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On Monday, the S&P/ASX 200 Index (ASX: XJO) started the week in a disappointing fashion. The benchmark index fell 0.8% to 7,733.7 points.

Will the market be able to bounce back from this on Tuesday? Here are five things to watch:

ASX 200 expected to rebound

The Australian share market is expected to rebound on Tuesday despite a mixed start to the week on Wall Street. According to the latest SPI futures, the ASX 200 is poised to open the day 42 points or 0.55% higher. On Wall Street, the Dow Jones was up 0.7%, but the S&P 500 fell 0.3% and the Nasdaq dropped 1.1%.

Paladin Energy acquisition

The Paladin Energy Ltd (ASX: PDN) share price will be on watch today after the uranium miner announced a major acquisition. Paladin Energy has signed an agreement to acquire Fission Uranium Corp. (TSX: FCU) through an all-scrip deal at 0.1076 shares per Fission share. This values the Canadian uranium miner at C$1.140 billion (A$1.25 billion). The transaction is targeted to close in the September 2024 quarter.

Oil prices storm higher

It could be a good session for ASX 200 energy shares Santos Ltd (ASX: STO) and Karoon Energy Ltd (ASX: KAR) after oil prices stormed higher overnight. According to Bloomberg, the WTI crude oil price is up 1.2% to US$81.68 a barrel and the Brent crude oil price is up 1% to US$86.06 a barrel. Oil prices have been rising thanks to optimism that summer fuel demand will draw down inventories and tighten the market.

Telstra named as a buy

Telstra Group Ltd (ASX: TLS) shares remain good value according to analysts at Bell Potter. This morning, the broker has reaffirmed its buy rating with a trimmed price target of $4.20. The broker believes the telco giant’s shares are undervalued based on the discount they are trading at to other large cap peers. It said: “We view some discount as appropriate but in our view this looks excessive, particularly given the forecast mid to high single digit EPS growth over the next few years, strong market position and the potential for some or all of InfraCo to be sold in the medium term.”

Gold price rises

ASX 200 gold miners Evolution Mining Ltd (ASX: EVN) and Regis Resources Limited (ASX: RRL) could have a good session on Tuesday after the gold price pushed higher overnight. According to CNBC, the spot gold price is up 0.6% to US$2,345.9 an ounce. A softer US dollar boosted the precious metal.

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

More reading

• Here are the top 10 ASX 200 shares today
• Paladin Energy shares on ice as fission-powered acquisition rumours grow
• Buying ASX 200 shares? Here’s why you’ll like NAB’s inflation forecast
• How the ‘nuclear renaissance’ could send ASX uranium stocks like Paladin through the roof
• Would Warren Buffett buy Telstra shares?

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

I’m a big fan of ASX dividend shares that can provide a pleasing level of resilient dividend income.

Dividends are not guaranteed, but some businesses have built up a record of passive income and operate in industries that could enable those pleasing payments to continue.

I’m not going to promote stocks like Commonwealth Bank of Australia (ASX: CBA) or BHP Group Ltd (ASX: BHP) because I don’t believe they are as defensive as some investors may think. Commodity prices can be volatile, while banks heavily depend on the economy’s strength and borrowers’ financial health to keep making good profits. The COVID period saw a CBA dividend cut.

Instead, I’ll tell you about two ASX shares with a commitment to shareholder payouts.

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

Soul Patts is one of the oldest businesses on the ASX. It was listed in 1903 and has paid a dividend every year since then.

I think everyone in their 60s or older should be concerned about dividend stability to ensure passive income keeps flowing even during economic downturns. Soul Patts has grown its annual ordinary dividend every year since 2000, the best record on the ASX.

It’s an investment house that owns stakes in various companies and sectors, including telecommunications, building products, resources, property, swimming schools, agriculture, and more.

I like the diversification that Soul Patts has within its portfolio; it seems like one of the less risky S&P/ASX 200 Index (ASX: XJO) shares to me because it actually owns a large number of different ASX shares.

It currently has a grossed-up dividend yield of 3.9%, which I think is a solid starting point for dividend income.

Charter Hall Long WALE REIT (ASX: CLW)

This is a diversified real estate investment trust (REIT) that typically pays out 100% of its net rental profit each year to investors, creating a strong dividend yield.

The business has blue-chip tenants (such as government and listed businesses) who are signed on long-term rental leases. This gives the business a lot of income visibility and security. In the FY24 first half-year result, the business had a weighted average lease expiry (WALE) of 10.8 years.

Some of its main types of property investments include offices (leased to a government entity), pubs and bottle shops, telecommunication exchanges, service stations, grocery and distribution, food manufacturing, and waste and recycling management.

While interest rates are a headwind for rental profits and some property valuations, Charter Hall Long WALE REIT is benefiting from steady rental increases. Some of the rent is linked to inflation, while other rental contracts have fixed rent increases.

The ASX dividend share is expecting to generate operating earnings per security (EPS) of 26 cents and pay all of that out as a distribution, which translates into a distribution yield of 7.5%.

The post If I were 60 I’d buy these ASX shares for dividends appeared first on The Motley Fool Australia.

More reading

• 9 popular ASX REITs with ex-dividend dates next week
• Should you buy Brickworks or Soul Patts shares today?
• How to invest for retirement in an inflationary environment
• 10 ASX shares that have raised dividends for a decade
• 3 winning tips both Warren Buffett and Peter Lynch recommend

Motley Fool contributor Tristan Harrison has positions in Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The BetaShares Diversified All Growth ETF (ASX: DHHF) could be an effective investment for people who don’t want to worry about having a portfolio full of individual share investments. An all-in-one approach may suit some investors.

The DHHF ETF provides exposure to a diversified portfolio of large, medium, and small businesses from Australia, globally developed and emerging markets.

The ETF has a relatively low annual management cost of just 0.19%, which is quite cheap, considering several other BetaShares’ ETFs have a higher yearly fee than that.

There are two key factors I like about the DHHF ETF. Let’s take a look.

Strong diversification

According to BetaShares, the DHHF ETF provides exposure to around 8,000 shares from around the world.

In terms of investment strategy, these are the four main allocations as of 31 May 2024:

• Australian shares – 36.1%
• US shares – 38.9%
• Developed markets excluding the US – 18.6%
• Emerging market shares – 6.4%

In terms of country allocation, the United States and Australia are obviously the two countries with the largest weighting. After that, Japan has a 4.2% allocation, China and Canada have a respective 1.9% and 1.8% allocation, and the United Kingdom has an allocated 1.7%. Meanwhile, India comes in with a 1.5% allocation, and France and Taiwan have 1.4% and 1.3% allocations, respectively.

The DHHF ETF is fairly evenly weighted between industries thanks to the mixture of US shares and ASX shares. At May 2024, there were six sectors with a weighting of at least 9%: financials (21.1%), IT (14.2%), materials (10.8%), healthcare (10.5%), industrials (10.3%) and consumer discretionary (9.5%).

The allocation to Australian shares has the pleasing effect of boosting the ASX ETF’s underlying dividend yield. At 31 May 2024, the ETF’s underlying yield was 2.6%. Grossed up with franking credits, it was 3%.

Growth potential

Some other all-in-one ASX ETFs, such as the Vanguard Diversified High Growth Index ETF (ASX: VDHG), have a certain weighting to bonds. I think bonds can be a decent investment, but their growth potential is limited.

Investors who want stronger long-term returns may be better served by owning DHHF ETF units.

According to BetaShares, since the ASX ETF’s inception in December 2020, it has delivered an average annual return of 10.5%. Compare that to the VDHG ETF’s net returns — in the last three years, it has returned 6.6% per annum and 9.1% per annum in the last five years.

While we can’t rely on past returns to predict future returns, I believe the DHHF ETF is a useful pick for diversification and, hopefully, a good level of future returns.

The post Want to diversify your portfolio? Try this growth ASX ETF appeared first on The Motley Fool Australia.

More reading

• If I were 60 I’d buy these ASX shares for dividends
• How to invest in US weight loss drug stocks on the ASX
• Over $100 million of GYG shares sold by insiders on day one. Should investors be worried?
• Here are the top 10 ASX 200 shares today
• Bell Potter says these ASX dividend shares are top buys this month

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

Over the past couple of years, you’ve likely heard of the popular weight loss drugs such as Ozempic that are coming out of the United States.

Drugs like Ozempic have taken the world by storm and resulted in massive profits for drug stock makers like Novo Nordisk. As such, it’s only natural for ASX investors to want a slice of the action.

And some significant action there is. According to exchange-traded fund (ETF) provider BetaShares, investment bank Morgan Stanley estimates that the global market for obesity drugs like Ozempic could reach US$77 billion by 2030.

However, the ASX is not exactly known for its pharmaceutical stocks. Sure, we have a few respectable names on our ASX boards. But the real global titans in this space – think the likes of Novo Nordisk, Eli Lilley, Pfizer and Johnson & Johnson – are all international stocks with either primary or secondary listings on the US markets.

Australian investors can always buy these shares directly from the US markets if they want exposure to these companies. But many ASX investors aren’t comfortable with this option.

Luckily, there’s an easy, ASX-based alternative – investing in ASX ETFs.

The ASX is home to hundreds of different exchange-traded funds. A few of these specialise in global healthcare and pharmaceutical companies and would make for an easy way for ASX investors to get a slice of the action.

How to use ASX ETFs to buy US weight loss drug stocks

One such fund is from BetaShares itself – the BetaShares Global Healthcare ETF (ASX: DRUG). This ETF invests in a portfolio of the world’s leading healthcare companies, hedged into Australian dollars to take out the impacts of foreign exchange movements.

DRUG holds around 60 different pharmaceutical and healthcare stocks, mostly listed on the US markets. If you buy DRUG units, you’re top two holdings in the underlying portfolio will be none other than Eli Lilley and Novo Nordisk. Eli Lilley currently makes up 8.5% of DRUG’s weighted portfolio, with Novo Nordisk coming in at 7.1%.

As such, this is a very simple choice for any ASX investors seeking access to these stocks.

But DRUG isn’t the only choice for ASX investors looking for weight loss drug exposure. There’s also the iShares Global Healthcare ETF (ASX: IXJ).

This ETF operates similarly to DRUG in offering a portfolio of the largest global healthcare and pharmaceutical stocks to ASX investors.

IXJ also currently has Eli Lilley and Novo Nordisk as its largest holdings, with portfolio weightings of 9.31% and 5.95%, respectively.

VanEck Global Healthcare Leaders ETF (ASX: HLTH) is another option to consider. It has a slightly different composition, with stocks like Tenet Healthcare and United Therapeutics Corp occupying the top spots. However, Eli Lilley and Novo Nordisk are still there, with portfolio weighting of 2.51% and 2.46%, respectively.

Being sector-specific ETFs, these funds aren’t the cheapest on the ASX. DRUG charges an annual management fee of 0.57%, for example. IXJ asks 0.41% per annum, while HLTH will set you back 0.45% per annum.

But that’s the price you’ll have to pay if you want easy ASX access to US weight loss drugs and their manufacturers on the Australian stock market.

The post How to invest in US weight loss drug stocks on the ASX appeared first on The Motley Fool Australia.

More reading

• Over $100 million of GYG shares sold by insiders on day one. Should investors be worried?
• Here are the top 10 ASX 200 shares today
• Bell Potter says these ASX dividend shares are top buys this month
• Why is this ASX share crashing 60% on Monday?
• Paladin Energy shares on ice as fission-powered acquisition rumours grow

Motley Fool contributor Sebastian Bowen has positions in Johnson & Johnson. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Pfizer. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Johnson & Johnson and Novo Nordisk. 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

• Buying ASX 200 shares? Here’s why you’ll like NAB’s inflation forecast
• Why Cleanaway, IGO, Myer, and Premier Investments shares are pushing higher
• ASX industrial stock rallying amid $110 million acquisition with ‘valuable efficiencies’
• ASX 200 retailer and Myer shares rocket on ‘significant opportunity’ to combine powers
• These are the 10 most shorted ASX shares

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 recommended Aub Group and Premier Investments. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

There are plenty of ASX dividend shares to choose from on the local share market.

But which ones could be in the buy zone right now?

Two that analysts at Bell Potter are very positive on are listed below. Here’s why they are bullish on these names:

Rural Funds Group (ASX: RFF)

The first ASX dividend share that could be a top buy is Rural Funds. It owns a portfolio of high-quality agricultural assets. This includes across industries such as orchards, vineyards, water entitlements, cropping, and cattle farms.

Bell Potter highlights the significant discount that it trades at compared to historical averages and its attractive dividend yield. It said:

RFF trades at a historical high discount to its market NAV per unit ($2.78 pu) at ~28% [now 25.5%]. While we are in general seeing large discounts to NAV in ASX listed farming and water assets to market NAV, the discount that RFF is trading appears excessive and we are seeing a valuable opportunity in RFF. While the timing of that value discount closing is difficult to call, investors are likely to be rewarded with a ~6% yield to hold the position until such a time as the asset class rerates. Furthermore, RFF aims to achieve income growth through productivity improvements, conversion of assets to higher and better use along with rental indexation which is built into all of its contracts with its tenants.

The broker expects dividends per share of 11.7 cents in both FY 2024 and FY 2025. Based on the current Rural Funds share price of $2.07, this will mean yields of 5.85% for investors.

Bell Potter currently has a buy rating and $2.40 price target on its shares.

SRG Global Ltd (ASX: SRG)

Bell Potter says that SRG Global could be an ASX dividend share to buy right now.

It is a diversified industrial services group that provides multidisciplinary construction, maintenance, production drilling and geotechnical services.

The broker believes SRG Global is well-positioned to benefit from increasing construction and mining services activity. It said:

SRG’s short-to-medium term outlook is reinforced by Government-stimulated construction activity in the Infrastructure and Non-Residential sectors and increased development and sustaining capital expenditures in the Resources industry. The resulting expansion in infrastructure bases across these sectors will likely support increased demand for asset care and maintenance in the medium to long-term. We anticipate Mining Services will be a beneficiary of accelerating growth in iron ore and gold production volumes over the next five years.

Bell Potter is forecasting the company to pay shareholders fully franked dividends of 4.7 cents in FY 2024 and then 6.7 cents in FY 2025. Based on its current share price of 84 cents, this will mean dividend yields of 5.6% and 8%, respectively.

It has a buy rating and $1.30 price target on its shares.

The post Bell Potter says these ASX dividend shares are top buys this month appeared first on The Motley Fool Australia.

More reading

• Income booster: Here’s an ASX dividend stock that yields 6% and provides quarterly cash payments
• 9 popular ASX REITs with ex-dividend dates next week
• Buy Telstra and these ASX dividend stocks now
• Analysts name 3 high yield ASX dividend stocks to buy
• Brokers name 3 ASX dividend shares to buy

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

The City Chic Collective Ltd (ASX: CCX) share price is sinking like a very heavy stone on Monday.

In late trade, the ASX retail share is down 60% to 12 cents.

Why is this ASX share crashing 60%?

Investors have been selling the plus sized women’s fashion retailer’s shares for a couple of reasons today.

The first is the release of a very disappointing trading update that was announced last week. That update revealed that its group sales for FY 2024 are expected to be down ~30% to $187 million.

Things are worse for its forecast pro forma adjusted EBITDA from continuing operations. That is expected to be a loss of $9.3 million for the 12 months.

City Chic’s earnings guidance excludes the Avenue and Evans businesses. The US based Avenue business is being sold to Fullbeauty Brands for US$12 million (~A$18 million), subject to working capital adjustments at completion. This compares to its purchase price in 2019 of US$16.5 million

Whereas the Evans business was sold earlier in the financial year. Once again, at a significantly lower price than what management paid to acquire it.

Management notes that these divestments align with the company’s strategy of focusing on the core City Chic customer in ANZ and the US. Completion of the Avenue sale is scheduled to occur in July 2024.

What else?

Despite its abject trading performance and acquisition record, the ASX share has been able to raise money from investors through a capital raising.

However, unsurprisingly given the state of the company, it was forced to do so at a huge discount to the prevailing share price.

This morning, City Chic announced the successful completion of its institutional placement and the institutional component of its entitlement offer. In total, raised proceeds of $14.6 million (before costs) at a 50% discount of 15 cents per new share.

The release notes that the placement and institutional entitlement offer attracted strong demand from existing institutional shareholders of City Chic. In addition, it introduced a number of new investors to its institutional shareholder base.

The company’s CEO, Phil Ryan, commented:

We are delighted with the exceptional level of support received from our existing institutional shareholders and very pleased to obtain the support of some new institutions. Their collective support positions us to build on the positive momentum our recent initiatives are generating going into FY25.

City Chic’s shares are now down approximately 98% since the start of 2022.

The post Why is this ASX share crashing 60% on Monday? appeared first on The Motley Fool Australia.

More reading

• Billionaire boosts stake in beaten-up ASX retail stock
• 6 ASX retail shares to buy this month

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 having a pretty nasty start to the trading week so far this Monday. At the time of writing, the ASX 200 has tanked by around 0.75%, dragging the index down to just under 7,740 points.

But perhaps mercifully, Paladin Energy Ltd (ASX: PDN) shares aren’t joining the pity party today.

This ASX 200 uranium stock closed at $13.24 a share last week, and that’s where the shares remain today. This morning, Paladin announced that its shares would be placed in a trading halt, with immediate effect, until the company makes a further announcement or until the morning of this coming Wednesday, 26 June.

This announcement was vague in detail, as is often the case for the first states of a trading halt. However, Paladin did admit that the coming announcement will relate to “a potential acquisition“.

That’s all we know for sure right now, as there has been no other official news or announcements out of Paladin at the time of writing.

However, there are some rumours swirling around that could give us a fair idea of what might be going on with Paladin shares today.

Paladin shares halted as ASX uranium stock looks for acquisitions

Paladin is arguably primed to make an acquisition. The company’s shares have gained an astonishing 80% or so over the past 12 months alone, a gain that has swelled to 122.5% over the past two years. With the company now commanding a market capitalisation of almost $4 billion, it certainly would have a lot of financial firepower to deploy for an acquisition by issuing new shares.

As reported by the Australian Financial Review (AFR) this morning, that is exactly what Paladin has in mind. The AFR names Fission Uranium Corp (TSE: FCU) as a likely target for Paladin.

The article points out that Fission Uranium is “right in [Paladin’s] backyard”, given its flagship Patterson Lake South Project is located in Canada’s Athabasca Basin.

The company would also be in Paladin’s acquisition range, given its current market capitalisation of C$863.9 million ($950.22 million).

Like Paladin, Fission Uranium has also had a stellar time on the Toronto Stock Exchange over recent years. Its shares have boomed 77.6% over the past 12 months.

But until Paladin issues some confirmations, we can’t be sure it is Fission Uranium that the company has set its eye on. The AFR also names the ASX-listed Boss Energy Ltd (ASX: BOE) as another potential target. However, Boss would be a much bigger target for Paladin to hunt, given its current worth of $1.7 billion.

Either way, it will be interesting to see what Paladin has to say this week when it finally lays out its plans.

The post Paladin Energy shares on ice as fission-powered acquisition rumours grow appeared first on The Motley Fool Australia.

More reading

• How the ‘nuclear renaissance’ could send ASX uranium stocks like Paladin through the roof
• 5 things to watch on the ASX 200 on Monday
• Here’s why ASX uranium shares like Deep Yellow are running hot today
• What Bill Gates, ASX uranium shares and the AI revolution have in common
• 3 reasons ASX uranium stocks can keep charging higher into 2025

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.

If you’re not averse to investing at the small side of the market, then it could be worth checking out Aroa Biosurgery Ltd (ASX: ARX).

That’s because analysts at Bell Potter believe the small cap ASX stock could rise materially from current levels.

What is this small cap ASX stock?

Aroa Biosurgery is a soft-tissue regeneration company. It states that it is committed to “unlocking regenerative healing for everybody.”

It develops, manufactures, sells, and distributes medical and surgical products to improve healing in complex wounds and soft tissue reconstruction. The small cap ASX stock’s products are developed from a proprietary AROA ECM technology platform. It is a novel extracellular matrix biomaterial derived from ovine forestomach.

‘A potentially transformational year’

Bell Potter believes that FY 2025 could be a transformational year for the company that could see its first profit and free cash flow. It said:

FY25 is a potentially transformational year for ARX with the likelihood of a maiden profit and positive free cash flows. We believe these have been the drivers of the resurgence in market value of the stock, spurned on by the positive revenue and earnings guidance provided at the recent full year update (for FY24).

Another positive is that there could soon be some clinical trial data available that the broker feels could be supportive of sales. It adds:

While the ARX products appear widely regarded and have been the subject of literally dozens of published articles, the absence of gold standard data from randomised clinical trials is a gap. Recruitment of clinical trials in the key area of lower limb salvage and large trauma wounds is problematic, however, to this end the company has recently completed enrolment of its Myriad Augmented Soft Tissue Regeneration Registry (MASTRR) with clinical data expected to commence in late FY25.

In addition, there’s potential for another clinical trial to open up the company to a market with a US$1 billion opportunity. The broker said:

In addition, ARX will shortly complete recruitment of its 120 patient randomised study in diabetic foot ulcer (DFU) patients investigating the wound healing properties of its Symphony product with headline data due in 2H FY25. Data from a recent retrospective real world study is highly supportive of the wound healing properties of Myriad in severe DFU cases. A successful outcome (which we believe is likely) may unlock the market in outpatient wound care for DFU’s where TAM is estimated at >US$1.0bn.

Big return potential

This morning, Bell Potter has reiterated its buy rating and 90 cents price target on the small cap ASX stock.

Based on its current share price of 60 cents, this implies potential upside of 50% for investors over the next 12 months.

Overall, this could make Aroa Biosurgery worth a closer look. Particularly if you’re looking for some small cap exposure.

The post Guess which small cap ASX stock could rise 50% in a ‘transformational year’ appeared first on The Motley Fool Australia.

More reading

• Paladin Energy shares on ice as fission-powered acquisition rumours grow
• How rich are the Guzman Y Gomez founders following the company’s IPO?
• Leading brokers name 3 ASX shares to buy today
• Buying ASX 200 shares? Here’s why you’ll like NAB’s inflation forecast
• 2 ASX 200 compounding machines to buy and hold forever

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 big piece of ASX news last week (and arguably in 2024 to date) was the successful initial public offering (IPO) of Guzman y Gomez Ltd (ASX: GYG). Guzman stock floated on the ASX last Thursday, hitting the ASX boards at $22 a share.

Well, that $22 price didn’t last long. Within minutes of the company beginning its ASX listing, Guzman shares had topped $30 each, reaching a high of $30.99 on Thursday afternoon.

That euphoria has since died off a little, but at the time of writing, Guzan shares are still trading at $28.78 each, a good 30.8% or so above the company’s IPO price.

It goes without saying that Guzman y Gomez shares’ ASX debut has been a roaring success for the company’s founder, senior management, and early investors.

But exactly how successful has it been?

How rich are Guzman y Gomez’s founders post-IPO?

Well, last week, my Fool colleague Mitchell went through Guzman’s largest shareholders after the company went public.

Its two largest shareholders are early investors TDM Growth Partners and Barrenjoey Capital. Other significant investors include Aware Super, Gaetano Russo, former board member Stephen Jermyn, and Richard and Kate Bell.

But Guzman’s co-founders Steven Marks (also currently Guzman’s co-CEO) and Robert Hazan (retired) both remain significant shareholders of the company. Marks currently owns 7,507,250 shares, or 7.41% of the company, through the Marks family’s Evan Jason Pty Ltd. He also owns another 1,212,000 shares, or 1.2%, in his own name.

Meanwhile, Hazan owns 4,527,500 shares through his family company RBH Pty Ltd. That’s worth 4.47% of Guzman’s outstanding shares.

When Guzman IPOed at $22 a share, this would have valued Marks’ Evan Jason stake in the company at approximately $165.16 million, plus his own shares at $26.66 million. Hazan’s stake would have been worth $99.61 million.

But at today’s pricing following the successful IPO, Marks would now have a stake worth a whopping $250.94 million (combined). Not a bad return for a few days.

Hazan, in turn, would be sitting on a fortune valued at roughly $130.3 million right now.

Of course, most of these founders’ shareholdings are now under a voluntary escrow period. 25% of the co-founders’ shares will remain escrowed until Guzman releases its earnings results for the first half of the 2025 financial year, provided the shares are trading at least 20% above the company’s IPO price of $22.

The remaining shares will be escrowed until the company releases its results for the full 2025 financial year, which will end on 30 June 2025.

So Marks and Hazan can’t exactly take advantage of the company’s explosive IPO results right now. But even so, both will undoubtedly be walking with a spring in their steps today.

The post How rich are the Guzman Y Gomez founders following the company’s IPO? appeared first on The Motley Fool Australia.

More reading

• How does the Guzman Y Gomez ASX valuation compare to Domino’s?
• Why Guzman y Gomez, KMD, Mineral Resources, and Pilbara Minerals shares are sinking
• Nuclear power, debt and burritos
• Guzman y Gomez share price implodes 10% on ASX trading day 2
• Would I be crazy to buy Guzman y Gomez (GYG) shares at $30?

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.