Let’s say you originally allocated 5% of your portfolio to Nvidia, but because the stock has climbed so quickly, it now makes up over 25% of your holdings. This is a case where you might want to sell some Nvidia stock and redistribute those funds to bring your portfolio back into a more risk-ready allocation. It may seem counterintuitive to reduce your exposure to a great company, but such a move can be necessary to bring your portfolio in line with your investing goals.

I’ll give you two recent examples of billionaire investors making high-profile sales of excellent stocks. First, Warren Buffett recently trimmed his stake in Apple by selling an estimated $20 billion of shares in the first quarter. But investors shouldn’t mistake that for any loss of confidence in the company — it still accounts for nearly 43% of Berkshire Hathaway‘s entire portfolio. Meanwhile, Bill Ackman recently sold 10% of his position in Chipotle Mexican Grill. Even with that sale, it remains the largest position in the Pershing Square Capital portfolio at 20%.

Finally, several billionaire investors have recently sold part of their stake in Nvidia, including Citadel Advisors’ Ken Griffin, Millennium Management’s Israel Englander, and Two Sigma’s John Overdeck and David Siegel.

Nvidia’s current momentum won’t last forever. When the pullback eventually comes, it doesn’t have to roil your entire portfolio if you take the steps to diversify your holdings based on your risk tolerance and investing goals.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post One day, Nvidia stock will go down. Here’s how to keep it from hurting your portfolio appeared first on The Motley Fool Australia.

More reading

• Where will Nvidia stock be in 10 years?
• Nvidia is no longer the most valuable company in the world. Here’s what investors need to know
• Where are we in the share market cycle?
• After Nvidia’s 10-for-1 stock split, is it still a buy?
• The AI money flow: Why you can’t afford to miss stocks like Nvidia and this rising ASX 200 tech stock

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Apple, Berkshire Hathaway, Chipotle Mexican Grill, and Nvidia. The Motley Fool Australia has recommended Apple, Berkshire Hathaway, Chipotle Mexican Grill, and Nvidia. Jennifer Saibil 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

• Macquarie names 6 ASX shares to buy in July after tax-loss selling
• Why Arcadium Lithium, Baby Bunting, Cettire, and Qualitas shares are racing higher
• Should you pounce on ResMed shares at around $28?
• 4 ASX mining shares going gangbusters while the market dives
• Should ASX 200 investors brace for another RBA interest rate hike?

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

Real estate shares were in the doldrums today. The property-centric sector dropped 2%, with some ASX 200 property stocks carving more than 5% off their share price amid fears of another interest rate increase.

But there was a glimmer of green among the many downtrodden property shares: PEXA Group Ltd (ASX: PXA). Shares in the electronic property conveyancing platform lifted 2% to $13.90. Although such a move wouldn’t normally be worth celebrating, it’s notable given the day’s bleak backdrop.

The viridescent glow of PEXA coincides with the company’s return from yesterday’s trading halt and a fresh announcement.

Hitting pause on interoperability

This morning, PEXA acknowledged a statement released by the Australian Registrars National Electronic Conveyancing Council (ARNECC). In this release, the ARNECC revealed it was halting work on its interoperability program, with its project team being stood down.

ARNECC’s interoperability program has been in development for around three years. In short, the program was an initiative to enable a more competitive industry for electronic conveyancing by making communication between all electronic lodgement network operators (ELNOs) and banks possible.

The pause in interoperability efforts was attributed to issues outside the reach of the government body, stating:

State and Territory Ministers also noted recent issues that have been raised by the banking industry in relation to the Interoperability Program, and that some of these are beyond the remit of States and Territories to address effectively.

Still, the ARNECC reiterated the desire for more competition and its benefits. However, it conceded that ‘significant challenges’ stand in the way of making further progress. As such, the body has called upon the Commonwealth Government and regulators to assist.

Meanwhile, PEXA said, “We continue to participate constructively with our regulators and industry participants to support and evolve an ecosystem that operates in the best interests of Australian home and property owners.”

What about the competitor to this ASX 200 stock?

Sydney-based Sympli is trying to break the Australian e-settlement monopoly. Hence, the startup would be a major beneficiary in a more open and interoperable digital conveyancing market.

So, it comes as no surprise the competitor had a few remarks of its own today.

Sympli responded to the ARNECC release by saying:

Sympli confirms that we are, and have always been, committed to ensuring our bank processes are supported in interoperability, but we remain extremely disappointed that this same commitment does not appear to be shared by the industry incumbent. Unfounded claims of intellectual property rights over what have been decades-established industry practices are blocking the finalisation of data standards required to deliver the reform – this must be stopped.

The company is calling on further work to make interoperability possible.

PEXA Group, the ASX 200 stock, is up 5.06% over the past year.

The post ASX 200 stock rallies as monopoly remains intact appeared first on The Motley Fool Australia.

More reading

• How ASX shares vs. property performed in May
• Sell in May and go away? Not for these top 3 ASX 200 stocks!
• These were the best performing ASX 200 shares in May 2024

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended PEXA 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.

Do you have a higher than average tolerance for risk? If you do, then it could be worth checking out the small cap ASX stock in this article.

That’s because analysts at Bell Potter have just initiated coverage on its shares with a buy rating and are tipping huge returns.

Which small cap ASX stock?

The small cap that Bell Potter has named as a buy is Biome Australia Ltd (ASX: BIO).

It develops, licenses, commercialises and markets innovative, evidence-based live biotherapeutics (probiotics) and complementary medicines. The company notes that many of these are supported by clinical research.

At the last count, Biome Australia was marketing 18 products under the Activated Probiotics brand.

According to the note, Bell Potter believes the small cap ASX stock is well-placed to grow materially in the coming years. It commented:

We have strong conviction in the potential of BIO to grow into a material business through a combination of: 1) differentiation through condition-specific probiotic strains / formulations; 2) more efficient delivery system through microencapsulation and blister packaging; 3) a training and education focused sales model that builds trust, deep customer relationships and brand value; 4) clinical evidence based products that drives credibility and opens up significant potential for co-prescribing of medications; and 5) international expansion to replicate the Australian model.

Bell Potter is expecting this to underpin revenue of $12.7 million in FY 2024, $18,9 million in FY 2025, and then $26.6 million in FY 2026.

As for earnings, a net loss of $2.4 million is expected this year, then profits of $0.3 million in FY 2025 and $3.2 million in FY 2026.

Big returns

Bell Potter has initiated coverage on the small cap ASX stock with a buy rating and 73 cents price target.

Based on its current share price of 50.5 cents, this implies potential upside of approximately 45% for investors over the next 12 months.

Its analysts think that investors should snap up its shares and gain exposure to “BIO’s exciting growth phase.” The broker concludes:

We initiate coverage of BIO with a BUY recommendation and Target Price of $0.73 / sh. BIO provides rare exposure to the global probiotics market that leverages off the theme of preventative health. Investors can gain exposure during BIO’s exciting growth phase as the business moves through breakeven into profitability and positive cash flow. Expansion into the UK and Canada should also drive material improvement in performance.

The post Guess which small cap ASX stock could rise 45% appeared first on The Motley Fool Australia.

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• Here are 3 ASX retirement shares to buy in July
• The iShares S&P 500 ETF (IVV) is slowly becoming a dividend powerhouse. Here’s why
• The Core Lithium share price is down 36% in a month. Time to pounce?
• Macquarie names 6 ASX shares to buy in July after tax-loss selling
• Down 25% in a month: Are Mineral Resources shares dirt cheap?

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.

When you first start out investing, you can invest in fledgling growth stocks and small caps.

That’s because if things don’t go quite to plan, you have plenty of time to recoup your losses.

However, if you’re already in retirement, you cannot really afford to lose money. As a result, it’s arguably best to look beyond growth stocks and focus more on capital preservation and income.

But which ASX retirement shares could be worth considering? Let’s take a look at three that could be top options:

APA Group (ASX: APA)

It’s always good to have defensive shares in your retirement portfolio. Especially those that are able to pay sustainable dividends.

APA Group certainly ticks these boxes. This energy infrastructure company has a long track record of dividend growth. In fact, it is currently on course to increase its dividend for 20 years in a row.

Analysts at Macquarie expect the company to deliver on this. The broker is forecasting dividends of 56 cents per share in FY 2024 and then 57.5 cents per share in FY 2025. Based on the current APA Group share price of $7.95, this equates to 7% and 7.2% dividend yields, respectively.

Macquarie also sees plenty of upside for investors. It has an outperform rating and $9.40 price target on its shares.

Coles Group Ltd (ASX: COL)

Supermarkets are another generator of defensive earnings. As they provide daily essentials, consumers are forced to fill their trolleys each week no matter how much they raise their prices.

Morgans is very positive on the company’s outlook and believes its growth will resume in FY 2025 after a tricky time in FY 2024.

It is expecting this to lead to Coles paying fully franked dividends of 66 cents per share in FY 2024 and then 69 cents per share in FY 2025. Based on the current Coles share price of $17.10, this implies dividend yields of 3.85% and 4%, respectively.

Morgans has an add rating and $18.95 price target on its shares.

Telstra Group Ltd (ASX: TLS)

There are few industries that are more defensive that the telecommunications industry. After all, mobile phones and internet are services that many of us could not go without.

This could make Telstra a great ASX retirement share to buy. Especially given its leadership position in the market.

Goldman Sachs thinks it would be a great option. Its analysts have even highlighted its “low risk earnings (and dividend) growth” as a reason to buy. In addition, the broker is expecting some attractive dividend yields.

It is forecasting fully franked dividends per share of 18 cents in FY 2024 and then 18.5 cents in FY 2025. Based on the current Telstra share price of $3.59, this will mean yields of 5% and 5.15%, respectively.

Goldman has a buy rating and $4.25 price target on its shares.

The post Here are 3 ASX retirement shares to buy in July appeared first on The Motley Fool Australia.

More reading

• Why APA Group, Immutep, NAB, and Immutep shares are sinking
• Coles and these ASX dividend stocks could offer huge returns
• Buy Telstra and these ASX dividend stocks in July
• ASX expert: Time to buy Telstra shares
• For a shot at $1,320 a year in passive income, buy 2,000 shares of this ASX stock

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