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I have a main job already, but I have a goal of achieving strong dividend income from ASX income shares. If it grows enough, it could be a pleasing second income for me.

There are plenty of ASX blue-chip shares that have quite high dividend yields, such as Commonwealth Bank of Australia (ASX: CBA) and BHP Group Ltd (ASX: BHP). They offer much higher yields than the iShares S&P 500 ETF (ASX: IVV), which only has a 1.35% dividend yield.

Investors can do just fine with an index-tracking exchange-traded fund (ETF) such as Vanguard Australian Shares Index ETF (ASX: VAS).

But, I think there are a group of ASX income shares that can deliver a combination of good dividends and compounding growth.

Building a second income

Metcash Ltd (ASX: MTS) owns brands such as Mitre 10, Home Timber & Hardware, and Total Tools, while supplying businesses such as IGA, Bottle-O and Cellarbrations. It could pay a grossed-up dividend yield of around 8% in FY23 according to Commsec.

Premier Investments Limited (ASX: PMV) has a number of retail brands including Smiggle, Peter Alexander, Just Jeans and Jay Jays. It’s projected to pay a grossed-up dividend yield of around 7% in FY23 according to Commsec.

Shaver Shop Group Ltd (ASX: SSG) owns a network of stores selling hair removal products. It’s valued at just 8 times FY23’s estimated earnings with a grossed-up dividend yield of around 14%.

Adairs Ltd (ASX: ADH) operates three different brands – Mocka, Focus on Furniture and Adairs, selling furniture and homewares. According to Commsec, it’s valued at just 8 times FY23’s estimated earnings with a grossed-up dividend yield of 10.6%.

Bailador Technology Investments Ltd (ASX: BTI) is a tech investment business that is invested in a whole group of fast-growing tech companies. It has an expected grossed-up dividend yield of 7.8% at the current valuation.

If I invested the $20,000 equally between these ASX income shares, meaning $4,000 in each, we’d get an average dividend yield of around 9.5%. In the first year, that would be a cash payment of $1,900. That’s short of my target of at least $6,000, but I wasn’t expecting to be able to make $6,000 passive income from a $20,000 investment – that’d be a yield of 30%.

Long-term dividend re-investment

Compounding can play a key role in the future. Re-investing the dividends we receive can build the portfolio value and dividend income.

Let’s assume I re-invest all the dividends and franking credits, but ignore the effects of dividend growth, share price growth and tax owed to the ATO to keep the calculation as simple as possible.

After 15 years, it could grow into a $78,000 portfolio. The portfolio would only need to yield 7.7% to generate $6,000 of annual passive income. That’d be a solid second income after 15 years, from just the original $20,000.

There’s also a danger that there could be dividend cuts and is worth noting that inflation can hurt the value of that income.

But, hopefully there would be plenty of dividend growth from the names I named above. This could help the second income grow even higher than my back-of-an-envelope calculation.

The post How I’d try to turn a $20k ASX share portfolio into a second income of $6,000 a year appeared first on The Motley Fool Australia.

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More reading

• 2 ASX dividend shares with seriously huge payouts
• Top ASX passive income shares to buy in May 2023
• Retirees: How you could earn $705 a month in ASX dividends with less than $100K in savings
• 2 small-cap shares I rate to beat the ASX 200 in 2023 (and beyond)
• 6 excellent ASX 200 dividend shares that aren’t banks or miners

Motley Fool contributor Tristan Harrison has positions in Bailador Technology Investments. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Adairs and Bailador Technology Investments. The Motley Fool Australia has positions in and has recommended Adairs. The Motley Fool Australia has recommended Bailador Technology Investments, Metcash, Premier Investments, and iShares S&p 500 ETF. 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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A little-known ASX mining stock is setting the bar high today.

Very high.

The All Ordinaries Index (ASX: XAO) is down 0.29% in afternoon trade, following on weakness in US markets on Friday.

But this junior mining share is up a whopping 126% after reporting on a new lithium discovery.

Any guesses?

If you said Voltaic Strategic Resources Ltd (ASX: VSR), give yourself a gold star. And I hope you held shares before market open today!

With today’s big intraday boost factored in, the ASX mining stock is now up a tidy 160% since this time last week.

Here’s what the company reported this morning.

Lithium discovery spurs investor interest in junior ASX mining stock

Voltaic announced that it has completed its maiden drill campaign at the Andrada prospect, Ti Tree project in Western Australia, ahead of schedule.

The ASX mining stock said it had intercepted several thick (up to 60 metre) pegmatite bodies down-dip from surface, which it labelled “highly encouraging”.

The early stage drilling confirms key structural trends that are associated with favourable lithium, caesium, tantalum (LCT) pegmatoids in close proximity to granitic contacts.

Assays are expected in about six weeks.

Voltaic highlighted the potential to increase the scale of its Andrada prospect. The prospect sits within the 212 square kilometre Ti Tree Project and hosts some 300 mapped pegmatites from surface. So far, less than 10% of the tenure has been explored.

Commenting on the results sending the ASX mining stock soaring today, CEO Michael Walshe said, “We now have a much-improved model of the regional pegmatites at Ti Tree in terms of structure, down-hole continuity and zonation, all of which are critical data for vectoring towards an LCT discovery.”

Walshe added:

Planning is also underway for a follow-up second phase of drilling, and we will soon undertake several surveys including: airborne magnetics / radiometrics, photogrammetry, and gravity.

These programs should significantly increase the number of ‘priority 1’ drill targets at Ti Tree and ensure several months of highly active and material news flow over the remainder of 2023

Voltaic share price snapshot

The ASX mining stock is thinly traded on most days, though today is a notable exception.

With today’s big gains factored in, the Voltaic share price is up 200% in 2023. Or enough to turn a $1,000 investment into $3,000.

The post Guess which ASX mining stock is booming 126% on a new lithium discovery appeared first on The Motley Fool Australia.

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More reading

• No savings at 40? Here’s how I’d aim to build a passive income of $3,000 a month
• 3 ASX lithium shares to buy right now: Wilsons
• Up 6%, guess which ASX 200 stock is the best performing so far today
• Why did Warren Buffett sell this global tech giant after only a few months?
• What’s the outlook for the Zip share price in May?

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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How does $3,000 of monthly passive income sound? If you’re anything like me, you’d answer ‘appealing’. That’s why I’ve come up with a plan to build such an income stream by investing in S&P/ASX 200 Index (ASX: XJO) dividend shares.

Aussie stocks offer notably attractive dividend yields. I reckon that by buying a handful of the bourse’s average performers – or an exchange-traded fund (ETF) offering diverse exposure – I could realise such an income stream in just a few decades. And it wouldn’t take a huge nest egg to get started.

Creating – strategy

The first step I’d take on my passive income journey is perhaps the least exciting – budgeting. By creating a budget, I can easily identify what I spend on, where I could cut down on my spending, and how much spare cash I could use to better my financial position every month.

From there, I’d use my spare cash to pay down any high-interest loans and build a small financial safety net. Then, and only then, would I consider buying ASX 200 shares for passive income.

Building a portfolio of ASX 200 dividend shares

Let’s say I found I could easily invest $750 every month.

I reckon that by doing so consistently, starting at age 40, I could boast $3,000 of monthly passive income by the time I reach the Australian retirement age.

What would be my secret weapon? Compounding.

As of the end of April, the average ASX 200 share could pay out 4.61% of its value in the form of dividends each year, according to S&P Global data. That figure is known as a dividend yield.

If I could invest $750 a month, realise a consistent 4.61% yield, and reinvest all the dividends I receive in that time, I think my portfolio could compound to be worth close to $410,000 in 25 years time, before considering any potential share price gains. Take a look:

Years	Amount invested	Portfolio value
1	$9,000	$9,785
5	$45,000	$50,284
10	$90,000	$112,339
15	$135,000	$190,077
20	$180,000	$287,465
25	$225,000	$409,468

Of course, that hinges on receiving a 4.61% dividend yield – a factor I can’t guarantee. Further, my sums fail to consider costs like brokerage fees or any potential tax implications.

However, I don’t believe such costs would eat into my returns at such a rate to make my strategy undeserving.

Realising $3,000 of monthly passive income

So, I’ve built a near-$410,000 portfolio of ASX 200 shares – how do I realise $3,000 of monthly passive income?

Well, there are two strategies I might consider. The first is simply living off dividend income.

A $410,000 portfolio with a 4.61% yield could bring in $18,900 of dividends each year – or $1,575 a month. If I reshuffled my investments into higher-yielding stocks, however, I might earn more passive income.

For instance, $410,000 invested equally across ASX 200 shares Whitehaven Coal Ltd (ASX: WHC) and Harvey Normal Holdings Ltd (ASX: HVN) could bring in $38,100 of annual dividends right now, or $3,174 of monthly passive income.

The stocks boast respective dividend yields of 10.25% and 8.33% at the time of writing.

Another passive income strategy I could consider is the 4% rule. It assumes a portfolio will grow at around 4% each year.

Thus, an investor could theoretically withdraw 4% of their portfolio each year – equating to $16,400 a year, or $1,370 a month, for a $410,000 portfolio.

Though, past performance isn’t an indication of future performance, and no investment is guaranteed to provide returns or protection against downturns.

The post No savings at 40? Here’s how I’d aim to build a passive income of $3,000 a month appeared first on The Motley Fool Australia.

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More reading

• What’s going wrong for ASX 200 share A2 Milk today?
• Why is everyone talking about IAG shares on Tuesday?
• I’d invest $10,000 into these excellent ASX shares for the long-term
• 5 things to watch on the ASX 200 on Tuesday
• Here are the top 10 ASX 200 shares today  

Motley Fool contributor Brooke Cooper 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 Harvey Norman. The Motley Fool Australia has positions in and has recommended Harvey Norman. 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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These three ASX lithium shares have all risen in the last month, but could they go higher?

Atlantic Lithium Ltd (ASX: A11), Leo Lithium Ltd (ASX: LLL), and Ioneer Ltd (ASX: INR) shares could all be a buy, according to analysts.

Let’s take a look at these three ASX lithium shares in more detail.

Atlantic Lithium

Atlantic Lithium shares have surged 13% in the last month. The company’s share price is up nearly 3% so far today. For perspective, the S&P/ASX 200 Materials Index (ASX: XMJ) is down 0.15%.

Analysts at Wilsons have put an “overweight” rating on the Atlantic Lithium’s share price, The Australian reported.

Atlantic is developing the Ewoyaa lithium project in Ghana, West Africa. The company has a funding partnership with Piedmont Lithium Inc (ASX: PLL) for this project. Piedmont currently has a 9.39% stake in Atlantic Lithium.

In a presentation released to the market today, Atlantic Lithium noted Ewoyaa has a Mineral Resources estimate of 35.3 million tonnes at 1.25% lithium oxide. A process to gain a mining lease is currently underway.

Atlantic Lithium shares have dropped nearly 6% in 2023 so far but have gained 1% in the last 12 months.

Leo Lithium

Leo Lithium shares have soared nearly 31% in the last month and are up a robust 5.13% today. The company’s shares price has also just received an “overweight” rating from Wilsons.

Leo Lithium is developing the Goulamina Lithium Project in Mali, West Africa. Recent assay results in April revealed “high grade, thick intercept” results. Mineralisation is open at depth and along strike. The company expects to provide a Mineral Resource Estimate before the end of June.

In a recent quarterly report, Leo Lithium said construction activities are “ramping up” on schedule.

Leo Lithium shares have soared 28% in the year to date but have fallen 11% from the same time last year.

Ioneer

Ioneer shares have risen 22% in the last month but are down nearly 3% at the time of writing. Again, analysts at Wilsons have placed an overweight rating on Ioneer.

The company is developing the Rhyolite Ridge lithium and boron project in Nevada, United States.

In late April, Ioneer advised the mineral resource at Ioneer has lifted by 168% to 3.4 million tonnes of lithium carbonate. The company said:

Rhyolite Ridge is ideally placed to play a pivotal role in the electrification of transportation in the U.S.

Ioneer has released a conditional commitment for a US$700 million loan on the Rhyolite project from the US Department of Energy.

Looking at the outlook for the lithium carbonate price, Morgan Stanley strategists recently advised lithium markets could be at a “at a turning point“. Analysts noted China’s lithium carbonate prices have lifted 30% from their recent lows, while hydroxide prices have jumped 20%.

Ioneer shares have slid 32% in a year and nearly 7% in the year to date.

The post 3 ASX lithium shares to buy right now: Wilsons appeared first on The Motley Fool Australia.

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More reading

• Why Corporate Travel, Leo Lithium, Regis Resources, and Whitehaven Coal are charging higher

Motley Fool contributor Monica O’Shea 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 (ASX: XJO) stocks are down 0.3% at lunchtime on Tuesday, but as always, there are outliers.

Today, ASX healthcare stock Imugene Limited (ASX: IMU) is leading the ASX 200 with its share price up 6% to 12 cents.

The immuno‐oncology biotech hasn’t released any announcements to the market today.

However, Imugene released some price-sensitive news last week, so let’s look at that.

What’s pushing this ASX 200 stock higher?

Imugene is a biotech ASX 200 stock. The company is developing immunotherapies to treat and kill cancerous tumours and is currently conducting several clinical trials.

Last week Imugene announced that its onCARlytics technology was featured in an abstract ahead of the American Society of Gene and Cell Therapy’s Annual Meeting (ASGCT) on 16 May to 20 May.

An abstract is essentially a pitch to conference organisers in the hope of a formal invitation to present at the conference itself.

Opportunities to present at medical conferences are important for rising biotechs like Imugene.

These events can garner interest from new investors and potential future customers (i.e., the attending medical practitioners.)

The abstract outlined the effectiveness of combination immunotherapy using Imugene’s onCARlytics technology together with Eureka Therapeutics’ Artemis T cell platform to treat hepatocellular carcinoma (HCC).

HCC is the most primary type of liver cancer and the sixth most common cancer in the world.

In a statement, Imugene said:

While hepatocellular carcinoma (HCC) has systemic therapies and curative treatment options, CD19 targeting CAR T cell therapy has shown positive clinical outcomes, despite some ongoing challenges in bringing effective results into solid cancers.

… the combination strategy can be applied to otherwise target-less tumours such as HCC, and this shows the potential this could be applicable to a wide array of solid cancers as an effective immunotherapy approach.

Imugene has presented at several conferences already in 2023.

They include the prestigious J.P. Morgan Healthcare Conference, which attracts thousands of global investors every year.

Imugene has also presented at the ASCO Gastrointestinal Cancers Symposium and the NWR Healthcare Conference.

Imugene share price snapshot

This ASX 200 stock is down 13% in 2023 while the S&P/ASX 200 Health Care Index (ASX: XHJ) is up 8%.

The post Up 6%, guess which ASX 200 stock is the best performing so far today appeared first on The Motley Fool Australia.

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More reading

• What’s going wrong for ASX 200 share A2 Milk today?
• Why is everyone talking about IAG shares on Tuesday?
• I’d invest $10,000 into these excellent ASX shares for the long-term
• 5 things to watch on the ASX 200 on Tuesday
• 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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One of the biggest events on the investing calendar has just occurred. The annual shareholders meeting of Berkshire Hathaway Inc (NYSE: BRK.A)(NYSE: BRK.B) was held over the weekend in the US state of Nebraska. Berkshire Hathaway is, of course, the American behemoth helmed by legendary investor Warren Buffett.

Known as the ‘Woodstock for capitalists’, this meeting is typically one of the most talked about events of the year. And it’s not just American investors, but financially interested people from all over the planet (hence why we are talking about it here at the Motley Fool Australia).

Warren Buffett commands the world stage yet again

Buffett, as well as his right-hand man Charlie Munger, usually spend hours answering all manner of questions from an enraptured audience. That’s despite both men being in their 90s. Here at the Fool, we’ve already discussed some of the major takeaways from this meeting. But today, let’s talk about why Buffett has just sold a major investment after only holding it for a few months.

Warren Buffett is well known for his long-horizon, buy-and-hold investing methods. He once famously said that his favourite period to own a share was “forever”. He has demonstrated a tangible commitment to this principle in real life. Berkshire has held companies like Coca-Cola Company (NYSE: KO) and American Express Company (NYSE: AXP) for many decades.

So it sticks in the craw somewhat that Buffett purchased more than US$4 billion worth of Taiwan Semiconductor Manufacturing Co Ltd (NYSE: TSM) stock last year, only to offload most of the stake within a few months. Berkshire still appears to hold a small portion of the original investment. But it is only a fraction of the original purchase.

Taiwan Semiconductor Manufacturing Co (TSMC) is often described as one of the most important companies in the world. It designs and manufactures the vast majority of the world’s supply of semiconductor chips. These chips are used in almost every complex electronic device, including computers, home appliances, cars, and smartphones.

In Berkshire’s annual general meeting, Buffett was asked why he had sold most of Berkshire’s TSMC holding after only a few months.

TSMC: An usually short investment for Berkshire Hathaway

Buffett stated that he believes “Taiwan Semiconductor is one of the best-managed companies and important companies in the world, and you’ll be able to say the same thing five, ten or 20 years from now”.

However, he also said this:

I don’t like its location, and I reevaluated that…. I feel better about the capital that we’ve got deployed in Japan than in Taiwan. I wish it weren’t so, but that’s the reality, and I reevaluated that in light of certain things that were going on.

Buffett is probably alluding here to the fact Taiwan is one of the focal points in the geopolitical rivalry between the United States and China. Taiwan has been an independent and self-governed territory since the end of the Chinese Civil War in 1949.

However, the Chinese Communist Party still claims Taiwan and its territory as a province of the People’s Republic of China. That’s despite never actually controlling it.

The military assistance the US provides to the Taiwanese government is one of the central points of tension between the two countries. China has threatened to go to war to reclaim the island territory if peaceful unification fails.

Most of TSMC’s advanced foundries are located on the island of Taiwan itself. So this is probably what is spooking Buffett.

So it just goes to show that global geopolitics matters in investing. Buffett clearly loves TSMC as a company. But even so, its location alone has prompted him to distance Berkshire from investing in it.

The post Why did Warren Buffett sell this global tech giant after only a few months? appeared first on The Motley Fool Australia.

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More reading

• Invest like Warren Buffett with this ASX share to grow your wealth enormously
• Worried about the market? 2 ASX dividend stocks that could help you sleep at night
• Worried about a recession? Here’s why these investors are backing Warren Buffett
• How to get rich by following Warren Buffett’s advice
• Which stocks does Warren Buffett own (and what can ASX 200 investors learn from this)?

American Express is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Sebastian Bowen has positions in American Express, Berkshire Hathaway, and Coca-Cola. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Berkshire Hathaway and Taiwan Semiconductor Manufacturing. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2024 $47.50 calls on Coca-Cola. The Motley Fool Australia has recommended Berkshire Hathaway. 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 Zip Co Ltd (ASX: ZIP) share price is down 1% so far in May.

Which also happens to be how much the ASX buy now, pay later (BNPL) stock is down in intraday trading today.

With the Zip share price having dropped 9% in April, stockholders will certainly be hoping for a better result in May.

So, what can investors expect?

What’s the outlook for the ASX BNPL share in May?

While short sellers tend to get it wrong as often as they get it right, the consistently high levels of short interest in Zip’s stock isn’t a strong endorsement for the outlook of the Zip share price.

In yesterday’s trading, short interest stood at 10.9%.

Short interest aside, on the plus side for the Zip share price in May, the company has already suffered through a 0.25% interest rate increase from the RBA and a matching increase from the US Federal Reserve this month.

With no more rate hikes on the cards in May, investors can at least breathe a sigh of relief on that front.

Zip also reported some strong quarterly results towards the end of April, which may help support the stock in the weeks ahead. Highlights included a 15% year-on-year increase in revenue, which reached $182 million.

And Zip could get some support in May from the company’s positive guidance. Management reported they have sufficient available cash and liquidity to get the stock back into profitability in the first half of the 2024 financial year.

Still, the Zip share price might well face more downside in May.

Potential headwinds could come amid any reports of further slowdowns in the Aussie or global economies, which could impact the company’s revenues.

And consumers stressed by high inflation and rocketing interest rates could drive further increases in credit losses for the ASX BNPL stock.

Then there’s the ongoing debate over new regulations for the industry. If the government comes out in May supporting the stricter options, which would see BNPL companies subject to similar regulations as credit card companies, that could see investors hitting the sell button.

Zip share price snapshot

It’s been a rough 12 months for the Zip share price, down 50% since this time last year.

So far in 2023, the ASX BNPL stock is down 10%.

The post What’s the outlook for the Zip share price in May? appeared first on The Motley Fool Australia.

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More reading

• Here are the 10 most shorted ASX shares
• Why did the Zip share price dump 9% in April?
• Short sellers reveal 4 ways to spot dud ASX shares
• Here are the 10 most shorted ASX shares
• The Zip share price is down 49% in a year. Here’s why I still won’t buy

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Zip Co. 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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Rio Tinto Ltd (ASX: RIO) shares are bucking the broader market selling trend today.

Shares in the S&P/ASX 200 Index (ASX: XJO) miner closed yesterday trading for $111.96. Shares are currently swapping hands for $112.50, up 0.5%.

While stockholders will welcome today’s lift, there could be some far larger gains ahead for Rio Tinto shares.

That’s according to Goldman Sachs.

The broker has a buy rating on Rio Tinto with a target price of $136.20. That represents a whopping 21% upside to the current Rio Tinto share price.

Five reasons the ASX 200 miner’s share price could surge

Rio Tinto doesn’t solely mine iron ore.

Although the industrial metal remains its biggest revenue earner, Rio also produces aluminium, copper, mineral sands, diamonds and lithium. And the ASX 200 miner owns some of the largest and lowest-cost mining operations in the world.

Rio’s recently reported first-quarter results revealed record Pilbara iron ore shipments of 82.5 million tonnes, up 16% year on year. The miner reported it was well positioned to meet the high end of its full-year production guidance range.

Which brings us to the first reason Goldman Sachs believes Rio Tinto shares could be poised to surge 21%: “compelling relative valuation”.

Rio trades at around 0.9 times its net asset value (NAV). That compares to around 1.0 times NAV for BHP Group Ltd (ASX: BHP) shares and around 1.5 times NAV for Fortescue Metals Group Ltd (ASX: FMG) shares.

The second reason Rio Tinto shares could leap higher over the year is the miner’s “strong free cash flow (FCF) and dividend yield”.

According to Goldman’s estimates for FY23 and FY24, “FCF/dividend yield in 2023E (c. 10%/7% yield) & 2024E (c. 7%/6% yield) driven by our bullish view on iron ore, aluminium and copper prices.”

The third reason Goldman is bullish on Rio is the forecast for strong production growth in 2023 and 2024.

According to the broker’s analysts:

Rio is a FCF and production growth story in our view, with forecast Cu Eq production growth of ~6-7% in 2023 & 2024 driven by the acquisition of TRQ, the Gudai-Darri iron ore mine ramp-up to nameplate in 2023 and a rebound in aluminium production post labour and equipment challenges.

Then there’s the turnaround at Pilbara, the fourth reason Rio Tinto shares could leap 21% higher.

Noting Pilbara represents approximately 50% of RIO’s NAV, Goldman said it’s optimistic about:

The potential for FCF/t improvement in the Pilbara in 2023 with Guida-darri and over the medium to long run driven by Rhodes Ridge, and RIO recently outlining a Pilbara turnaround story with a medium term capacity target of 345-360Mt by 2026 (GSe 350Mtpa by 2030 with Rhodes Ridge).

And the fifth reason Goldman is optimistic on the outlook for Rio is the miner’s “compelling high margin low emission aluminium exposure”.

The broker notes that, “Rio has the world’s highest margin low emission aluminium business, with over 2.2Mt of Ali production powered by hydro.”

How have Rio Tinto shares been tracking?

Rio Tinto shares are down 3% in 2023 as the big rebound in iron ore prices from the November lows has begun to reverse.

The ASX 200 miner’s share price is up 28% since iron ore hit recent lows on 1 November.

The post 5 reasons Rio Tinto shares could surge 21% appeared first on The Motley Fool Australia.

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More reading

• Brokers say these ASX 200 mining shares are top buys
• Why the iron ore price is ‘not out of the danger zone’
• Top ASX passive income shares to buy in May 2023
• The Rio Tinto share price dumped 7% in April. Here’s why
• 2 ASX 200 mining shares to buy for big dividends: analysts

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended 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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Shares in S&P/ASX 200 Index (ASX: XJO), former market darling A2 Milk Company Ltd (ASX: A2M) are tumbling on Tuesday. The fall comes amid news the company is undergoing an executive shakeup.

The heads of two of its segments – its USA business and Mataura Valley Milk – will step down, while other executives will be shuffled to fill newly-emptied positions.

The A2 Milk share price is tumbling 1.5% at the time of writing to trade at $5.27.

For comparison, the ASX 200 is also in the red today, falling 0.28%.

 Let’s take a closer look at the changes going down among the top dogs of A2 Milk.

Former market darling announces leadership shuffle

The A2 Milk share price is sliding today amid news the CEO of its USA business, Blake Waltrip, is stepping down, effective immediately. Waltrip has headed the business for seven years.

He will be succeeded by the current executive general manager of the company’s Australia and New Zealand (ANZ) arm, Kevin Bush. Bush’s new title will see him introduced as managing director of the USA business.

On account of Bush’s relocation, the company’s current chief strategy officer, Eleanor Khor, will take on extra responsibilities and a new title — managing director of ANZ and strategy.

Commenting on the news seemingly weighing on the company’s shares today, A2 Milk managing director and CEO David Bortolussi thanked Waltrip, continuing:

Blake has led the development of our USA business, successfully establishing the a2 Milk brand in the market, achieving nationwide distribution and expanding our product offering during that time.

I congratulate Kevin and Eleanor on their new roles and believe their leadership will make a difference to the growth and performance of our USA and ANZ businesses going forward.

But that’s not all.

CEO of Mataura Valley Milk Bernard May has also stepped down after seven years with the company.

His resignation sees John Roberts appointed as interim general manager at the business.

Roberts will support A2 Milk chief supply chain officer Chopin Zhang to transform the company’s supply chain. Their focus will be on developing its infant milk formula manufacturing capability and utilisation.

A2 Milk share price snapshot

Today’s slump is just the latest to dint the A2 Milk share price.

The stock is currently 22% lower than it was at the start of 2023. Though, it has gained 31% since this time last year.

Meanwhile, the ASX 200 has climbed 4% year to date and 2% over the last 12 months.

The post What’s going wrong for ASX 200 share A2 Milk today? appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper 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 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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Sayona Mining Ltd (ASX: SYA) shares are up 2.5% in early trading on Tuesday to 20.5 cents.

Today’s gains may be cold comfort to long-term investors who have watched the ASX lithium share fall 25% over the past year.

But one fundie reckons now is the time to either buy your first stake in this North American lithium and graphite developer, or do a little dollar-cost averaging if your Sayona Mining shares have lost value.

Why is this expert backing Sayona Mining shares for growth?

As reported by The Bull, Tom Bleakley of BW Equities says Sayona Mining shares are a buy.

Bleakley reasons that the company is growing its resource base in Australia and Canada “through an aggressive exploration campaign”.

Sayona reported its first lithium production at its North American Lithium (NAL) project in March. It was only 70 tonnes of spodumene concentrate though, so not a commercial amount.

The miner expects to generate its first saleable concentrate in July.

Bleakley says:

SYA recently announced commercial spodumene concentrate production had resumed at the jointly owned North American Lithium project in Quebec.

SYA is targeting annual production of 226,000 metric tonnes a year, with first commercial shipments expected in the third quarter of fiscal year 2023.

Three other analysts covering Sayona Mining shares on CMC Markets also rate the ASX mineral explorer a buy.

What’s been weighing on the share price?

Well, like all ASX lithium shares, Sayona has retreated alongside lithium commodity prices over the past year.

According to Trading Economics, the lithium carbonate price has fallen 60% since hitting a record high in November 2022. This is mainly because China shut down electric vehicle (EV) subsidies in January.

However, lithium prices appear to be rebounding following news out of Chile.

The world’s second-biggest lithium-producing country intends to nationalise its industry and take a controlling stake in all new producers.

Trading Economics analysis says this “is expected to hamper long-term output growth …”.

Since then, the lithium carbonate price has recorded its first sizeable increase since November. It rebounded to above US$26,000 per tonne and is now sitting at about US$26,400 per tonne.

During April, Sayona Mining shares lost 4.8% of their value while the ASX All Ords rose by 1.7%.

Sayona Mining actually had a lot of positive news for the market last month, but after each new announcement, the shares seemed to slip back down.

Sayona announced a “substantial rise” in the estimated pre-tax net present value (NPV) of its 75%-owned NAL project and Authier Lithium Project.

A definitive feasibility study (DFS) revealed an NPV of $2.2 billion. This represented a big increase in the project NPV compared with NAL’s pre-feasibility study (PFS) released to the market in May 2022.

The PFS gave NAL alone a $1 billion NPV.

The company also announced a major resource expansion for its Moblan Lithium Project to 51.4 million tonnes at 1.31% Li2O. This made the project “one of North America’s single largest lithium resources”.

Sayona Mining shares rose again after the company released its March quarter activities and cash flow report.

The post Down 25% in a year, why this fundie thinks you should buy Sayona Mining shares now appeared first on The Motley Fool Australia.

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More reading

• ‘Buying opportunity’: 2 ASX 200 mining shares ripe to snap up now
• Here are the 10 most shorted ASX shares
• The CEO has sold 4.5 million Sayona Mining shares in the past week. Is this a red flag?
• Why did the Sayona Mining share price sink 5% in April?
• Here are the 3 most heavily traded ASX 200 shares on Monday

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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