Tag: Motley Fool

The Core Lithium Ltd (ASX: CXO) share price is taking off today after the company reported a significant jump in its Finniss Lithium Operation’s mineral resource estimate. It’s been lifted to 30.6 million tonnes at 1.31% lithium oxide – a 62% improvement.

The Core Lithium share price is surging in response. The stock is currently up 5.14%, trading at 97.25 cents a share.

Let’s take a closer look at today’s news from the S&P/ASX 200 Index (ASX: XJO) lithium miner.

Core Lithium share price soars on 62% jump in resources

Core Lithium stock is in the green today as the company’s 2022 drilling campaign proves fruitful.

Results from the 39,600-metre drilling program have highlighted significant potential for mine life extension at the company’s flagship operation. Work is now underway to update its ore reserve estimate.

Additionally, the project’s measured and indicated resource categories have jumped 46% to 19.4 million tonnes at 1.37% lithium oxide.

The company previously revealed its BP33 deposit’s mineral resource estimate had more than doubled as a result of last year’s campaign.

Today, it reported that its Carlton, Han Gong, Sandras, and Ah Hoy deposits have increased 53%, 36%, 20%, and 30% respectively. Meanwhile, its Bilatos and Penfolds deposits received maiden mineral resources.

However, the project’s Grants deposit’s mineral resource dropped 2% to 2.19 million tonnes at 1.47% lithium oxide due to mining depletion. The ASX 200 company delivered the maiden shipment of lithium from Grants for export earlier this month.

Core Lithium CEO Gareth Manderson commented on the news driving the company’s share price higher, saying:

This significant increase to the Finniss mineral resource is a fantastic outcome for Core and our shareholders.

Through the targeted and systematic drilling of known and emerging deposits, the company has further highlighted the prospectivity of our landholding in the Bynoe Pegmatite field and the strong potential for life of mine extensions at the Finniss Lithium Operation.

Core Lithium has already kicked off this year’s drilling program. Manderson said last year’s success is a “strong endorsement” of 2023’s $25 million program – nearly double 2022’s then-record-breaking budget.

The post Core Lithium share price leaps 5% on ‘fantastic outcome for … shareholders’ appeared first on The Motley Fool Australia.

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More reading

• These are the 10 most shorted ASX shares this week
• Goldman Sachs names the ASX 200 lithium shares to buy (and avoid)
• 3 things that could tank the Core Lithium share price even further
• Why are ASX lithium shares leaping ahead today?
• Why Arafura, Core Lithium, Mayne Pharma, and Newcrest shares are storming higher

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 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 fund managers from WAM Leaders Ltd (ASX: WLE) have revealed one of the S&P/ASX 200 Index (ASX: XJO) mining shares in their portfolio that they are positive about. That optimistic commentary was about Iluka Resources Limited (ASX: ILU).

WAM Leaders is a listed investment company (LIC) that tries to deliver outperformance with its portfolio of ASX blue chips. The WAM Leaders gross investment portfolio performance was 14.4% per annum since May 2016, compared to an average return per annum of 8.6% for the S&P/ASX 200 Accumulation Index (ASX: XJOA).

What does ASX 200 mining share Iluka do?

Iluka describes itself as a global critical minerals company with expertise in exploration, development, mining, processing, marketing and rehabilitation.

It’s a “leading producer of zircon and the high grade titanium dioxide feedstocks rutile and synthetic rutile.” The company has also established a “significant” position in rare earth elements. The ASX 200 mining share also owns a 20% stake in Deterra Royalties Ltd (ASX: DRR), the largest ASX-listed resources focused royalty company.

The company’s commodities are seeing increasing demand, with its production used in applications like technology, construction, medical, lifestyle and industrial uses. Electric vehicles are one of the key uses for its materials.

Its projects and operations are in Australia, while exploration activities are conducted internationally.

What the WAM Leaders team likes about the business

The WAM team points out that with the core products of zircon and rutile, the company is among the largest players globally.

The fund manager said that with the Australian government’s support, the ASX 200 mining share is embarking on a move into rare earths production with the first production at the Eneabba rare earths refinery expected in 2025.

WAM Leaders explained:

We continue to hold Iluka Resources in our top 20 holdings as we believe there is significant strategic value in their assets and it is trading relatively inexpensively given its unique market position and growth opportunities.

In a recent presentation to the market, Iluka pointed out that disciplined production responses are an encouraging evolution for the mineral sands and downstream opacifier and pigment industries. This serves to “reduce volatility, with positive implications for many through the supply chain.”

Foolish takeaway

There are a number of interesting elements about Iluka, including a dividend that has grown since 2020. At the current Iluka share price, the ASX 200 mining share offers a grossed-up dividend yield of 5.5%.  

The post Here’s why a fund manager says this ASX 200 mining share is ‘unique’ with ‘significant value’ appeared first on The Motley Fool Australia.

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More reading

• Why Karoon Energy, Lottery Corp, Magellan, and WAM Leaders are dropping today
• 4 ASX 200 shares just upgraded by brokers, one with 18% upside

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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S&P/ASX 200 (ASX: XJO) shares are down 0.48% shortly after the market opening bell.

According to The Australian, Citi has commenced coverage of Carsales.Com Ltd (ASX: CAR). It’s got a buy rating on the digital marketplace and a 12-month price target of $25.80.

Carsales shares are down 0.73% at $23.03 apiece at the time of writing although are still up 14% in the year to date.

Meantime, Morgan Stanley has increased its rating on Mirvac Group (ASX: MGR) to overweight. It has slapped a $2.55 price target on the diversified property group.

The Mirvac share price is currently $2.31, up 2.21% in early trading, and is up 8.5% in the year to date.

Let’s take a look at the latest news pertaining to these ASX 200 shares.

Carsales.Com Ltd

Carsales is Australia’s leading online portal for buying and selling cars, motorbikes, trucks, caravans, and boats. It also operates in digital marketplaces across Oceania, Asia, and the Americas.

The last price-sensitive news we got for this ASX 200 share was the completion of its retail shortfall bookbuild on 5 April.

The company announced that the retail shortfall bookbuild component of its fully underwritten 1 for 14.01 pro-rata accelerated renounceable entitlement offer was done and dusted.

This was the final stage of the offer.

The retail component raised $121 million, with 6.1 million new Carsales shares issued at $19.95 per share.

That combined with the institutional offer gave Carsales $501 million of new capital.

Carsales intends to use the money to acquire an additional 40% of Brazilian car marketplace webmotors S.A. Carsales will use the balance to strengthen its books.

Mirvac Group

This property developer and manager operates in residential and master-planned communities, as well as the office and industrial, retail, and build-to-rent sectors.

The last price-sensitive announcement for this ASX 200 share came on 9 February. At that time, the real estate investment trust (REIT) reported its earnings results for the first half of FY23.

As my colleague Sebastian reported, Mirvac delivered higher operating profits and dividends but a substantial decline in statutory profits.

The news resulted in a sell-off, with the Mirvac share price share falling 4.6%.

Almost 21 million shares changed hands over the course of the day, making it among the top three most heavily traded ASX 200 shares.

The post 2 ASX 200 shares just upgraded by brokers appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Tuesday
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Monday
• What can ASX 200 investors expect from the US Fed in 2023?
• If I’d invested $1,000 in Liontown shares at the start of 2023, here’s what I’d have now

Citigroup is an advertising partner of The Ascent, a Motley Fool company. 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 recommended Carsales.com. 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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Diversification. No doubt anyone keen to build a portfolio of ASX shares has come across the term. It’s perhaps the simplest way to reduce risk – essentially, by not putting all your eggs in one basket. And I think there’s an even simpler way to diversify an ASX portfolio of any size – adding the Vanguard MCSI Index International Shares ETF (ASX: VGS).

Diversifying with the Vanguard MCSI Index International Shares ETF

There are plenty of ways one can diversify their investments. They might choose to buy shares in a diverse range of ASX shares operating in various sectors or to invest in a variety of asset classes.

Another way to diversify is to invest in different geographies. That’s where the Vanguard MCSI Index International Shares ETF can come in handy.

The exchange-traded fund (ETF) boasts nearly $30 million of assets under management and aims to track the return of the MCSI World ex-Australia index.

It allows Aussie investors exposure to more than 1,470 shares listed in 22 international markets such as Japan, the United Kingdom, and Switzerland. Though, the majority of its holdings are listed in the United States.

It’s also spread across 11 sectors. Nearly 22% of the fund is invested in tech stocks, while another 14% is in financials shares, and 13% is in healthcare companies.

Its largest holdings include Apple Inc (NASDAQ: AAPL) – 5%, Microsoft Corp (NASDAQ: MSFT) – 3.9%, and Amazon.com Inc (NASDAQ: AMZN) – 1.8%.

Not to mention, it pays dividends

On top of its diversification power, the ETF also offers quarterly dividends.

Indeed, each unit in the VGS ETF has paid $9.19 in dividends over the last five years.  

Right now, it offers a 2.1% dividend yield, according to Vanguard. While that’s not exactly jaw-dropping, I think it’s an added bonus to the fund’s diversification power.  

Fees and returns

But the ultimate goal of most – if not all – investments are assumably to make money. So, let’s consider the nitty gritty of the ETF’s costs and returns.

The Vanguard MCSI Index International Shares ETF demands an affordable 0.18% annual management fee.

And it’s well and truly returned that over the years. Its unit price has risen 50% over the last five years, outperforming the S&P/ASX 200 Index (ASX: XJO) by 24%.

Looking further back, it’s risen a whopping 98% since its inception in 2014. Meanwhile, the benchmark ASX 200 lifted 39%.

Of course, past performance isn’t an indication of future performance, and no investment is guaranteed to provide returns.

Still, I think the Vanguard MCSI Index International Shares ETF would be a no-brainer buy if I needed to further diversify my ASX portfolio.

The post I think the Vanguard MCSI Index International Shares ETF (VGS) is a no-brainer diversification buy. Here’s why appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Tuesday
• 3 ETFs that could be top buys right now
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Monday
• What can ASX 200 investors expect from the US Fed in 2023?

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. 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 Amazon.com, Apple, Microsoft, and Vanguard Msci Index International Shares ETF. The Motley Fool Australia has recommended Amazon.com, Apple, and Vanguard Msci Index International Shares 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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Telstra Group Ltd (ASX: TLS) shares are known for paying passive income to investors in the form of dividends.

The company is part of a group of ASX blue chips that pay fully franked dividend yields like BHP Group Ltd (ASX: BHP) and Commonwealth Bank of Australia (ASX: CBA).

But, I think that Telstra could be a stronger business, competitively speaking.

ASX mining shares don’t have much control over the price of the commodities that they’re selling. The ASX bank shares are in a competitive sector where there are numerous lenders all offering a loan – which could reduce margins over time.

For a few key reasons, I think that Telstra could be a very effective pick for passive dividend income in the coming years.

Dividend yield and growth

In a world of inflation, I think it’s important for ASX dividend share investment ideas to display dividend growth so that the dividends aren’t falling behind inflation over time.

In the FY23 half-year result, Telstra grew its interim dividend by 6.3% to 8.5 cents per share. This came after a 25.7% rise in net profit after tax (NPAT) to $0.9 billion.

Commsec numbers suggest that Telstra’s FY23 full-year dividend could be 17 cents per share, which would translate into a grossed-up dividend yield of 5.7%. That’s comfortably more than what we can get from 12-month term deposits at the moment.

Projections on Commsec suggest that Telstra could grow its dividend by 5.9% to 18 cents per share in FY24 and then another 5.5% in FY25 to 19 cents per share. Therefore, by FY25 it could be paying a 6.3% dividend yield.

Defensive earnings

I think that Telstra has very defensive earnings. A lot of households and businesses may rely on their internet connection for carrying out their economic activity. Plenty of people use the internet for education or entertainment as well.

In my opinion, the business has defensive earnings considering how integral yet relatively cheap their telecommunications is.

Telstra boasts that it has the market-leading network, which it is improving with its 5G network investments. The company feels confident enough to pass on inflationary increases to mobile subscribers, which is good for earnings and maintaining passive income payments.

I’d rather own a business that offers an essential service to a sticky customer base than an ASX bank share which is now operating in a very competitive environment.

Is the Telstra share price a buy?

I believe the ASX blue chip share would make a very effective investment for passive dividend income at the current level.

Using Commsec projections, it’s valued at 21 times FY25’s estimated earnings. That’s not exactly cheap, but I think the fact that its growing profit as well as its defensive nature makes it worthy of that sort of valuation.

With Telstra growing and diversifying its earnings, I think the business has a very promising future. Receiving and transmitting data is only going to become more important as the years go by, in my opinion, so I’d back Telstra to keep benefiting over time.

The post Why I think Telstra shares could be a top buy for passive income in 2023 and beyond appeared first on The Motley Fool Australia.

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More reading

• Here are the 3 most heavily traded ASX 200 shares on Friday
• Passive income alert! Buy these ASX 50 dividend shares now: analysts
• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• Blue chip beat-down: 5 huge ASX 200 shares cementing new 52-week highs today
• Can the Telstra share price keep on rising?

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

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The AMP Ltd (ASX: AMP) share price has been a strong performer in recent weeks.

In fact, since this time last month, the financial services company’s shares have risen almost 11%.

Why is the AMP share price surging higher?

There may be a few reasons why the AMP share price has taken off recently.

The first is a rebounding share market thanks to optimism that the rate hike cycle could be nearing an end. This has lifted the ASX 200 index by 7% over the same period, which has given overall investor sentiment a big boost.

In addition, it is worth noting that the AMP share price was beaten down thoroughly during earnings season. As you can see on the chart below, this means its shares are still down approximately 16% year to date despite this recent rally.

Some investors may believe that its shares were oversold and were snapping them up.

Anything else?

Also potentially giving the AMP share price a lift was a bullish broker note out of Ord Minnett.

According to the note, the broker recently upgraded its shares to a an accumulate rating with a $1.35 price target.

So, with its shares currently trading at $1.10, this implies potential upside of almost 23% for investors over the next 12 months.

And while the broker isn’t expecting AMP to pay a dividend in FY 2023, it is forecasting a 4 cents per share dividend in FY 2024. This means investors can look forward to a 3.6% dividend yield that year.

Ord Minnett made the move largely on valuation grounds after February’s sizeable pullback.

And with its price target still offering decent upside from current levels, the broker appears to believe that the gains may not be over just yet.

The post Why has the AMP share price rocketed 11% in a month? appeared first on The Motley Fool Australia.

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More reading

• Why did the AMP share price beat the ASX 200 in March?
• The first AMP dividend in over 2 years is being paid today. Here’s the lowdown
• 5 things to watch on the ASX 200 on Monday
• AMP share price slips amid expected first strike on remuneration
• Here are the top 10 ASX 200 shares today

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

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If you have a higher than average risk tolerance, then having a little exposure to the small side of the market could be worth considering.

That’s because if you can catch a small cap ASX share on its way to becoming a mid or large cap, the returns could be mouth-watering for your portfolio.

With that in mind, let’s take a look at a couple of small cap ASX shares that Morgans has on its best ideas list this month. They are as follows:

PeopleIn Ltd (ASX: PPE)

Morgans thinks that this workforce management company could be a small cap ASX share to buy right now.

The broker currently has an add rating and $4.90 price target on its shares. This implies potential upside of almost 70% for investors.

Its analysts believe its shares are cheap at the current level. Particularly given the company’s strong earnings growth potential and defensive qualities. It commented:

PPE is trading back at $3.00/sh and a sub-10x PER. We continue to think it looks cheap for a company that has grown earnings at c.20% year in year out – company guidance has EBITDA growing 35% in FY23. We are buoyed by management’s focus on making the business more defensive, and capable of navigating any potential downturn. The opportunity under the Pacific Australia Labour Mobility (PALM) scheme is massive and following the Federal Government’s Job Summit, there has rarely been more focus on increasing migration. With Covid all but done PPE’s healthcare division could bounce back and drive earnings growth over the medium term. With $30m of spare debt capacity, management are well placed to deliver growth into FY24, if they can land a deal in the next 18 months.

Tourism Holdings Ltd (ASX: THL)

Tourism Holdings is a global tourism operator and the largest commercial recreational vehicle (RV) rental operator in the world. It merged with Apollo Tourism & Leisure late last year, creating a multi-national, vertically integrated RV manufacturing, rental, and retail business spanning motorhomes, campervans, and caravans.

Morgans has the company’s shares on its best ideas list with an add rating and $5.15 price target. Based on the current Tourism Holdings share price of $3.88, this implies potential upside of 33% for investors.

The broker believes Tourism Holdings is well-placed for growth in the coming years thanks to the travel market recovery from COVID. All things considered, the broker feels its shares are too cheap at current levels. It commented:

THL recently reported a very strong 1H23 result which materially beat expectations. Pleasingly and reflecting the strong operating conditions to which it is leveraged to, it also upgraded its FY23 NPAT guidance. With all markets now reopened, THL has strong leverage to a tourism recovery over the next few years. In addition, it has further leverage from extracting the material synergies with ATL. We continue to believe that the merger synergies are conservative and will be upgraded over time. The prospects for the merged group are so strong that THL will now resume dividends with the FY23 result (6-12 months earlier than expected). With the stock trading on an FY25F high single digit PE, we think this is too cheap for the largest commercial, global RV rental business in the world. Importantly, THL is run by an impressive management team which have a strong track record.

The post Morgans expects big returns from these small cap ASX shares appeared first on The Motley Fool Australia.

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More reading

• Analysts are tipping big returns from these small cap ASX shares
• 2 undervalued ASX shares to buy this month: expert

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 Peoplein. The Motley Fool Australia has recommended Peoplein. 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 has been an uncharacteristically difficult period for the Pilbara Minerals Ltd (ASX: PLS) share price.

Concerns over falling lithium prices have put a lot of pressure on this mining giant’s shares and has led to them losing approximately 21% of the value over the last six months.

Is the Pilbara Minerals share price weakness a buying opportunity?

One leading broker that believes investors should be snapping up this lithium share after recent weakness is Morgans.

According to a recent note, the broker has put an add rating and $5.30 price target on its shares.

Based on the latest Pilbara Minerals share price of $3.80, this implies potential upside of just under 40% for investors over the next 12 months.

What did the broker say?

Pilbara Minerals has become the broker’s top pick in the industry recently thanks partly to its takeover appeal.

Morgans believes it could be an attractive option for a large miner that wants immediate exposure to lithium spodumene. It explained:

We see both AKE and PLS as potential targets in addition to the ongoing interest in LTR. The relative attractiveness of each depends on the needs of the buyer. AKE is cheaply priced on an EV / resource basis but has comparatively less spodumene. Spodumene is the most direct path to producing lithium hydroxide, the preferred form for the higher nickel content cathodes, which power the longer range vehicles preferred in western markets.

PLS is an Australian spodumene pure play and would suit an acquirer that is looking for a fast way to get exposure to lithium. PLS does not have the resource base of AKE though and is more expensive per tonne of LCE. The Gwanyang plant (PLS holds a minority share in JV with POSCO) is contracted to take 315ktpa of spodumene but the P1000 expansion will leave the company with a significant amount of yet to be contracted production. The company’s size would restrict interest to larger mining houses, international chemicals companies, battery producers or OEMs.

All in all, don’t be surprised if Liontown Resources Ltd (ASX: LTR) isn’t the only lithium share to receive a takeover approach this year.

The post Morgans says the Pilbara Minerals share price can rise 40% appeared first on The Motley Fool Australia.

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More reading

• Here are 3 ASX 200 lithium shares to buy now according to brokers
• Here are the 3 most heavily traded ASX 200 shares on Monday
• If I’d invested $1,000 in Liontown shares at the start of 2023, here’s what I’d have now
• Lithium, iron ore, and copper: Experts say these ASX 200 mining shares are buys
• Analysts say these 3 blockbuster ASX 200 growth shares are buys

Motley Fool contributor James Mickleboro has positions in Allkem. 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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It has been the School of Hard Knocks for Kogan.com Ltd (ASX: KGN) shareholders for the past couple of years. After surging to nearly $25 apiece amid insatiable online demand during the pandemic, Kogan shares have taken the painful trek back down.

A stretch of unprofitability has left a sour taste in the mouth of investors. Rather than sticking around to see when the tides will turn, many have decided to cash out. As a result, the online retailer‘s share price has fallen 31.5% over the past year, as displayed in the chart above.

Kogan shares closed at $3.53 apiece on Monday.

What matters now is whether Kogan can regain its appeal or if its heydays are well and truly behind it. To unpack the merit behind both sides, two of our writers have picked up their pens to participate in a mental joust.

Here is the outcome of the Kogan bull vs. bear battle:

Not running to the checkout for this online retailer

By James Mickleboro: I’ve been bearish on Kogan for some time and am certainly glad I stayed well away from its shares.

The e-commerce company’s disastrous inventory management over the last 18 months destroyed significant shareholder wealth and has me doubting its ability to scale successfully. Especially in the face of increasing competition from one of the world’s largest companies.

For a long time, Kogan was touted as Australia’s Amazon. However, I firmly believe that the Amazon of Australia will be Amazon itself. You only need to look at the contrasting performances of the two companies to see this.

Last year, when Kogan’s sales were going backwards as customers returned to brick-and-mortar retail stores, Amazon Australia’s sales grew by almost 50% to $2.63 billion.

Let that sink in for a second. Amazon officially launched in Australia in December 2017. Since then, it has gone from zero to $2.7 billion in five years. Whereas Kogan has gone from approximately $290 million in FY 2017 to $718 million in FY 2022 (shown below). At the same time, Amazon Australia has grown its offering from 75 million products to 200 million. I don’t believe this bodes well for Kogan’s future.

In addition, with the Amazon Prime service offering free next-day delivery (even on a Sunday!) and a streaming service to rival Netflix for just $6.99 a month, I believe its value proposition is compelling for consumers. And while Kogan has its own loyalty program, Kogan First, the benefits pale in comparison and won’t see me cancelling my Prime membership any time soon.

There’s a saying that every dog has its day. And while eventually, value can be found in most ASX shares, I don’t see any in this dog. For example, according to CommSec, the consensus estimate is for Kogan to deliver earnings per share (EPS) of 10 cents in FY 2025.

This means its shares are changing hands for 37x FY 2025 earnings. As a comparison, fellow retailer Accent Group Ltd (ASX: AX1) trades at just over 14x forecast FY 2025 earnings. That’s despite Accent being the clear market leader in its category!

Overall, in light of the above, Kogan shares won’t be making an appearance in my portfolio any time soon.

Motley Fool contributor James Mickleboro does not own shares in any shares mentioned.

Why add Kogan shares to the cart?

By Tristan Harrison: 

The Kogan share price has fallen significantly since the COVID-19 hype, and I think it’s now at a point where the business can rebound and deliver positive returns.

Kogan sells a wide range of products, but it also offers customers a number of extra services, including mobile, energy, insurance, and internet.

The first part of the COVID-19 period saw the business experience extraordinary levels of demand. But, a lot of things have gone wrong since then.

However, the business seems to be on the right course again. It said that it returned to profitability in adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) terms in January 2023, the first profitable month since July 2022.

The business has ‘right-sized’ its inventory — as depicted below — and it’s expecting to achieve further operational efficiencies in the second half of FY23 as a result of that inventory improvement.

I think that the market underestimates how much profit the company can make once normal operating conditions return. Remember that in FY19, it made $17.2 million of net profit after tax (NPAT), so if it can just recover back to those profit margins, I think it can do well.

Kogan has increased its market presence since then, meaning increased scale, with the acquisition of (profitable) Mighty Ape. This has enabled it to expand into New Zealand.

More people are going to buy products online in the future as more people adopt online shopping. I think Kogan can benefit from that trend while hopefully experiencing increasing profit margins if it sees scale benefits.

Motley Fool contributor Tristan Harrison does not own shares in Kogan.com Ltd.

The post Kogan shares: Bull vs. bear appeared first on The Motley Fool Australia.

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More reading

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon.com and Kogan.com. The Motley Fool Australia has positions in and has recommended Kogan.com. The Motley Fool Australia has recommended Accent Group and Amazon.com. 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’re a true long-term investor of ASX shares, you have mastered the art of looking past short-term dips.

But that doesn’t mean you ignore those fluctuations though.

Because a short-term decline could mean a tempting buying opportunity for those quality businesses that you always had your eye on.

A couple of experts this week named two S&P/ASX 200 Index (ASX: XJO) shares that are perfect examples:

Bullish for commodities

Mineral Resources Ltd (ASX: MIN) is a service provider for the mining industry, with much of its business coming from iron ore extraction.

Fairmont Equities managing director Michael Gable is a fan.

“The share price remains in a long term uptrend,” Gable told The Bull.

“However, weakness in the past few weeks saw the share price ease back to the bottom of the trend and provide a new entry point.”

Indeed, the Mineral Resources share price has dropped around 12% since 2 March while it still trades 28.5% higher than it did a year ago.

Gable’s team is sure the recent dip merely represents an attractive window to buy.

“We continue to remain bullish about the outlook for commodities given buoyant Chinese demand,” he said.

“We expect a weaker US dollar to offer price support to the sector.”

According to CMC Markets, 10 out of 17 analysts currently believe Mineral Resources shares are ripe to buy.

‘Strong start’ to the financial year

Ord Minnett senior investment advisor Tony Paterno’s bargain pick is petroleum company Ampol Ltd (ASX: ALD).

He noted how Ampol “delivered strong refiner margins” in the latest report.

“The fuel giant reported group statutory net profit after tax of $796 million in fiscal year 2022, an increase of 42% on the prior corresponding period.”

Paterno loved how the final fully franked dividend of $1.05 was supplemented with a special dividend of 50 cents, taking the yield to 7.26%.

The Ampol share price has risen more than 50% since the COVID-19 crash three years ago, but it has dipped 6.5% since the start of last month.

Paterno would use the opportunity to buy.

“Ampol retains a strong balance sheet,” he said.

“It reported a strong start in fiscal year 2023.”

Paterno’s peers largely agree, with 10 out of 12 analysts currently surveyed on CMC Markets rating Ampol as a buy.

The post A ‘new entry point’ just opened for 2 ASX 200 shares with strong outlooks appeared first on The Motley Fool Australia.

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More reading

• ‘Significant earnings growth’: Bell Potter says Mineral Resources share price can rocket 30%
• Goldman Sachs names the ASX 200 lithium shares to buy (and avoid)
• 5 things to watch on the ASX 200 on Thursday
• Passive income investors can get big yields from these top ASX dividend shares: experts
• ASX 200 lithium stocks sink again following Albemarle downgrade

Motley Fool contributor Tony Yoo 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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