Tag: Motley Fool

Demand for uranium is expected to increase materially over the coming decades as the world embraces nuclear power again.

This bodes well for a handful of ASX 300 uranium stocks that trade on the ASX boards.

One of those is Deep Yellow Limited (ASX: DYL), which has deep pockets following a recent capital raising.

These funds will be used to advance the development of its flagship Tumas Project in Namibia, as well as progress the development activities at the Mulga Rock Project in Western Australia.

Is this an ASX 300 uranium stock to buy?

The team at Bell Potter was pleased with the capital raising and believes it makes the company a great option for investors that are wanting to gain exposure to uranium. It commented:

DYL has gone hard early, which we believe puts the company in a better position to negotiate offtake with utilities, ultimately feeding into debt negotiations. We estimate the capital requirement to bring Tumas into production at $657m, which following the $250m allocation to Tumas in the recent capital raise, leaves $407m to be sourced. We suspect DYL will look to source traditional debt for most of the remaining balance, however other options include pre-production sales and as a failsafe option, strategic equity.

In response to the capital raising, the broker has reaffirmed its speculative buy rating and lifted its price target on the ASX 300 uranium stock by 5% to $1.90 (from $1.81).

Based on its current share price of $1.31, this implies potential upside of 45% for investors over the next 12 months.

Though, it is worth noting that it has a speculative rating. This makes it a higher risk option that may not be suitable for all investors.

The broker concludes:

Further upside in uranium remains, as limited near-term supply spurs the spot market whilst the global path to decarbonisation shapes the role of nuclear over the longer-term. Following the merger with VMY (Vimy – de-listed), DYL has a Mineral Resource Estimate (MRE) of 431mlbs U3O8, and an Ore Reserve of 110mlbs U3O8. We see DYL as being attractively positioned in a rising uranium bull market, capable of delivering the next wave of supply into an increasingly tight market.

Overall, this could make it a good option if you’re bullish on uranium and have a high tolerance for risk.

The post Why this ASX 300 uranium stock could rocket 45% appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• These are the 10 most shorted ASX shares
• Why Beach, Clinuvel, Deep Yellow, and EML shares are charging higher today
• Why is this ASX 300 uranium stock avoiding the market selloff and racing higher?
• The ASX uranium shares to buy just coming out of a trading halt
• What’s happening with ASX uranium 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.

from The Motley Fool Australia https://ift.tt/aKMZ179

It’s been a fairly pleasant, if volatile, day for the S&P/ASX 200 Index (ASX: XJO) and most ASX 200 shares so far this Wednesday. At the time of writing, the ASX 200 has added 0.16% up to 7,716 points after rising as high as 7,738 points earlier this morning. But let’s talk about four top ASX exchange-traded funds (ETFs) that are doing even better.

This session has seen no fewer than four ASX ETFs clock new record highs.

There’s the Vanguard US Total Market Shares Index ETF (ASX: VTS), which hit a new high of $393 per unit this morning.

That was followed by the Vanguard MSCI Index International Shares ETF (ASX: VGS). This ETF reached up as high as $123.76 per unit just before midday.

The VanEck Morningstar Wide Moat ETF (ASX: MOAT) joined in just after market open this morning, clocking a new record of $128.35 per unit.

Finally, we have the iShares S&P 500 ETF (ASX: IVV). This index fund delighted investors with a new all-time high just before midday of $52.97.

You might notice that none of these ASX ETFs actually track ASX shares though. In fact, all four have heavy exposure to the US markets. As such, it’s relatively simple to explain why every member of this quartet has almost simultaneously hit a new record today.

Why are these top ASX ETFs at new record highs today?

The US markets as a whole have been on a tear over March thus far.

Last night’s trading over on the American markets, for instance, was a momentous one. Yet again, we saw the flagship US stock market index – the S&P 500 Index (SP: .INX) – hit a new high. Well, it was a closing high. Last night’s session saw the S&P 500 Index close at its highest level ever at 5,178.51 points after rising 0.56%. That doesn’t quite equal this index’s all-time record of 5,189.26. But it’s mighty close.

All four of the ASX ETFs listed above exclusively hold US shares, with the exception of the Vanguard International Shares ETF. Approximately 70% of this fund’s portfolio is tilted towards the United States.

Last night saw ‘magnificent seven’ stocks like Apple, NVIDIA, Microsoft and Amazon all pushing higher. As such, it’s no surprise to see these ASX exchange-traded funds, most of which count these seven shares as major holdings, follow suit.

Also assisting would be the continued weakness of the Australian dollar against the US dollar. All of these ETFs are on the ASX, and as such are priced in Australian dollars. So when our dollar is weak, it boosts the value of American assets when translated into our local currency on the ASX.

This latest push higher for these ETFs is just the latest in a parade of stonking returns that ASX investors have enjoyed though. The best performer of the bunch – the iShares S&P 500 ETF – is now up a whopping 34.94% over just the past 12 months.

The post 4 top ASX exchange-traded funds smashing record highs on Wednesday appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• How I’d invest my first $1,000 in ASX shares in 2024
• Give your portfolio a big boost with these high-quality ASX ETFs
• 3 Australian shares to buy and hold forever in your ASX portfolio
• The best ASX shares to invest $500 in right now
• 2 ASX ETFs that have made investors rich

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 Sebastian Bowen has positions in Amazon, Apple, Microsoft, and VanEck Morningstar Wide Moat ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon, Apple, Microsoft, Nvidia, and iShares S&P 500 ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has recommended Amazon, Apple, Nvidia, VanEck Morningstar Wide Moat ETF, Vanguard Msci Index International Shares ETF, 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.

from The Motley Fool Australia https://ift.tt/IWKehGX

S&P/ASX 200 Index (ASX: XJO) mining shares are racing ahead of the benchmark in early afternoon trade on Wednesday.

Here’s how the big three mining stocks are tracking at the time of writing:

• Fortescue Metals Group Ltd (ASX: FMG) shares are up 2.02%
• BHP Group Ltd (ASX: BHP) shares are up 0.8%
• Rio Tinto Ltd (ASX: RIO) shares are up 1.5%

For some context, the ASX 200 is up 0.3% at this same time.

Here’s what’s boosting the Aussie mining stocks today.

What’s lifting the ASX 200 mining shares?

Iron ore counts as the top revenue earner for all three ASX 200 mining shares.

And copper also brings in many billions of dollars in revenue each year.

After falling below US$100 per tonne on Friday, iron ore has been rallying this week. The steel-making metal gained 3.2% overnight to trade at US$107.20 per tonne.

Copper is also enjoying a strong run. The red metal is trading for US$8,976.50 per tonne, up from US$8,434.50 per tonne a month ago.

The iron ore price has spent much of 2024 retreating, having kicked off the year trading for US$145 per tonne.

Much of that retrace was due to concerns over China’s sluggish economic growth outlook impacting the nation’s voracious appetite for the steel-making metal.

This week’s rebound in the iron ore price – and today’s outperformance by the ASX 200 mining shares – follows better-than-expected economic data out of China, released over the weekend.

AS CNBC notes, over the first two months of 2024, Chinese retail sales increased by 5.5%. That topped the 5.2% boost forecast in a Reuters poll.

Importantly for the iron ore market, industrial production was up 7% year on year, far outpacing the consensus estimates of a 5% increase.

In a broader sign that China’s economy may be turning the corner, online retail sales of physical goods leapt by 14.4% in January and February compared to 2023 sales.

Commenting on the Chinese data that’s offering some tailwinds for ASX 200 mining shares, Goldman Sachs analysts said:

We believe China’s sequential growth momentum remained solid in Q1 despite notable divergence across sectors. However, to secure the ambitious ‘around 5%’ growth target this year, more policy easing is still necessary, especially on the demand-side (eg fiscal, housing and consumption).

Indeed, the data showed real estate investment in China declined 9% in the first two months of 2024 compared to the prior year.

But I expect we’ll see more stimulus measures rolled out by the Chinese government to bolster the nation’s critical real estate sector.

Any fresh news on that front should support iron ore and copper prices, offering additional tailwinds for the big three ASX 200 mining shares.

The post Why are ASX 200 mining shares are smashing the benchmark on Wednesday? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Rio Tinto shares higher on $535 million lithium news
• Here are the top 10 ASX 200 shares today
• Shares vs. property: Which Australian states and ASX stocks are delivering the best passive income?
• Buying BHP shares? You’ll want to read this
• 3 ASX 200 mining shares to buy now with less than $1,000

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.

from The Motley Fool Australia https://ift.tt/WwJHS76

The Woodside Energy Group Ltd (ASX: WDS) share price is marching higher again today.

If the S&P/ASX 200 Index (ASX: XJO) energy stock holds these gains by close, it will mark four days of gains out of the last five trading sessions.

Shares closed up 2.3% yesterday and are up 1.2% as we head into the lunch hour today, trading for $30.62 apiece.

That sees the Woodside share price up 6.0% since last Wednesday’s close.

For some context, the ASX 200 is down 0.2% over this same time.

Here’s what’s been piquing investor interest.

Why is the Woodside share price running hot?

Investors tend to buy Woodside stock when energy prices are on the rise. And sell when energy prices are falling.

Over the past week, as you can likely guess by the strong performance of the Woodside share price, the oil price has reached levels not seen since late October.

Brent crude oil is trading for US$87.10 per barrel today, up from US$81.92 per barrel last Wednesday.

At US$ 83.12 per barrel, West Texas Intermediate (WTI) crude is also at its highest levels since October.

The big spike in oil prices follows a series of Ukrainian drone attacks on Russian oil refineries.

According to JPMorgan Chase & Co (courtesy of Bloomberg), the drone attacks have knocked 900,000 barrels per day of Russia’s refinery capacity out of action.

Adding to the potential supply-side crunch, Iraq has announced it intends to cut oil exports over the next months. This is to make up for producing more than it had agreed to in January and February under production limits with OPEC+.

And according to Jeff Currie, chief strategy officer of energy pathways at Carlyle Group, the oil price – and by connection the Woodside share price – could run significantly higher from here.

That’s based on the assumption that the US Federal Reserve will begin reducing interest rates in 2024.

Should that eventuate, Currie believes the oil price will run significantly higher than consensus expectations of US$70 to US$90 per barrel this year.

“I want to be long oil and the rest of the commodity complex in this environment,” he said.

Pointing to Europe’s replenishing its oil stockpiles and China’s efforts to boost its manufacturing sector, Currie said, “The upside here is significant.”

The post Up 6% in a week, why is the Woodside share price running hot? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 5 things to watch on the ASX 200 on Wednesday
• Buy Woodside shares and these ASX 200 dividend giants now
• 5 things to watch on the ASX 200 on Monday
• Buying 350 Woodside shares in an empty investment portfolio would give me a $760 income in year one
• 5 oversold ASX shares to buy in March 2024

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.

from The Motley Fool Australia https://ift.tt/tSCBfM4

The emergence of exchange traded funds (ETFs) has been a great thing for investors.

With a single click of the button, investors can gain easy exposure to many of the highest quality stocks from all corners of the world with ASX ETFs. This was unthinkable a decade ago.

But which ETFs could be top options today? Three excellent options to consider right now are named below:

BetaShares Asia Technology Tigers ETF (ASX: ASIA)

The first ASX ETF that could be worth considering is the BetaShares Asia Technology Tigers ETF.

This fund gives investors access to the biggest and best tech stocks from the Asian region (excluding Japan). This includes high-quality companies such as Alibaba, Samsung, WeChat owner Tencent, and Temu owner PDD Holdings (Pinduoduo).

If you’re confident on the outlook of the Asian economy and the global expansion of the names above, then this ASX ETF could be the one for you.

Vanguard MSCI Australian Small Companies Index ETF (ASX: VSO)

Another ASX ETF to look at is the Vanguard MSCI Australian Small Companies Index ETF.

It could be worth considering if you’re looking for exposure to the small side of the market, which has been tipped to boom this year if interest rates fall.

This fund gives investors access to almost 200 mid and small-caps and, importantly, not just the tail end of the stock market.

At present, among its holdings are companies such as property developer Charter Hall Group (ASX: CHC), online travel agent Webjet Limited (ASX: WEB), health imaging technology company Pro Medicus Limited (ASX: PME), and gold miner Evolution Mining Ltd (ASX: EVN).

Vanguard MSCI Index International Shares ETF (ASX: VGS)

A third high-quality ASX ETF that could be a great option for investors is the Vanguard MSCI Index International Shares ETF.

This popular fund provides investors with access to a whopping ~1,500 of the world’s largest listed companies. This makes it a great way to add diversification to a portfolio and give it international exposure.

Among its holdings are global giants such as Apple, Eli Lilly, Nestle, Nvidia, Tesla, and Visa.

The post Give your portfolio a big boost with these high-quality ASX ETFs appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• With a spare $500, here’s how I’d start buying ASX shares this March
• 4 ASX ETFs for smart investors
• 2 fantastic ASX ETFs to buy for global investing in March
• Are these record-breaking ASX ETFs now too expensive to buy?
• Why Vanguard MSCI Index International Shares ETF (VGS) is a great buy for almost anyone

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 Apple, Nvidia, Pro Medicus, Tencent, Tesla, and Visa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Alibaba Group and Nestlé. The Motley Fool Australia has recommended Apple, Betashares Capital – Asia Technology Tigers Etf, Nvidia, Pro Medicus, 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.

from The Motley Fool Australia https://ift.tt/agdAC79

The market may be rising today, but that gain is nothing compared to what has been recorded by some ASX penny stocks.

For example, the three stocks listed below have all jumped over 30% in morning trade. But why are investors buying their shares? Let’s find out.

Lion Energy Ltd (ASX: LIO)

The Lion Energy share price is up 80% to 4.5 cents. This follows news that it has obtained development approval from the State Assessment and Referral Agency (SARA), the relevant planning agency of the Queensland State Government, for its hydrogen generation and refuelling hub project in the Port of Brisbane.

Lion Energy’s hub is geared towards heavy mobility fleets. It has an early focus on supplying hydrogen to domestic public bus fleets, truck fleets, and fuel cell gensets for the construction and mining industry. The facility will be one of the first of its scale in Queensland.

Peak Rare Earths Ltd (ASX: PEK)

The Peak Rare Earths share price is up 67% to 31 cents. This has been driven by the release of the final set of assay results from its critical minerals exploration program. This program is targeting the multi-commodity potential of the Ngualla carbonatite system.

According to the release, the ASX penny stock’s assays from the Breccia Zone confirm outstanding high-grade thick intercepts of fluorspar. Management believes this supports the potential of a globally significant fluorspar deposit.

It also highlights that the prospectivity of the Breccia Zone is further enhanced by significant high-grade rare earth mineralisation, as well as elevated levels of niobium.

Sierra Rutile Holdings Ltd (ASX: SRX)

The Sierra Rutile share price is up 35% to 10.5 cents. This morning, the Africa focused mineral sands company announced the receipt of an on-market takeover offer.

According to the release, PRM Services has offered to acquire all of the ASX penny stock’s shares that it does not own at a price of 9.5 cents cash per share.

The company has urged its shareholders to take no action and made the following statement:

Sierra Rutile shareholders who sell their shares to PRM Services on-market will be unable to participate in any increase in the offer price or any competing proposal should there be such an increase or any competing proposal is forthcoming.

PRM Services currently has an 11.46% stake in Sierra Rutile.

The post 3 ASX penny stocks exploding over 30% on big news appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 2 ‘very high-quality’ ASX retail shares with significant inside ownership
• Up 71% in 3 weeks, have Zip shares topped out?
• Here’s when AMP says ASX investors can expect an interest rate cut
• Guess which ASX blue-chip share is throwing $202 million at another acquisition
• Rio Tinto shares higher on $535 million lithium news

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.

from The Motley Fool Australia https://ift.tt/S7oOgGr

The fund manager Blackwattle has revealed two ASX retail shares that are exciting and have good long-term growth potential.

The Blackwattle Large Cap Quality Fund aims to outperform the S&P/ASX 200 Accumulation Index (ASX: XJOA) over the long-term. It’s looking for quality companies at low or reasonable valuations.

Two core positions

Two of the ASX shares that the fund manager highlighted in a recent update were ARB Corporation Ltd (ASX: ARB) and Premier Investments Limited (ASX: PMV).

ARB is a business that sells “well-engineered, durable equipment that would meet the vigorous demands of 4WD owners”. It’s Australia’s largest manufacturer and distributor of 4×4 accessories, with a presence in over 100 countries.

Premier Investments owns several retail brands, including Just Jeans, Jay Jays, Jacqui E, Portmans, Dotti, Peter Alexander, and Smiggle. It also has stakes in Breville Group Ltd (ASX: BRG) and Myer Holdings Ltd (ASX: MYR).

Blackwattle said both of these ASX shares are “very high-quality retailers” that are led by “excellent stewards aligned with high levels of ownership.”

Why own these ASX retail shares?

Blackwattle said its thesis for owning them is underpinned by both ARB and Premier Investments’ “differentiated offerings and strong global presence” which have taken many years to build.

The fund manager pointed out that Premier Investments has “hidden growth brands”, namely Smiggle and Peter Alexander. Blackwattle suggested Premier Investments is undervalued because the market is applying a ‘conglomerate discount’ to the ASX share, placing the Premier Investments share price at a “low” price/earnings (P/E) ratio of 13 times.

The investment team suggested the ongoing strategic review might “unveil these brands’ growth prospects,” potentially leading to a higher valuation, as we see with Lovisa Holdings Ltd (ASX: LOV) and Breville Group.

What’s the outlook for the ASX share market?

Blackwattle said that looking ahead, increasing takeover activity bodes well for investors focusing on the intrinsic quality of a business and prevailing valuations.

The investment team then said the heightened market volatility observed during the ASX reporting season “underscores the influence of fast money in the markets”.

The fund manager suggested that for investors with a longer-term view of fundamental value, the volatility “presents an opportunity to acquire outstanding companies at discounted values.”

However, fast-moving share prices of ASX shares that lack a sustainable competitive edge are, in Blackwattle’s opinion, prone to result in capital losses “when the market aligns with reality.”

The post 2 ‘very high-quality’ ASX retail shares with significant inside ownership appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Here are the top 10 ASX 200 shares today
• Top ASX passive income shares to buy in March 2024
• Are you investing or gambling?
• Top brokers name 3 ASX shares to buy today

Motley Fool contributor Tristan Harrison has positions in Lovisa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended ARB Corporation and Lovisa. The Motley Fool Australia has recommended ARB Corporation, Lovisa, and Premier Investments. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/Pf5sBRH

Zip Co Ltd (ASX: ZIP) shares have handed investors some serious gains since mid-October.

Following a painful multi-year sell-down, shares in the All Ordinaries Index (ASX: XAO) buy now, pay later (BNPL) stock reversed course in October. And the remarkable rebound has shown few signs of slowing down.

As you can see on the chart above (if you look closely), the ASX BNPL stock is up 427% since the closing bell on 6 October. That will have turned a $5,000 investment on 6 October into $26,350 today.

And in the past three weeks alone, since market close on 27 February, Zip shares have leapt 71%, currently trading for $1.37 apiece.

With those kinds of eye-popping gains already in the bag, has the company’s charge higher topped out?

Where to now for Zip shares?

Well, there are two ways to look at this.

First, a stock can’t continue to gain 400% every five months indefinitely.

Second, despite the stellar recent run, Zip shares are still trading at a fraction of their February 2021 highs, when the stock reached $12.38.

Now, no one (as far as I’m aware) is expecting Zip to reset those highs anytime soon.

But Citi believes there are more potential gains on the table for the company. Albeit much more modest than the past weeks’ surge.

Last week, when the ASX BNPL stock was trading for $1.30 a share, the broker lifted its target for Zip by 79% to $1.40. At current levels, that still represents a potential 2% upside.

On the other hand, Toby Grimm, managed portfolio analyst at Baker Young, believes the big run higher has likely peaked and has a ‘sell’ rating on Zip shares.

According to Grimm (courtesy of The Bull), “This consumer finance firm delivered better than forecast half year results in fiscal year 2024. Measures to improve profitability drove a rebound in underlying earnings.”

Indeed, revenue was up by 28.9% year on year to $430 million. That was driven by a 9.6% increase in total transaction volume (TTV), which reached $5 billion. And Zip’s cash gross profit leapt 45.9% to $176 million.

But Grimm believes those strong metrics have now been fully priced into Zip shares.

“The stock is trading at a significant premium to our fair valuation. Investors may want to consider taking profits at these levels,” he said.

As always, whether you’re looking at buying or selling Zip – or any other ASX stocks – be sure to do your own research first.

If you’re not comfortable with that, or just don’t have the time, then simply reach out for some expert advice.

The post Up 71% in 3 weeks, have Zip shares topped out? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Why is the Zip share price the best-performing ASX 300 stock so far this year?
• Why Bannerman Energy, Cettire, TechnologyOne, and Zip shares are charging higher
• If I’d put $5,000 into Zip shares on 9 October, here’s what I’d have now!
• Up 288% in 6 months, Zip share price tipped for more outsized gains
• Why Accent, Liontown, PSC Insurance, and Zip shares are charging higher today

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.

from The Motley Fool Australia https://ift.tt/3uAbs2U

Much to the disappointment of homeowners, on Tuesday, the Reserve Bank of Australia (RBA) decided to keep interest rates on hold at 4.35%.

RBA Governor Michele Bullock highlighted that inflation remains high and appears to believe that cutting interest rates now could stop it from hitting target. She said:

While recent data indicate that inflation is easing, it remains high. The Board expects that it will be some time yet before inflation is sustainably in the target range. The path of interest rates that will best ensure that inflation returns to target in a reasonable timeframe remains uncertain and the Board is not ruling anything in or out.

So, when might interest rates fall? Let’s take a look at what the economics team at AMP Ltd (ASX: AMP) is saying.

When will interest rates fall?

As I mentioned here at the weekend, Westpac Banking Corp (ASX: WBC) is currently expecting the first rate cut to take place in September.

The good news for borrowers is that AMP sees scope for a cut to happen sooner than that.

In his weekly report, AMP’s chief economist, Dr Shane Oliver, said:

Given the generally slowing but somewhat mixed readings the RBA is likely to sit on its hands still waiting for more confidence “that inflation is moving sustainably towards the target range”. We continue to see the RBA gaining that confidence by June and being able implement the first cut then but concede there is a high risk it could be delayed till August.

Significant fiscal stimulus in the May Budget could risk delaying the start of easing but the RBA will probably want to see whether this eventuates or not before starting to cut – which likely rules out a May cut.

So, all being well, homeowners may get some relief from their mortgage repayments later this year if everything goes to plan.

The post Here’s when AMP says ASX investors can expect an interest rate cut appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Are you investing or gambling?
• Here are the top 10 ASX 200 shares today
• 25 ASX 200 shares with ex-dividend dates next week

Motley Fool contributor James Mickleboro has positions in Westpac Banking Corporation. 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.

from The Motley Fool Australia https://ift.tt/UMQC6cw

Standing at a colossal $13.07 billion market capitalisation, this blue-chip share is eager to become an even bigger business, firing its cash at another company.

Today, shares in Sonic Healthcare Ltd (ASX: SHL) are up slightly, lifting by 0.4% to $27.46 apiece after announcing an acquisition this morning. Despite the move, the pathology and laboratory services company is still valued 19% lower than it was worth a year ago.

Let’s inspect the details of today’s deal more closely.

Switzerland expansion for ASX blue-chip share

One of the world’s largest diagnostic companies is set to grow even larger after entering a binding agreement to acquire Switzerland-based Dr Risch Laboratory Group.

The second-generation family business operates a ‘full-service’ medical laboratory across 13 centres in Switzerland and another in Liechtenstein. According to the Dr Risch Group website, the company encompasses laboratory medicine, human genetics, microbiology, clinical studies, and more.

In 2023, the Swiss group raked in A$175.9 million in total revenue. Sonic will pay A$201.7 million to acquire the company, equating to a price-to-sales (P/S) ratio of approximately 1.1 times 2023 sales.

The payment will comprise A$51.7 million worth of Sonic Healthcare shares issued to the sellers. Meanwhile, the remaining A$150 million will be funded through the ASX blue-chip shares’ existing cash and debt facilities.

CEO of Sonic Healthcare, Dr Colin Goldschmidt, remarked on the transaction, saying:

The partnership with Dr Risch is an exciting development for Sonic Healthcare and further strengthens our existing position in the Swiss market.

Switzerland made up 10% (A$405 million) of Sonic’s total revenue in the first half of 2024.

So what is the rationale behind this acquisition?

Sonic management anticipates the deal to be earnings per share (EPS) accretive from 2025. Furthermore, the return on invested capital is slated to “significantly exceed Sonic’s cost of capital once synergies are achieved.”

The synergies expected relate to ‘multiple areas of infrastructure and operations (including procurement)’.

Sonic expects the deal to be done by 31 March 2024.

Acquisition appetite

In the last few years, Sonic Healthcare has made numerous acquisitions. Five acquisitions and one strategic stake have been carried out since June 2021.

The flurry of deals follows a period of outsized earnings for Sonic during the COVID-19 pandemic. This stretch of above-normal profits bolstered the company’s balance sheet, reducing its debt-to-equity ratio from more than 50%.

This ASX blue chip share is putting the additional financial headroom to work. Still, at the end of 2023, Sonic posted a debt-to-equity of 32%, suggesting ample firepower for additional acquisitions.

The post Guess which ASX blue-chip share is throwing $202 million at another acquisition appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 1 ASX healthcare stock that looks severely undervalued
• Why I think these 2 ASX shares are steals
• Seeking retirement income from ASX bank shares at 52-week highs? What I’d buy instead
• If I were 60 I’d buy these ASX shares for dividends
• 25 ASX 200 shares with ex-dividend dates next week

Motley Fool contributor Mitchell Lawler has positions in Sonic Healthcare. 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 Sonic Healthcare. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/3OVRZUa