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ASX 300 shares are higher on Tuesday, with the S&P/ASX 300 Index (ASX: XKO) rising 0.65%.

Here are three ASX 300 companies charging higher after releasing their quarterly results.

Cooper Energy Ltd (ASX: COE)

The Cooper Energy share price is up 9.09% to 12 cents after the company reported a 3% boost to production in the December quarter and a 12% annual lift. Cooper Energy said it was achieving positive outcomes from its Orbost Improvement Project. This led to a substantial impact on revenue, which lifted 8% over the quarter. The ASX 300 energy share is down 40% over the past 12 months.

Iluka Resources Limited (ASX: ILU)

The Iluka Resources share price is up 4.85% to $6.81 on news of 105kt of production in 4Q FY23 and total annual output of 639kt. Iluka sold 134kt in 4Q with full-year sales of 494kt. The ASX 300 mineral sands miner said lower zircon sales reflect subdued economic activity in Europe and China. However, pricing remained relatively strong. The ASX 300 share is down 36% over the past year.

Coronado Global Resources Inc (ASX: CRN)

The Coronado Resources share price is up 4.6% to $1.71. This follows news of the second-highest full-year revenue ever at $2.9 billion. December quarter group revenue was $680 million. The coal miner dug up 6.1 Mt in December, up 3.3%, with saleable production of 3.9 Mt, up 6.4%. Coal availability was greater at Curragh following waste movement works. The ASX 300 coal share is down 20% over the past 12 months.

The post Miners among the ASX 300 shares surging on quarterly reports appeared first on The Motley Fool Australia.

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More reading

• Why Boss Energy, Cooper Energy, Judo Capital, and Polynovo shares are racing higher
• Why Appen, Baby Bunting, Cooper Energy, and Liontown shares are sinking today
• Here are the top 10 ASX 200 shares today
• The 8 ASX mining stocks Goldman Sachs says are buys in 2024
• Here are the top 10 ASX 200 shares today

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 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.

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If you want some decent dividend yields then look no further than the two ASX dividend stocks named below.

That’s because brokers expect these buy-rated shares to provide investors with growing (and attractive) yields over the next couple of years. Here’s what analysts are forecasting:

Coles Group Ltd (ASX: COL)

The first ASX dividend stock that could be a buy is supermarket giant Coles.

Citi is feeling positive about the company’s outlook and is predicting meaningful margin expansion in the second half as the company rolls out new technology to combat theft. In addition, with the company focusing on making its operations more efficient through automation, there could be more of this in the future.

It is partly for this reason that Citi is forecasting fully franked dividends per share of 64 cents in FY 2024 and 70 cents in FY 2025. Based on the current Coles share price of $15.83, this implies yields of 4% and 4.4%, respectively.

The broker has a buy rating and $17.50 price target on its shares.

Dexus Industria REIT (ASX: DXI)

Another ASX dividend stock that has been tipped as a buy is Dexus Industria.

Morgans is a fan of the industrial property company. It likes the company due to its attractive yield and “solid underlying portfolio metrics and near/medium term growth opportunities via the development pipeline.”

Its analysts are expecting the latter to support the payment of dividends per share of 16.4 cents in FY 2024 and 17 cents in FY 2025. Based on the current Dexus Industria share price of $2.68, this will mean dividend yields of 6.1% and 6.3%, respectively.

Morgans has an add rating and $3.19 price target on its shares.

The post Boost your second income with these buy-rated ASX dividend stocks appeared first on The Motley Fool Australia.

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More reading

• How I’d build a backup superannuation fund with $10,000 and 5 ASX shares
• Top ASX shares to buy in 2024 instead of investing in a term deposit
• Brokers name 3 ASX dividend shares to buy now
• Buy Coles and these ASX dividend stocks
• Will a competition review hurt Woolworths and Coles shares?

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

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The concept of ‘cheap’ ASX shares can be misinterpreted. Whether a company’s shares are 5 cents or $5 is almost irrelevant. What matters is whether the company presents value. In other words, could it provide an attractive return?

Growth and market capitalisation are functions of value. If I can buy a laundromat for $10,000 and it produces $2,000 per annum with no expectation of future growth, that equates to a price-to-earnings (P/E) ratio of 5 — not a bad proposition.

However, another laundromat selling for $15,000, generating $2,500 in the past year — a P/E of 6 — expects to grow 10% per annum over the next five years. While slightly more ‘expensive’, this laundromat presents greater value based on future earnings.

I look at ASX shares the same way. Here are three companies I believe could be cheap buys right now.

Where I’m finding deals among ASX shares

Trawling through hundreds of publicly listed Australian companies, a few have pinged my value-finding radar. These are businesses that I believe are currently experiencing an underestimation of their growth potential.

Nick Scali Limited (ASX: NCK)

At 10.2 times earnings, the designer furniture retailer trades at a discount to the wider Australian specialty retail industry. Part of the reduced multiple could be attributable to forecasts of revenue and earnings decline as interest rates bite.

Helmed by Anthony Scali, son of the founder, this company has an impressive track record of growth. Total revenue has grown at a compound annual growth rate (CAGR) of 15.2%, accompanied by increasing net margins.

Looking forward, the sofa seller is targeting a further 64% to 74% increase in store count over time. So, while the near term might present some softness, I believe it could be an opportunity to buy shares on the cheap ahead of solid growth on a longer timescale.

Lindsay Australia Ltd (ASX: LAU)

Possibly the most attractive ASX share on my list, Lindsay Australia is an integrated transport company that trades far below its peers. Despite growing its top line by a CAGR of 13.4% over the last five years, the $333 million business is valued at 9.4 times FY2023 earnings.

What’s more perplexing is this meagre multiple prevails even though analysts forecast growth. In FY23, Lindsay trucked in $34.5 million of net profits after tax (NPAT). This figure is expected to increase to $50.1 million in FY26, equating to a 13.2% CAGR in earnings over the next three years.

Layering in the company’s sturdy balance sheet and quality management, it seems to me this ASX share could be a cheap deal.

Accent Group Ltd (ASX: AX1)

This sneaker seller looks to be out of fashion in the market. Distributing footwear and apparel, Accent Group is a leader within its industry in Australia and New Zealand. Yet, the P/E ratio for this company has been compressed to 13.4 times, down from 33.1 in December 2021.

The current multiple is more or less in line without peers. However, I tend to think Accent is a cut above the rest. Namely, its exceptional ability to expand into new distributed brands and grow store count. In four years, the company grew its stores to 821 from 429 (71%).

In my opinion, the current earnings multiple does not fully reflect Accent’s room for further growth. The company has executed attractive acquisitions in the past. The tightening in consumer spending could favour Accent as weaker peers look to consolidate.

This ASX share is sitting atop my own buy list.

The post Cheap and growing: The best bang for buck ASX shares I’d buy appeared first on The Motley Fool Australia.

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More reading

• 3 ASX small-cap shares I’d buy for the long-term
• The Accent share price has sprinted ahead since June! Here’s how much you’ve made
• These ASX 300 dividend shares offer major upside and good yields
• Aim to beat the ASX 200 with this cash-gushing dividend stock
• Top ASX shares for beginner investors to buy in 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 Lindsay Australia. The Motley Fool Australia has recommended Accent Group, Lindsay Australia, and Nick Scali. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Woodside Energy Group Ltd (ASX: WDS) share price doesn’t seem to be enjoying the gains of the broader market so far this Wednesday.

While the S&P/ASX 200 Index (ASX: XJO) is up a decent 0.65% so far this session, Woodside shares have gone the other way. The ASX 200 energy stock is currently nursing a loss of 0.66%, putting the company at $30.95 a share.

This latest drop is just the latest bad day in what has become a rough few months for the oil and gas giant.

It was only back in August that the Woodside share price was riding high at over $39 each (a new 52-week high at the time). But as global oil prices have taken a dive in the subsequent months, so too have Woodsie shares. At today’s pricing, the company has lost more than 20% since those August highs.

With that in mind, some investors might be tempted to go out and buy Woodside shares today. After all, we’re all told to ‘buy low’ when it comes to investing. Plus, picking up shares of energy companies like Woodside during oil price slumps has often been a lucrative strategy in the past.

So should you be rushing to pick up Woodside shares at under $31 each today?

Is the Woodside share price a buy under $31 a share?

One ASX expert thinks the answer is a definitive ‘yes’. As reported by The Bull recently, Michael Gable of Fairmont Equities has named the company as a buy, citing “a bright outlook for crude oil” as the primary reason:

We continue to retain a bright outlook for crude oil. Supply constraints and increasing global demand should elevate energy prices. Woodside shares are attractive at these levels. The share price chart also indicates strong support at current prices. The shares have fallen from $36.88 on October 18, 2023, to trade at $30.43 on January 18, 2024.

But Gable isn’t the only expert who is seeing value in Woodside.

Earlier this month, my Fool colleague James covered the views of ASX broker Goldman Sachs on Woodside. Goldman has rated Woodside as a buy, giving the company a 12-month share price target of $36.30.

The broker stated that it sees “long-term value in WDS” and also expects rising dividends from the company.

As such, it seems that two ASX brokers are seeing significant value in the Woodside share price at under $31. But only time will tell if they’re on the money here.

The post At under $31, should I be rushing to buy Woodside shares? appeared first on The Motley Fool Australia.

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More reading

• Down 31%: Buy the dip on these ‘attractive’ ASX 200 dividend shares
• 5 things to watch on the ASX 200 on Monday
• Which had the better year in 2023: Telstra, Woodside or Wesfarmers shares?
• 5 things to watch on the ASX 200 on Thursday
• Why Santos shares could face headwinds despite $5.7 billion Barossa win

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 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.

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Commonwealth Bank of Australia (ASX: CBA) shares hit a new 52-week high of $115.98 in early trading on Tuesday.

The CBA share price is currently up 0.72% to $115.69, while the S&P/ASX 200 Index (ASX: XJO) is up 0.7%.

CBA shares have been rising strongly since early November, as the chart below shows.

The 52-week high comes amid Australia’s biggest home loan lender releasing its 2024 economic outlook.

The outlook includes CBA’s forecasts for the property market over the new year.

CBA shares hit new 52-week high

Senior CBA economist, Belinda Allen said the Australian housing market is likely to moderate in the first half of the year before rebounding in the second half following interest rate cuts.

CBA’s economics team predicts the Reserve Bank will start cutting interest rates in September and will reduce the official cash rate by 75 basis points by Christmas.

Strong demand, driven by an anticipated 2.3% in final population growth for 2023, coupled with an ongoing housing shortage, pushed property prices higher in 2023 despite rising interest rates.

This tight supply/demand dynamic will remain in 2024, with population growth of 1.8% anticipated this year amid only a small lift in the number of new home commencements, Allen said.

Many of the same factors that drove prices higher are set to be in place in 2024, albeit with less intensity.

However we expect affordability constraints and rising advertised supply to put a handbrake on home price growth over the first half or so of 2024.

Overall we expect a lift of 5% in home prices across the 8 capital cities this year.

Property price predictions for 2024

Here are CBA’s forecasts for home values growth over 2024.

Capital city	Growth prediction
Perth	9%
Adelaide	9%
Brisbane	8%
Sydney	3%
Melbourne	2%

In 2023, Perth and Adelaide led the capital cities in terms of price growth at 15.2% and 13.1%, respectively, according to CoreLogic data. (View our article ASX 200 shares vs. property: Which delivered the best growth in 2023?)

While the CBA team expects prices to grow overall in 2024, there would be a “considerable divergence” in market activity between the capital cities over the new year.

Allen explained:

We expect a distinct period of moderation, including small monthly falls in Sydney and Melbourne over the first half or so of 2024.

We also expect the other major capital cities of Brisbane, Perth and Adelaide to experience slower monthly growth than in 2023.

Interest rate cuts beginning in September are then expected to spur a period of faster monthly home price growth to finish the calendar year.

Allen said affordability would be a factor slowing down market activity in Sydney and Melbourne.

High rents push young people into ownership

Ms Allen noted that Australia’s extremely tight rental market is propelling more people into home ownership.

She said:

Rents rose by just under 10%/ yr to November and we don’t expect a material change in the near term. Vacancy rates sit at, or close to record lows.

Lending for housing rose in the back half of 2023.

Lending to first home buyers led the charge, with annual growth sitting at 25.8%/yr to November 2023. Total lending excluding refinancing has been rising since August.

CoreLogic data released today shows the median weekly rent in Australia has surpassed $600 per week for the first time.

Head of research at CoreLogic, Eliza Owen, said rapid population growth, reduced household sizes, lower investor buying, and a spike in landlords selling had reduced rental stock and pushed up weekly rents.

How do rising home values impact CBA shares?

CBA is Australia’s biggest home mortgage lender, so a strong property market is a tailwind for its shares.

According to CBA’s FY23 report, the bank had $577 billion in home loans on its books as of 30 June FY23.

That’s up from $562 billion as of 31 December 2022 and $546 billion as of 30 June 2022.

Just over 70% of CBA’s home loans are on a variable rate. This is up from 66% in December 2022 and 62% in June 2022.

Borrowers experiencing negative equity increased to 1% as of 30 June 2023. This is a rise from 0.5% in December 2022 and 0.4% in June 2022.

Mortgagee-in-possession loans held at 2% of CBA’s home lending portfolio over this 12-month period.

The post CBA shares smash new record amid 5% home price boost prediction appeared first on The Motley Fool Australia.

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More reading

• Why I think CBA is one of the best ASX bank shares
• Top ASX shares to buy in 2024 instead of investing in a term deposit
• Forget term deposits and get rich with ASX shares the Warren Buffett way
• 3 ASX 200 dividend shares I think you could safely hold for decades
• What will my ASX 200 bank stocks be worth in 5 years?

Motley Fool contributor Bronwyn Allen has positions in Commonwealth Bank Of Australia. 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.

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The S&P/ASX 200 Index (ASX: XJO) has continued its positive run on Tuesday. In afternoon trade, the benchmark index is up 0.5% to 7,515.5 points.

Four ASX shares that have failed to follow the market higher today are listed below. Here’s why they are falling:

IDP Education Ltd (ASX: IEL)

The IDP Education share price is down 8% to $20.27. Investors have been selling this language testing and student placement company’s shares today after Canada announced plans to limit foreign student visas in response to housing shortages. Student numbers will be down by approximately a third in 2024, which could be a blow to IDP Education’s operations in the country.

Karoon Energy Ltd (ASX: KAR)

The Karoon Energy share price is down almost 5% to $1.77. This has been driven by the release of a production update and the revision of its full year guidance. In respect to the latter, total production will be in a range of 11.2 million to 13.5 million barrels of oil equivalent (MMboe) in 2024. This compares to the previous range of 12 million to 14.5 MMboe. Operational issues at the Bauna Project are to blame.

Liontown Resources Ltd (ASX: LTR)

The Liontown share price is down a further 2% to 92.2 cents. This lithium developer’s shares have been sold off this week following the release of a disappointing update on the Kathleen Valley Lithium Project. Due to weak lithium prices, the company has commenced a review aiming to preserve capital and reduce the near-term funding requirements. In addition, a recently announced $760 million debt funding package has been terminated by lenders.

Zip Co Ltd (ASX: ZIP)

The Zip share price is down almost 7% to 69 cents. This is likely to have been driven by profit taking from some investors after a very strong gain by the buy now pay later provider’s shares on Monday. Investors were buying its shares yesterday in response to a strong trading update.

The post Why IDP Education, Karoon Energy, Liontown, and Zip shares are falling today appeared first on The Motley Fool Australia.

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More reading

• The Zip share price has soared 147% in 3 months, can it keep going?
• Here’s the lithium price forecast through to 2027
• Broker tips 70% return for Liontown shares after selloff
• 3 exciting ASX growth shares Bell Potter rates as buys
• 5 things to watch on the ASX 200 on Tuesday

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 Idp Education and Zip Co. The Motley Fool Australia has recommended Idp Education. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The S&P/ASX 200 Index (ASX: XJO) is having another positive session on Tuesday. At the time of writing, the benchmark index is up 0.6% to 7,521.2 points.

Four ASX shares that are rising more than most today are listed below. Here’s why they are climbing:

Boss Energy Ltd (ASX: BOE)

The Boss Energy share price is up 1.5% to $5.37. Investors have been buying this uranium developer’s shares following the release of drilling results from the Honeymoon Project. Management notes that more strong drilling results highlight scope for growth in production, mine life, and cashflow.

Cooper Energy Ltd (ASX: COE)

The Cooper Energy share price is up 9% to 12 cents. This morning, analysts at Macquarie upgraded the energy company’s shares to an outperform rating with an 18 cents price target. The broker believes a selloff on Monday relating to a cost blowout has created a buying opportunity for investors. The broker feels that other positive news also released offset the cost blowout news.

Judo Capital Holdings Ltd (ASX: JDO)

The Judo Capital share price is up almost 18% to $1.10. Investors have been snapping up this small business lender’s shares after it revealed strong profit growth in the first half of FY 2024. Unaudited profit before tax (PBT) is expected to be $67 million for the first half, which is up 24% on the prior corresponding period.

Polynovo Ltd (ASX: PNV)

The Polynovo share price is up 8% to $1.88. This appears to have also been driven by a bullish broker note out of Macquarie. In response to the medical device company’s first half sales update on Monday, the broker has retained its outperform rating with an improved price target of $2.90. Polynovo’s first half sales were comfortably ahead of the broker’s expectations.

The post Why Boss Energy, Cooper Energy, Judo Capital, and Polynovo shares are racing higher appeared first on The Motley Fool Australia.

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More reading

• Guess which ASX All Ords stock is surging 14% on soaring profit
• Here are the top 10 ASX 200 shares today
• Why Appen, Baby Bunting, Cooper Energy, and Liontown shares are sinking today
• If I’d invested $20,000 in Boss Energy shares one month ago here’s what I’d have today
• Would I be crazy to buy Boss Energy shares at $5.50?

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

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All Australians deserve a comfortable and stress-free retirement. But unfortunately, many of us are increasingly pessimistic that our superannuation system will be able to provide this for us.

As most readers would know, superannuation is designed to deliver a nest egg that is large enough to at least partially self-fund a comfortable retirement. However, a recent survey from State Street Global Advisers found that confidence in superannuation is falling.

The survey asked a group of Australian savers whether they “expect they will have saved up enough to retire.” Tellingly, only 25% of those surveyed in 2022 agreed. But in 2023, that number had fallen to 20%.

Further, the proportion of those asked whether they “are not confident they will be able to retire when they plan to” rose from 40% in 2022 to 50% in 2023.

Our superannuation system is great in my view. However, the results of this survey show that it is probably a good idea for most of us to build up a backup superannuation fund outside the retirement system. We can do this by putting together a portfolio of ASX shares outside our super fund.

After all, our super is mostly invested in ASX and international shares anyway. So making a backup super fund is only an extension of our super fund’s original purpose. The upside of investing outside super is that our money isn’t locked away until retirement age. We can start using the passive income from the dividends our ASX shares produce to start paying bills straight away.

But how would one build this second superannuation fund exactly? Well, here are five ASX dividend shares I would be comfortable starting with if I had $10,000 to spare.

5 ASX shares I would use in a backup superannuation fund

I would start with an ASX index fund, such as the Vanguard Australian Shares Index ETF (ASX: VAS). A fund of this nature holds all of the top 300 shares on the ASX. As such, it provides instant diversification as well as an immediate stream of dividend income.

An index fund like VAS also gives us the benefit of getting the return of the broader Australian share market, in case our stock-picking skills aren’t up to scratch.

But then I’d turn to some individual shares. Telstra Group Ltd (ASX: TLS) seems like a good pick as well. Telstra is of course the largest telco on the ASX and in Australia. A huge swathe of the country uses Telstra’s services for mobile access, NBN broadband connections or both.

Given how important these services are in the modern world, customers won’t be easily persuaded to give them up, even if there is a recession. That makes Telstra shares, and the 4.5% fully-franked dividend yield they come with, a great pick for a backup superannuation fund.

Next, I’d turn to Transurban Group (ASX: TCL). This toll-road operator is another defensive company, thanks to its vast network of arterial roads across our capital cities.

Transurban has the right to periodically increase its tolls in line with inflation. That makes this company a highly defensive income payer too. You can expect a dividend yield of around 4.7% from Transurban shares today.

Looking for fully-franked income in retirement

The next stock I’d choose for a backup superannuation fund is Coles Group Ltd (ASX: COL). Coles is another business we’d all know. But again, I like this company for its inherent defensive nature.

We all need to eat, drink and restock our households regularly, regardless of the economic weather. So as long as Coles is one of the cheapest places to do so, it will be a successful company, and thus investment in my view.

Coles has caught my attention as a retirement stock thanks to its impressive run of dividend increases. Since its ASX listing in late 2018, Coles has been able to ratchet up its dividend income every single year. Today, you can look forward to a fully-franked 4.17% dividend yield from Coles shares.

The final share I’d place in a backup superannuation fund is Washington H. Soul Pattinson and Co Ltd (ASX: SOL). This investment house is another stock that instantly brings diversification to the table. It owns a vast portfolio of other assets, including major stakes in several ASX shares like TPG Telecom Ltd (ASX: TPG).

I love this company for its long track record of delivering impressive returns to investors. Its fully-franked dividend yield of 2.62% today might not look too impressive. However, consider that Soul Patts has managed to raise its annual dividend every single year since 2000. That’s 23 years and counting.

Because of this impressive streak, I think this company makes for a phenomenal candidate for a backup retirement share portfolio.

The post How I’d build a backup superannuation fund with $10,000 and 5 ASX shares appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has positions in Telstra Group, Vanguard Australian Shares Index ETF, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Transurban Group and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Coles Group, Telstra Group, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Tpg Telecom. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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ASX mining stock Cobre Ltd (ASX: CBE) more than doubled its market valuation in less than 30 minutes this morning after the company released an announcement.

The Cobre share price is up by 112.2% to 8.7 cents per share at the time of writing. The ASX mining stock closed at 4.1 cents yesterday.

Meantime, the S&P/ASX All Ordinaries Index (ASX: XAO) is up 0.6%.

What’s the big news for this ASX mining stock?

The junior copper exploration company has been selected by BHP Group Ltd (ASX: BHP) to participate in the mining giant’s 2024 Xplor program.

BHP created the Xplor program to help young companies in the critical minerals space accelerate their operations and potentially establish a long-term partnership with the mining giant.

Xplor runs for six months, during which time BHP will give Cobre US$500,000 in non-dilutive funding, as well as access to its internal expertise and global network of suppliers, to advance its exploration activities.

Cobre will use the money to accelerate its Kitlanya West Project in Botswana.

The ASX mineral explorer controls approximately 5,348 square kilometres of tenements within the Kalahari Copper Belt (KCB). The KCB is one of the world’s most prospective areas for copper.

At the conclusion of the Xplor program period, Cobre is under no obligation to partner with BHP.

What did management say?

Cobre said the funds would be spent progressing targets that the company thinks may host tier-one copper-silver deposits.

It looks like BHP has confidence in Kitlanya West. Cobre announced “encouraging new targets” at the site in November. Drilling results led to an increased estimate of the target size to 4 km x 1.2 km.

Part of the Xplor deal is the option for BHP to retain certain pre-emption rights at Kitlanya West for 12 months after the program ends.

Cobre CEO Adam Wooldridge said:

The Xplor program provides us with a unique opportunity to partner with BHP experts to further our Kalahari Copper Belt targeting criteria and exploration programs.

We’re delighted to have successfully made it through the rigorous selection process, which is a great accolade for the technical merits of our team and exploration projects.

We’re looking forward to participating in the program and developing priority targets where the Xplor funding will provide further value for our shareholders.

What else is Cobre working on?

Cobre is also working on its Perrinvale project in the Panhandle Greenstone Belt of Western Australia.

It has discovered a globally rare VHMS deposit enriched in high-grade copper, gold, silver, and zinc.

Sandfire Resources Ltd (ASX: SFR) discovered Australia’s last significant VHMS deposit more than a decade ago.

Share price snapshot for this ASX mining stock

The ASX mining stock was listed on the ASX in early 2020 at 20 cents per share.

Here is its history:

The post ASX mining stock doubles in value in 30 minutes on news of BHP deal appeared first on The Motley Fool Australia.

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Motley Fool contributor Bronwyn Allen has positions in BHP Group. 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.

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Small-cap ASX shares have, on average, lagged their larger competitors over the past few years.

And smaller ASX stocks haven’t gotten any help from the rapid increase in interest rates since the RBA began its tightening cycle in May 2022.

On 3 May 2022, the official cash rate stood at a rock bottom 0.10%. On 4 May 2022 that was raised to 0.35% in what would be the first of 10 consecutive monthly interest rate hikes from the RBA.

Since 6 May 2022, the S&P/ASX 200 Index (ASX: XJO) has gained 3.7% (excluding dividends).

As for small-cap ASX shares, the S&P/ASX Small Ordinaries Index (ASX: XSO), which holds 200 companies but excludes the biggest 100 from the ASX 200, has lost 8.3%.

That’s not to say some smaller stocks haven’t delivered outsized returns.

Most of the roughly 2,200 companies listed on the ASX are small-cap ASX shares, after all.

But with interest rates in Australia and most of the developed world looking set to come down in 2024, The Motley Fool asked Andy Gracey, portfolio manager of the Emerging Companies and the Australian Shares Fund at Australian Ethical Investment, whether 2024 might be the time for small-cap ASX shares to regain their shine.

Will 2024 see a rebound for small-cap ASX shares?

“We are encouraged with the outlook for domestic inflation and interest rates,” Gracey told us.

“The market now expects the RBA to cut interest rates in the second half of 2024 and into 2025. This change in sentiment drove the share-market rally in late 2023.”

With lower rates on the horizon, Gracey said the appeal of risk assets like property and shares will be more attractive to investors going forward.

“The initial share-market beneficiaries have been large-cap or ASX 100 companies, with small companies also performing strongly in the December quarter,” he said.

And there could be some outperformance ahead for small-cap ASX shares in 2024.

“Small companies and particularly microcap companies have underperformed their Australia blue-chip peers over the last few years, so there certainly is rationale to anticipate some form of catchup for these emerging companies,” he told us.

But Gracey cautioned that inflation may prove stickier than many investors are hoping.

“We do, however, expect inflation to be persistent and don’t expect interest rates to retrace to the levels seen earlier this decade,” he said, pointing out there’s still a fair way to go before inflation comes back down to the RBA’s 2% to 3% target range.

“There are also challenges around company valuations,” he added of investing in small-cap ASX shares, noting the 25% price to earnings premium for the small companies’ index compared to the ASX 200.

According to Gracey:

Once you go outside the ASX materials and financials sectors it’s a real struggle to find compelling value, especially in the context of a risk free 10-year Australian government bond yield sitting at 4.3%

Another challenge for all companies and particularly small companies is that the RBA lowering interest rates is typically accompanied by a weakening economy and depressed company earning.

With these thoughts in mind, we asked Gracey about the pros and cons of investing in small-cap ASX shares versus blue-chips.

Benefits and risks of investing in the smaller end of the market

“The rationale for investing in ASX small caps versus blue-chips is superior capital growth over the long term,” he said.

“Small companies are more focused and specialised on their core markets and offer superior revenue and profit growth versus blue-chips.”

Another potential benefit of buying small-cap ASX shares, he said, was that these “are also more likely to be targets for private equity and strategic buyers”.

On the risk side of the ledger, Gracey cautioned that “these companies do have more volatile trading updates and share prices”.

He added:

This is because small companies are typically more vulnerable to macro, regulatory and industry challenges as they have fewer levers or tools to manage through these disturbances.

We have also seen the stock trading liquidity challenges in small and particularly microcap companies over recent periods as investors departed this section of the market.

The post Interest rates look near their peak. Time to invest in small-cap ASX shares? appeared first on The Motley Fool Australia.

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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.

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