Tag: Motley Fool

As a mature, blue-chip ASX 200 share, Woolworths Group Ltd (ASX: WOW) is one of the most widely held stocks in Australia. No one can question Woolworths’ dominance of the grocery sector and its presence in the everyday lives of most Australians.

So if you are one of Woolworths’ numerous shareholders, you might be delighted with some recent news about the company.

Regular readers here at The Motley Fool might have spotted a fantastic piece by my colleague Bernd last week, concerning another blue chip Australian stock.

That stock is Qantas Airways Limited (ASX: QAN). As we covered at the time, the 2023 brand ranking report from Brand Finance Australia found that Qantas is now the 41st strongest brand in Australia. That’s down from 1st place back in 2019.

However, the company that defended its pole position among the most valuable brands in Australia in 2023? It was none other than Woolworths.

Own Woolworths shares? You own a $15 billion brand

Brand Finance found that the Woolworths brand was worth $15.4 billion, albeit 5% lower than where it was valued last year. Not bad for a company with a market capitalisation of $43.57 billion.

Following Woolworths was Telstra Group Ltd (ASX: TLS), with a brand value of $13 billion (down 1%) year on year). Then there was Commonwealth Bank of Australia (ASX: CBA). CBA’s brand value stood at $10.6 billion (down 7%).

Woolies’ arch-rival Coles Group Ltd (ASX: COL) came in at fourth place. That was with a brand value of $9.8 billion. In some potential schadenfreude for Woolies shareholders, the value of Coles’ brand fell by a far more drastic 9% from where it was in 2022.

Brand Finance noted that the retail sector (which the report lists Woolworths shares under) was “severely affected by inflation in 2023 which led to a reduced growth rate”.

It also addressed Woolworths directly:

…while the Australian economy managed to avoid a recession in 2023, the retail sector faced other challenges. For instance, real retail spending experienced a decline for three consecutive quarters due to consumers tightening their discretionary purchases amid rising living costs. This impacted brands such as Woolworths, Coles and Bunnings.

Bunnings is of course owned by Wesfarmers Ltd (ASX: WES).

So Woolworths shareholders certainly have something to feel good about today. It’s quite the feather in the cap to own the most valuable brand in Australia.

The post Own Woolworths shares? Here’s a $15 billion piece of news appeared first on The Motley Fool Australia.

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More reading

• Goldman Sachs says these blue chip ASX 200 shares are top buys
• Will a competition review hurt Woolworths and Coles shares?
• Here’s why brokers are very bullish on these ASX 200 blue-chip shares
• Buy these high-quality ASX 200 shares for your retirement portfolio
• Buy these ASX retirement shares in 2024

Motley Fool contributor Sebastian Bowen has positions in Telstra Group and Wesfarmers. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Wesfarmers. The Motley Fool Australia has positions in and has recommended Coles Group, Telstra Group, and Wesfarmers. 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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It’s been a rather positive start to the trading week for the S&P/ASX 200 Index (ASX: XJO) and most ASX 200 shares this Monday. At present, the ASX 200 has put on a rosy 0.65% and is back to around 7,470 points. But it’s a very different story when it comes to the Pilbara Minerals Ltd (ASX: PLS) share price.

Pilbara shares are having a not so good, very bad day, to put it politely. The ASX 200 lithium stock closed at $3.47 a share last week. But Pilbara is currently down a hefty 4.76% to $3.31 a share after falling as low as $3.25 earlier this afternoon. At the time, that was a fall worth more than 6%.

So what’s got up Pilbara’s proverbial goat to warrant falls of this magnitude this Monday?

Well, it’s not entirely clear. There’s been no official ASX news out of Pilbara for a while now. However, this fall is part of a broader trend in the ASX lithium sub-sector.

ASX lithium woes drag down the Pilbara share price

Almost all ASX lithium shares are having a day to forget today. Take Core Lithium Ltd (ASX: CXO). It’s down 3.8% right now at 20 cents a share. Sayona Mining Ltd (ASX: SYA) has dropped 6.7% to 4.2 cents, while Arcadium Lithium plc (ASX: LTM) has shed a coincidental 7.48% down to $7.48 a share.

But it’s Liontown Resources Ltd (ASX: LTR) that is making the news. Liontown shares are having a shocker, having tanked by 19.25% down to 96 cents apiece. That’s after dropping as low as 88 cents earlier this morning, a new 52-week low for the company.

This price collapse follows a poorly received update that we discussed earlier today. As my Fool colleague went into at the time, this update informed investors that Liontown is considering shelving expansion plans at a major lithium mine. It also revealed that a recent funding facility has been cancelled due to poor lithium pricing.

Brokers and shorters bet against lithium

The continued presence of Pilbara shares on the ASX’s most short-sold shares list might also be contributing as well. As my Fool colleague discussed just this morning, Pilbara continues to top the list of the ASX’s most-shorted shares.

Investors can be wary of investing in a company that has significant capital wagered against its shares rising. So this could also be at least partly to blame here.

Another factor we can also point to is a recent broker revision. ASX broker Bell Potter has just come out with a revised opinion on Pilbara shares. The broker has downgraded its 12-month share price target for Pilbara shares from $3.90 to $3.60. Hardly a vote of confidence.

So seems likely that it is this combination of events that is weighing on the Pilbara share price, as well as the entire ASX lithium space today.

Let’s see if the rest of the week holds anything better in store for the Pilbara Minerals share price and the company’s lithium peers.

The post Why has the Pilbara Minerals share price just tanked 6%? appeared first on The Motley Fool Australia.

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More reading

• Mineral Resources shares tumble 9% on unfavourable broker rating
• How I invest and make money from ASX mining shares
• These are the 10 most shorted ASX shares
• Are Pilbara Minerals shares a buy for that 7% dividend yield?
• Here are the top 10 ASX 200 shares today

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.

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S&P/ASX 200 Index (ASX: XJO) shares are enjoying a good run on Monday, up 0.6% in afternoon trade.

The benchmark index is enjoying some tailwinds blowing from the United States after the S&P 500 (INDEXSP: .INX) closed up 1.2% on Friday to set a new record high.

And today’s advance comes atop the 1.0% gains posted by the ASX 200 on Friday.

US and Aussie stock markets have moved higher over the past two trading days despite slumping expectations that the Federal Open Market Committee (FOMC) will begin cutting interest rates at its next meeting in March.

As of Friday, consensus expectations for a March Fed interest rate cut had fallen below 50%.

Despite minutes from the central bank’s December policy meeting revealing that FOMC members think the improving outlook for inflation in the US will usher in lower rates, they also noted that the first rate cuts might not occur until “the end of 2024”.

Higher rates for longer would not only pressure US stocks, but also many ASX 200 shares vulnerable to elevated interest rate levels in the US.

In potentially good news to investors, however, Goldman Sachs believes the world’s most watched central bank is indeed likely to begin easing in March.

ASX 200 shares could get a March boost from the Fed

According to the analysts at Goldman Sachs (courtesy of The Australian Financial Review), “Despite a modest bump in December, inflation news remains very favourable, with global core inflation averaging just 2.0% annualised over the last three months.”

The broker is forecasting that core inflation figures will average an annualised 1.9% for the second half of 2023, ushering in rate cuts that should help support ASX 200 shares in 2024.

Goldman stated:

With the labour market and inflation expectations also back in balance, we expect the Fed to start cutting the funds rate soon, probably in March. We expect consecutive 25 basis point [0.25%] cuts in March, May, and June, followed by quarterly cuts from Q3 onwards (for a total of five cuts in 2024).

And with the US Fed having led other central banks in the charge towards higher rates, Goldman now expects those banks will follow the Fed’s lead lower.

“We expect both the European Central Bank and the Bank of England to closely follow with per-meeting cuts beginning in Q2, and to cut by 150bp each this year,” the broker said.

“Our expectation of significant cuts combined with resilient activity and falling inflation supports our above-consensus growth views in most major economies,” Goldman added.

The broker did not make any forecast for the RBA. But falling interest rates in the US and across Europe may at least keep Australia’s central bank for pushing through with another rate hike on 6 February.

Which would certainly be welcome news for investors in ASX 200 shares.

The post Buying ASX 200 shares? Here’s why Goldman Sachs expects a Fed interest rate cut in March 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
• Why Appen, Baby Bunting, Cooper Energy, and Liontown shares are sinking today
• Why 4DMedical, A2 Milk, QBE, and Zip shares are charging higher today
• ASX 200 mining stocks underperforming as Andrew Forrest shutters WA nickel mines
• Mineral Resources shares tumble 9% on unfavourable broker rating

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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Commonwealth Bank of Australia (ASX: CBA) shares are often seen as one of the best ASX bank shares. I’d agree with that assessment for a few different reasons, which I’ll explain in this article.

Investors have a lot of choice between banks on the ASX, such as ANZ Group Holdings Ltd (ASX: ANZ), Westpac Banking Corp (ASX: WBC) and National Australia Bank Ltd (ASX: NAB).

There are three key reasons why I think CBA is great.

Strong return on equity

For a bank, CBA has a solid return on equity (ROE). The ROE doesn’t directly say how good the CBA share price returns or dividends are going to be, but it’s a useful indicator.

The ROE tells us how much profit the business is making for how much shareholder money is retained in the company. If the ROE is increasing, that’s showing the business is making more profit for how much shareholder money is within the company, which is a promising sign.

In the 2023 annual result, CBA reported its ROE improved 130 basis points (1.30%) to 14% thanks to higher profits and lower share count. If CBA continued seeing an ROE of 14%, it’d suggest CBA would make a 14% return on the additional profit it retained, which is a good return.

Compare this to Westpac – in FY23 it reported ROE of 10.1%, considerably below CBA’s.

Good dividend record

CBA isn’t known for having a huge dividend yield compared to other ASX bank shares, partly because of its higher price/earnings (P/E) ratio.

But, I think the past four years have shown CBA’s ability and commitment to maintaining and growing the dividend as much as it can. The COVID-impacted year of 2020 saw a dividend cut of around 31%, but most years since 2010 have seen an increase, with the rest seeing the dividend maintained.

At the current CBA share price, it has a trailing grossed-up dividend yield of 5.6%. That’s better than what someone can get from a term deposit from CBA.

Business growth

CBA has built up a large market share in household lending and deposits.

The biggest ASX bank share is looking to grow in business lending. The commercial banking side of the Australian loan system is large and offers a lot of growth potential for CBA, if it can grow its market share here.

This was evident when CBA reported in the first quarter of FY24 when it said that its business lending grew by 11.4% or $14.5 billion in dollar terms. This was 1.4 times the overall lending system, which means it’s gaining market share in that sector.

If CBA can keep growing at a good pace in this area, it means the business can unlock stronger profits and put money towards an area where it can leverage its scale.

Foolish takeaway

There is a lot to like about CBA shares, but the one thing I’m wary of is the valuation. It’s now valued at 20 times FY24’s estimated earnings. That seems excessive, even if we allow for a bit of a premium between CBA and other ASX bank shares. I’d be happier to buy NAB shares for now because of their quality and lower valuation.

The post Why I think CBA is one of the best ASX bank shares appeared first on The Motley Fool Australia.

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More reading

• I’m buying cheap ASX shares to build my wealth in 2024 and beyond
• 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
• ANZ shares breach 52-week record amid merger expectations

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.

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The S&P/ASX 200 Index (ASX: XJO) is having another solid session on Monday. In afternoon trade, the benchmark index is up 0.6% to 7,465.8 points.

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

Appen Ltd (ASX: APX)

The Appen share price is down 39% to 28 cents. Investors have been selling this artificial intelligence (AI) data services provider’s shares after tech giant Google terminated its contract with the company. This contract generated almost a third of its revenue in the recently completed FY 2023. Investors appear concerned that this could be the nail in the coffin for the struggling company.

Baby Bunting Group Ltd (ASX: BBN)

The Baby Bunting share price is down 5% to $1.72. This morning, this baby products retailer released a half year trading update. It expects to report a 2.5% decline in sales to $248.5 million and a 31.3% reduction in pro forma net profit after tax to $3.5 million.

Cooper Energy Ltd (ASX: COE)

The Cooper Energy share price is down 26% to 10.7 cents. This follows the release of an update on the costs related to the BMG wells decommissioning programme. Management notes that the mid case cost estimate is increased to $240 million to $280 million (from $193 million to $198 million).

Liontown Resources Ltd (ASX: LTR)

The Liontown share price is down 21% to 94.2 cents. Investors have been selling this lithium developer’s shares following the release of a disappointing update on the Kathleen Valley Lithium Project. Due to weak lithium prices, the company has commenced a review of the planned expansion and associated ramp-up of Kathleen Valley to preserve capital and reduce the near-term funding requirements of the Project. In addition, a recently announced $760 million debt funding package has been terminated due to lithium price weakness.

The post Why Appen, Baby Bunting, Cooper Energy, and Liontown shares are sinking today appeared first on The Motley Fool Australia.

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More reading

• Mineral Resources shares tumble 9% on unfavourable broker rating
• Why are Liontown shares crashing 26% on Monday?
• Appen shares crash 37% on huge Google blow
• 3 ASX small-cap shares I’d buy for the long-term
• These are the 10 most shorted ASX shares

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. 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 Alphabet and Appen. The Motley Fool Australia has recommended Alphabet. 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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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record another decent gain. At the time of writing, the benchmark index is up 0.6% to 7,465.8 points.

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

4DMedical Ltd (ASX: 4DX)

The 4DMedical share price is up 4% to 64.5 cents. This morning, the respiratory imaging technology company announced a commercial agreement with leading global healthcare company, Koninklijke Philips N.V. (NYSE: PHG). The two parties will establish a strategic collaboration to advance solutions to evaluate Veterans with deployment-related respiratory disease (DRRD), interstitial lung disease (ILD), and other respiratory illnesses in North America.

A2 Milk Company Ltd (ASX: A2M)

The A2 Milk share price is up 4% to $4.50. This appears to have been driven by a positive broker note out of Citi this morning. Its analysts are feeling positive about the infant formula company’s upcoming half-year results. So much so, it sees upside risk to sales expectations. Citi has a buy rating and $4.81 price target on its shares.

QBE Insurance Group Ltd (ASX: QBE)

The QBE share price is up 2% to $15.60. This morning, Goldman Sachs retained its buy rating and $18.52 price target on this insurance giant’s shares. The broker highlights that industry peer Travelers Companies Inc (NYSE: TRV) smashed expectations during the fourth quarter. It believes this bodes well for QBE’s performance during the quarter.

Zip Co Ltd (ASX: ZIP)

The Zip share price is up 13% to 71.7 cents. Investors have been buying this buy now pay later provider’s shares after it delivered a strong quarterly update. Zip reported an 8.5% lift in transaction value over the prior corresponding period to $2.8 billion. And thanks to an improvement in its revenue margin to 8.2%, Zip’s revenue was up 26.1% to $225.6 million for the quarter. Management also revealed that first half group cash EBTDA is expected to be between $29 million and $33 million.

The post Why 4DMedical, A2 Milk, QBE, and Zip shares are charging higher today appeared first on The Motley Fool Australia.

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More reading

• Leading brokers name 3 ASX shares to buy today
• Zip shares rocket 17% on ‘outstanding’ quarter
• Here are the top 10 ASX 200 shares today
• Here are the top 10 ASX 200 shares today
• 3 ASX dividend stocks to boost your income portfolio in 2024

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 Zip Co. The Motley Fool Australia has recommended A2 Milk. 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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S&P/ASX 200 Index (ASX: XJO) mining stocks are underperforming the benchmark on Monday.

This comes amid news that Andrew “Twiggy” Forrest is temporarily shuttering the West Australian nickel mines at his privately owned company Wyloo, pressuring other mining companies with nickel operations.

In early afternoon trade today the ASX 200 is up 0.7%.

As for the big three ASX 200 mining stocks:

• Fortescue Metals Group Ltd (ASX: FMG) shares are down 0.1%
• BHP Group Ltd (ASX: BHP) shares are up 0.2%
• Rio Tinto Ltd (ASX: RIO) shares are down 0.3%

Here’s what’s happening.

Headwinds for ASX 200 mining stocks

As The Australian Financial Review reports, Wyloo, which Forrest acquired for $760 million in mid-2023, will enter care and maintenance at the end of May.

That news looks to be pressuring ASX 200 mining stocks amid ongoing weakness in the nickel price.

As we reported over the weekend, nickel prices have fallen some 50% over the past 12 months as supplies from both Indonesia and Russia have ramped up. However, the nickel produced by both of those nations, while selling for a cheaper price, also comes with a much larger environmental footprint.

And that’s something that Forrest wants to change, seeking a global distinction between so-called clean nickel and the “dirty nickel” that comes from Indonesia. A distinction that could, if adopted, benefit ASX 200 mining stocks that produce the metal under higher ESG standards.

Commenting on the nickel markets last week, Wyloo Metals CEO Luca Giacovazzi said:

The industry needs a more appropriate and transparent pricing mechanism, that distinguishes between clean and dirty nickel, so consumers can be confident their EV really is a better choice for the environment.

Over the weekend Giacovazzi upped his criticism of “pollutive nickel”.

“The LME [London Metals Exchange] is awash with pollutive nickel, which is squeezing out clean nickel from Australian producers,” he said (quoted by the AFR).

“We need to see structural change in nickel pricing that distinguishes between nickel products as well as their ESG credentials,” he added.

However, this is likely not an end to nickel mining operations at Wyloo, but rather a pause.

According to Giacovazzi:

The decision to temporarily pause our operations in the current nickel market will allow us to develop and assess these options as we move towards our long-term strategy to mine and process nickel from our own facilities in Kambalda and Kwinana.

It’s not just Wyloo

While revenue from nickel is only a fraction of what iron ore brings in for ASX 200 mining stocks like BHP, Rio Tinto and Fortescue, the impact of cratering prices shouldn’t be discounted.

At BHP’s quarterly production update, released last week, the company noted, “At Nickel West, we are evaluating options to mitigate the impacts of the sharp fall in nickel prices.”

The ASX 200 mining stock’s quarterly nickel production was up 4% to 40,000 tonnes. But the average realised price of US$18,602 per tonne it received for the metal was down 24%.

The post ASX 200 mining stocks underperforming as Andrew Forrest shutters WA nickel mines appeared first on The Motley Fool Australia.

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More reading

• How I invest and make money from ASX mining shares
• The iron ore price is falling, is now a good time to buy Rio Tinto shares?
• Top brokers name 3 ASX shares to buy next week
• Why the BHP share price has a nickel thorn in its side
• 3 ASX 200 dividend shares I think you could safely hold for decades

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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With so many shares to choose from on the ASX, it can be difficult to decide which ones to buy. The good news is that brokers across the country are doing a lot of the hard work for you.

Three top ASX shares that leading brokers have named as buys this week are listed below. Here’s why they are bullish on them:

Arcadium Lithium (ASX: LTM)

According to a note out of Bell Potter, its analysts have initiated coverage on this lithium miner’s shares with a buy rating and $12.10 price target. The broker is a fan of Arcadium Lithium, which is the result of the Allkem-Livent merger, due to it having the largest, most diversified exposure to lithium. The Arcadium Lithium share price is trading at $7.53 today.

Macquarie Technology Group Ltd (ASX: MAQ)

A note out of Goldman Sachs reveals that its analysts have retained their buy rating and $77.70 price target on this data centre, cloud, cyber security, and telecom company’s shares. It notes that the company’s development application for the IC3 Super West data centre at its Macquarie Park campus has been approved. The broker sees this as an important milestone in the acceleration of the company’s data centre growth ambitions. The Macquarie Technology share price is fetching $72.32 this afternoon.

QBE Insurance Group Ltd (ASX: QBE)

Another note out of Goldman Sachs reveals that its analysts have retained their buy rating and $18.52 price target on this insurance giant’s shares. This follows the release of an update from industry peer Travelers Companies Inc (NYSE: TRV). Goldman notes that Travelers smashed its expectations during the fourth quarter. It believes this bodes well for QBE’s performance during the quarter. The QBE share price is trading at $15.62 on Monday.

The post Leading brokers name 3 ASX shares to buy today appeared first on The Motley Fool Australia.

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More reading

• Why Arcadium Lithium shares could rise 50% from today
• 5 things to watch on the ASX 200 on Monday
• Why are Arcadium Lithium shares down 17% since trading commenced?
• 3 ASX dividend stocks to boost your income portfolio in 2024
• Why Arcadium Lithium, BHP, Core Lithium, and Magellan shares are falling today

Motley Fool contributor James Mickleboro owns Arcadium Lithium shares. 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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Knowing when, and how much, to invest in ASX shares can be a tricky process. On one hand, we’re told to invest in cheap ASX shares by ‘buying low’ and ‘selling high’. But on the other, we’re told not to ‘time the markets’ and that ‘time in the market beats timing the market’.

So how does one reconcile these two seemingly opposed pieces of advice?

Well, to hopefully shed some light on this question, let’s discuss how I’m planning on investing in 2024.

I’m an investor who loves getting quality ASX shares for cheap, bargain basement prices. It was Warren Buffett who told us that price and value aren’t the same thing on the stock market. His exact quote was “price is what you pay, value is what you get”. So if you do manage to snag a cheap ASX share below what it’s actually worth, you’re doing something right.

His late, great business partner, Charlie Munger, expanded on this by stating that, “No matter how wonderful a business is, it’s not worth an infinite price”. So these two great men are clearly telling us that successful investing involves looking out for quality businesses that are also cheap shares.

However, there are periods when the market is booming and cheap ASX shares become harder and harder to find. Investors like Buffett typically stop buying shares altogether during these periods.

How to build wealth by buying cheap ASX shares

Saying that, I think that most of us mere mortals shouldn’t do this because it is a form of market timing. Buffett is an investing master, so he can afford to do as he sees fit. But market timing doesn’t work well for the vast majority of other investors.

So here’s what I do. I have a list of quality ASX shares that I’d be happy to load up on at the right price. Often, at least one of these ASX shares is cheap, or at least going for a reasonable value, at any given moment. So if I have funds to spare for my investing portfolio, that’s where I’ll put them.

Some of my favourite names include Washington H. Soul Pattinson and Co Ltd (ASX: SOL), National Australia Bank Ltd (ASX: NAB), Wesfarmers Ltd (ASX: WES) and CSL Limited (ASX: CSL). I might also consider some US shares too, such as Apple Inc (NASDAQ: AAPL), Adobe Inc (NASDAQ: ADBE) or Airbnb Inc (NASDAQ: ABNB). Perhaps even Buffett’s own Berkshire Hathaway Inc (NYSE: BRK.A)(NYSE: BRK.B)

However, if there are no cheap ASX shares that take my fancy, I invest the money in index funds instead. I think putting extra cash in an index fund like the Vanguard Australian Shares Index ETF (ASX: VAS) or the Vanguard MSCI Australian Small Companies ETF (ASX: VSO) is a better long-term bet than leaving it in the bank.

This is how I’ll continue to invest in 2024. I’ll look for cheap ASX shares, and if that fails, I’ll turn to some trusty index funds. In my view, this investing strategy is a good bet for building long-term wealth.

The post I’m buying cheap ASX shares to build my wealth in 2024 and beyond appeared first on The Motley Fool Australia.

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More reading

• How I’d create investment cash flow in retirement from ASX ETFs
• Experts tip very big returns from these outstanding ASX 200 blue chip shares
• Top ASX shares to buy in 2024 instead of investing in a term deposit
• 5 excellent ASX ETFs to buy when the market reopens
• Which had the better year in 2023: Telstra, Woodside or Wesfarmers shares?

Motley Fool contributor Sebastian Bowen has positions in Adobe, Airbnb, Apple, Berkshire Hathaway, CSL, National Australia Bank, Vanguard Australian Shares Index ETF, Vanguard Msci Australian Small Companies Index ETF, Wesfarmers, 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 Adobe, Airbnb, Apple, Berkshire Hathaway, CSL, Washington H. Soul Pattinson and Company Limited, and Wesfarmers. The Motley Fool Australia has positions in and has recommended Washington H. Soul Pattinson and Company Limited and Wesfarmers. The Motley Fool Australia has recommended Adobe, Airbnb, Apple, Berkshire Hathaway, and CSL. 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 South32 Ltd (ASX: S32) share price is down 3% after the ASX mining share delivered its update for the period ending 31 December 2023, including its production numbers.

Production performance

South32 revealed how its production performed for all of its commodities in the second quarter of FY24 and the first half of FY24 (HY24).

Alumina production was 1,284kt in the second quarter, flat quarter over quarter. HY24 saw a 1% drop year over year in alumina production to 2,574kt.

Aluminium production was 287kt for the second quarter and flat quarter over quarter. In HY24, aluminium production of 575kt was up 1% year over year.

Payable copper production was 15.6kt in the FY24 second quarter, down 3% quarter over quarter. The HY24 copper production was 31.6kt, a drop of 17% year over year.

Payable silver production was 3,624kt for the FY24 second quarter, up 7% quarter over quarter. The HY24 silver production was 6,999k ounces, an increase of 20% year over year.

Payable lead production in the FY24 second quarter was 30.3kt, up 6% quarter over quarter. The HY24 lead production was 58.8kt, up 12% year over year.

Payable zinc production for the FY24 second quarter was 15.8kt, up 20% quarter over year. HY24 zinc production was down 5% year over year to 29kt.

Payable nickel production in the FY24 second quarter was 10kt, up 20% quarter over quarter. HY24 production of nickel amounted to 18.3kt, down 10% year over year.

Metallurgical coal production in the FY24 second quarter was 744kt, down 29% quarter over quarter. HY24 coal production of 1,787kt was down 35% year over year.

Manganese ore production for the FY24 first quarter was 1,272k wet metric tonnes (wmt), down 16% quarter over quarter. HY24 manganese ore production was 2,790k wmt, down 5% year over year.

Production (and guidance) can obviously have an impact on the South32 share price.

Guidance and costs

A highlight, or lowlight, of the update was that South32 reduced its FY24 group copper equivalent production guidance by 3%, reflecting “revised guidance for Brazil Alumina, Mozal Aluminium and molybdenum output from Sierra Gorda.”

However, it also said it’s well-positioned to capture the benefit of improved market conditions through expected production growth of 7% in the second half of FY24 and its ongoing focus on cost efficiencies.

South32 reported its FY24 first-half operating unit costs are expected to be “in line or below” FY24 guidance for the majority of its operations.

The business has been progressing with a group-wide review focused on “delivering a reduction in expenditure in FY24 and FY25 through cost efficiencies and capital prioritisation.”

Management comments

The South32 CEO Graham Kerr said:

As we enter the second half, strengthening market conditions for many of our commodities, our planned 7 per cent production growth and ongoing cost management focus, position us well to capture higher margins.

We continued to invest to increase our exposure to commodities critical to a low-carbon future. At our Hermosa project, we progressed critical path infrastructure and remain on track to make a final investment decision for the Taylor zinc-lead-silver deposit in the March 2024 quarter. Sierra Gorda also continued work on the fourth grinding line expansion project, which has the potential to sustainably increase copper production.

South32 share price snapshot

Over the last 12 months, South32 shares have dropped around 30%.

The post South32 share price falls after disappointing December update appeared first on The Motley Fool Australia.

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More reading

• The 8 ASX mining stocks Goldman Sachs says are buys in 2024
• Here are the top 10 ASX 200 shares today
• Why Avita Medical, Core Lithium, Silex, and South32 shares are storming higher today
• Goldman Sachs just upgraded another ASX 200 mining stock: Can you guess which one?
• 5 things to watch on the ASX 200 on Thursday

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.

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