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On Friday, the S&P/ASX 200 Index (ASX: XJO) ended the week at a record high close. The benchmark index rose 1.1% to 7,847 points.

Will the market be able to build on this on Monday? Here are five things to watch:

ASX 200 expected to tumble

The Australian share market looks set to fall on Monday following a pullback on Wall Street on Friday. According to the latest SPI futures, the ASX 200 is expected to open the day 47 points or 0.6% lower. On Friday on Wall Street, the Dow Jones was down 0.2%, the S&P 500 fell 0.65%, and the Nasdaq dropped 1.15%.

Oil prices pullback

ASX 200 energy shares Santos Ltd (ASX: STO) and Woodside Energy Group Ltd (ASX: WDS) could have a poor start to the week after oil prices dropped on Friday night. According to Bloomberg, the WTI crude oil price was down 1.2% to US$78.01 a barrel and the Brent crude oil price was down 1.1% to US$82.08 a barrel. This follows the release of weak economic data out of China.

Telix shares named as a buy

The Telix Pharmaceuticals Ltd (ASX: TLX) share price could be good value according to analysts at Bell Potter. This morning, the broker has retained its buy rating on the radiopharmaceuticals company’s shares with an improved price target of $14.50. Bell Potter believes that its latest acquisition of ARTMS can drive margin expansion.

Gold price hits new high

ASX 200 gold shares Newmont Corporation (ASX: NEM) and Northern Star Resources Ltd (ASX: NST) could have a great start to the week after the gold price stormed to a new high on Friday. According to CNBC, the spot gold price was up 0.95% to US$2,185.5 an ounce. The release of strong US jobs data supported rate cut hopes.

Shares going ex-dividend

A number of ASX 200 shares are going ex-dividend this morning and could trade lower. This includes coal miner Coronado Global Resources Inc (ASX: CRN) biotech giant CSL Ltd (ASX: CSL), hospital operator Ramsay Health Care Ltd (ASX: RHC), and media company Seven Group Holdings Ltd (ASX: SVH).

The post 5 things to watch on the ASX 200 on Monday appeared first on The Motley Fool Australia.

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More reading

• 3 ASX shares you can confidently invest $500 in right now
• Top ASX passive income shares to buy in March 2024
• ASX dividend royalty: Australia’s top stocks for reliable income
• Here’s how the ASX 200 market sectors stacked up this week
• Here are the top 10 ASX 200 shares today

Motley Fool contributor James Mickleboro has positions in CSL, Telix Pharmaceuticals, and Woodside Energy Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL and Telix Pharmaceuticals. The Motley Fool Australia has recommended CSL and Telix Pharmaceuticals. 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 are investing with a long-term horizon in mind, there are a whole bunch of shares that are going for cheaper than $20 to buy right now.

Let’s take a look at three examples of top ASX stocks going for cheap:

Heading in one direction: up

Life360 Inc (ASX: 360) is a Californian software maker that’s listed in the Australian share market.

The share price is around the high $11s at the moment, so meets our sub-$20 cheaper criteria.

Its smartphone app, which is one of the most popular in both the iPhone and Android app stores, is used by families to keep track of the locations of children and assist with emergencies.

Since the business decided a couple of years ago to reform from a profligate startup to a cash-generating machine, it hasn’t looked back.

The Life360 share price is up an astounding 370% since June 2022, and almost 60% just this year.

And I reckon this trajectory can continue in the years to come.

This top ASX stock proved me wrong

I am not too proud to admit that I wrote off Aussie Broadband Ltd (ASX: ABB) a year ago.

Since that article, the shares have rocketed 43% as it’s made some savvy corporate moves.

My concern back then was that taking market share off larger telcos with far deeper pockets could only get so far in a highly commoditised market like the NBN.

But in the past six months Aussie Broadband has shown a hunger to boost this organic growth with accretive acquisitions.

At the moment, it’s trying to buy fellow small NBN provider Superloop Ltd (ASX: SLC).

Each bolt-on like this enhances Aussie’s economies of scale, allowing it to take the fight to the likes of Telstra Group Ltd (ASX: TLS) and TPG Telecom Ltd (ASX: TPG).

The analysts at QVG Capital are bullish on Aussie Broadband, and loved what it had to say during last month’s reporting season.

“What was unexpected was the strength of the outlook,” they said in a memo to clients.

“Upgraded guidance, rapid customer growth and a positive margin outlook meant FY25 earnings expectations needed to be raised.”

Look past the immediate cost blowout

MA Financial Group Ltd (ASX: MAF) is not one that I’ve historically been interested in, but I have noticed recently that many fund managers are hot for it.

The share price took a 26% tumble last month after it reported its results, which is not encouraging.

But multiple analysts say the business is heading in the right direction.

“Pleasingly, net flows into the asset management business remained robust, and the Finsure business continues to take market share,” the Celeste Funds team said in a memo to clients.

“MA Money is forecast to break even in 2H24 while the Corporate Advisory & Equities business endured a difficult year but should rebound as capital markets reopen.”

The cost blowout seen in the latest report was the result of investment into their technology platform, the Celeste analysts added.

This could be a dark horse as a top ASX stock for the coming years. 

CMC Invest currently shows all three analysts covering MA Financial rating it as a strong buy.

The post Long-term investing: 3 top ASX stocks you can buy for under $20 a share appeared first on The Motley Fool Australia.

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More reading

• Top brokers name 3 ASX shares to buy next week
• Top ASX passive income shares to buy in March 2024
• 3 key numbers for the Telstra share price that I think are being overlooked
• Here are the top 10 ASX 200 shares today
• 13 ASX 200 shares with ex-dividend dates next week

Motley Fool contributor Tony Yoo has positions in Life360. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Aussie Broadband and Life360. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool Australia has recommended Aussie Broadband and Ma Financial 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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At the start of each week, I like to look at ASIC’s short position report to find out which shares are being targeted by short sellers.

This is because I believe it is well worth keeping a close eye on short interest levels as high levels can sometimes be a sign that something isn’t quite right with a company.

With that in mind, here are the 10 most shorted shares on the ASX this week according to ASIC:

• Pilbara Minerals Ltd (ASX: PLS) continues to be the most shorted ASX shares after its short interest increased week on week to 21.3%. Short sellers have been closing positions in the lithium industry but are not letting up on this miner.
• Syrah Resources Ltd (ASX: SYR) has short interest of 16.5%, which is down week on week again. Weak graphite prices have been weighing on this miner’s performance.
• IDP Education Ltd (ASX: IEL) has 10.6% of its shares held short, which is up week on week. Regulatory changes have been weighing on this language testing and student placement company’s shares.
• Flight Centre Travel Group Ltd (ASX: FLT) has seen its short interest increase strongly to 9.8%. Short sellers have been loading up on the travel agent’s shares since the release of its half-year results.
• Deep Yellow Limited (ASX: DYL) has seen its short interest ease slightly to 9.7%. Short sellers don’t appear confident that uranium prices will be as strong as the market is predicting.
• Genesis Minerals Ltd (ASX: GMD) has seen its short interest rise to 9.5%. Short sellers are going after the gold miner despite the gold price hitting record highs last week. This may be due to concerns over integration risks from its recent acquisition spree.
• Australian Clinical Labs Ltd (ASX: ACL) has entered the top ten with short interest of 8.8%. A very poor performance so far in FY 2024 (80% profit decline) appears to have attracted short sellers.
• Core Lithium Ltd (ASX: CXO) has short interest of 8.3%, which is down sharply week on week. Short sellers have been lessening their exposure to the lithium industry following a rebound in Chinese prices.
• Liontown Resources Ltd (ASX: LTR) is back in the top ten with short interest of 8%. Short sellers may have concerns over the development of the Kathleen Valley Lithium Project.
• Weebit Nano Ltd (ASX: WBT) has short interest of 7.8%, which is down slightly week on week. Valuation and revenue generation concerns are likely to be behind this.

The post These are the 10 most shorted ASX shares appeared first on The Motley Fool Australia.

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More reading

• Down 19% this year! Is now the moment to buy Core Lithium stock?
• Supercharge your porfolio with these buy-rated ASX growth shares
• Why these 3 ASX 200 shares grabbed the Motley Fool’s headlines this record-breaking week
• 3 ASX 200 shares that could rise 20% to 50%
• 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 positions in and has recommended Idp Education. The Motley Fool Australia has recommended Flight Centre Travel Group and Idp Education. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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With the stock market so buoyant over the past few months, bargains are becoming harder to spot.

However, popular lithium stock Core Lithium Ltd (ASX: CXO) is now down more than 18.5% this year. If you go back 12 months, it’s been a painful 77% dive.

So is this a cheapie just staring at you in the face?

An endless winter for the lithium industry

It’s been a rough year-and-a-half for all stocks related to lithium.

The global prices for the commodity have dived more than 80% as Western consumers lock their wallets after brutal interest rate rises, and the Chinese do the same from shocks in their real estate industry.

So it’s no wonder a pure-play producer like Core Lithium has seen its valuation shrink 87% since November 2022.

In the long run, the experts agree that lithium will be in hot demand from all the batteries that need to be made for the electrification of fossil fuel engines.

So when the turnaround comes in the lithium market, it will 

But when the turnaround will come for the lithium industry is up for debate.

Only last week, a negative production update from electric car maker Tesla inc (NASDAQ: TSLA) sent Core Lithium shares spiralling down 14% in just 24 hours.

Core Lithium is a miner that’s not mining

The other headwind for Core Lithium is that it was forced to stop mining.

Perhaps its larger rivals have the economies of scale to keep going, but in January, the financial equation became unviable for Core to produce.

This is absolutely the right decision to make so that the business is not bleeding cash. But it does give Core Lithium a bleak outlook.

Those who invest for a living are avoiding the miner like the plague.

According to CMC Invest, none of the eight analysts covering Core Lithium are rating it as a buy. Six are recommending investors to sell.

So the answer to the question is that now is probably not the time to buy Core Lithium shares. 

Either something in the business or the lithium market will have to change for investors to gain more confidence in its future.

The post Down 19% this year! Is now the moment to buy Core Lithium stock? appeared first on The Motley Fool Australia.

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More reading

• Could the big short of ASX lithium stocks be nearing its end?
• Why is the Core Lithium share price down 14% in two days?
• Why are ASX lithium shares like Pilbara Minerals crashing on Tuesday?
• Why the 2024 outlook for these rebounding ASX 200 lithium shares looks ‘better than market expectations’
• Guess which 4 shares are being dumped from the ASX 200 index

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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With the ongoing cost of living crisis, it can be hard to scrape together excess cash to invest in the stock market. After all, buying ASX shares can seem indulgent when there are bills to pay, mouths to feed and a roof to maintain.

But if you’ve got a spare $500 this March, putting it into the share market is a great move in my view. As with many things, the first step with investing is often the hardest. I can guarantee that the second $500 you invest in ASX shares is a lot easier to part with than the first. The third, easier still.

But the big decision remains: which ASX share does one spend their first $500 on? And it is probably going to be just one share, as $500 is the minimum parcel value one can directly buy on the ASX.

Here’s what I’d do – speaking as someone who once struggled with this choice.

How to spend your first $500 on ASX shares this March

I would invest in a broad-market index fund or a diversified listed investment company (LIC).

One of the biggest risk factors for your first investment is picking a speculative stock in the hope that it will rocket in value. Speculative investing is a practice that is best left to professional investors. For someone starting out, boring is better.

I would also shy away from buying an individual company at all with your first $500. Even seemingly blue-chip shares can present more risk for a first-time investor than an investment that covers the whole market.

So instead, I would recommend an investment along the lines of the Vanguard Australian Shares Index ETF (ASX: VAS), the iShares Core S&P/ASX 200 ETF (ASX: IOZ), the Australian Foundation Investment Co Ltd (ASX: AFI) or Argo Investments Ltd (ASX: ARG).

The first two investments are both exchange-traded funds (ETFs) and index funds. This means that they hold every ASX share within an index. In VAS’ case, this is the S&P/ASX 300 Index (ASX: XKO), and in IOZ’s, the S&P/ASX 200 Index (ASX: XJO). These indexes track the largest 300 and 200 shares on the market respectively.

That means each fund holds everything from Commonwealth Bank of Australia (ASX: CBA), Woolworths Group Ltd (ASX: WOW) and Telstra Group Ltd (ASX: TLS) to JB Hi-Fi Ltd (ASX: JBH), Harvey Norman Holdings Limited (ASX: HVN) and Xero Ltd (ASX: XRO).

What are the benefits of these investments for a first-time investor?

In this way, your $500 investment is spread out over hundreds of companies, rather than just being in one specific business. This enhances your diversification while removing the risk of your investment going to zero almost completely.

The listed investment companies AFIC and Argo function very similarly. They don’t blindly track what these indexes are doing and have active managers looking after your money instead. But they still spread out your investment over a huge portfolio of diverse ASX shares.

I think a $500 investment in any one of these four options is a prudent way to dip your toes into the world of investing this March. They are simple investments that all have long track records of delivering meaningful returns to their stakeholders. In hindsight, I certainly wish my first purchase of ASX shares had been one of these.

The post With a spare $500, here’s how I’d start buying ASX shares this March appeared first on The Motley Fool Australia.

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More reading

• 5 ASX shares to buy for an effortless path to financial freedom
• Buy these ASX ETFs for easy passive income
• 3 reasons to buy another ASX ETF over the Vanguard Australian Shares Index ETF (VAS)
• 3 excellent ASX ETFs to buy in March
• 14% in 4 months: How has the Vanguard Australian Shares ETF (VAS) managed it?

Motley Fool contributor Sebastian Bowen has positions in Telstra Group and Vanguard Australian Shares Index ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Xero. The Motley Fool Australia has positions in and has recommended Harvey Norman, Telstra Group, and Xero. The Motley Fool Australia has recommended Jb Hi-Fi. 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 on the lookout for some ASX growth shares for your portfolio, then it could be worth checking out the two listed below.

Here’s why analysts are tipping them as buys this month:

Flight Centre Travel Group Ltd (ASX: FLT)

The team at Morgans thinks that Flight Centre could be a top ASX growth share to buy in March.

Flight Centre is a travel agent giant operating across multiple countries including Australia, New Zealand, United States, United Kingdom, and India. In addition to the iconic Flight Centre brand, it also operates businesses such as Aunt Betty, Corporate Traveller, FCM, Stage & Screen, and Travel Associates.

Morgans is positive on the company, noting that with “the benefits of FLT’s transformed business model emerging […] the company is well placed over coming years.”

Last month, the broker responded to Flight Centre’s half year results by retaining its add rating with an improved price target of $27.27. This implies 20% upside for investors from current levels.

NextDC Ltd (ASX: NXT)

Another ASX growth share that could be in the buy zone in March is NextDC.

It is a technology company enabling business transformation through innovative data centre outsourcing solutions, connectivity services, and infrastructure management software.

NextDC has been growing at a rapid rate over the last decade and shows no sign of slowing thanks to the cloud computing and artificial intelligence booms. These are driving strong demand for data centre services.

In addition, the company has been expanding overseas and into regional areas to meet demand in these locations.

Macquarie is fan of the company and responded very positively to the company’s recent half-year results.

This saw the broker retain its outperform rating and lift its price target on its shares to $20.00. This implies potential upside of 15% for investors over the next 12 months.

The post Supercharge your porfolio with these buy-rated ASX growth shares appeared first on The Motley Fool Australia.

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More reading

• Guess which are the 2 newest members of the ASX 100 index
• These are the 10 most shorted ASX shares
• 6 ASX shares to buy and hold until the next leap year
• Which ASX shares delivered the biggest profit jumps of the earnings season?
• Here’s how the ASX 200 market sectors stacked up this week

Motley Fool contributor James Mickleboro has positions in Nextdc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool Australia has recommended Flight Centre Travel 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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Sometimes history can be a good teacher. As 26th US President Theodore Roosevelt said, “The more you know about the past, the better prepared you are for the future.” And if the last 10 years of the All Ordinaries (ASX: XAO) is anything to go by March could be a prime opportunity for scooping up cheap ASX shares.

As with most things in life, markets tend to ebb and flow in a seasonal stream. The Santa rally, tax time selling, and other timely phenomena are clear examples of how share prices fluctuate depending on the time of the year.

However, it should be noted that the market also has a habit of being unpredictable. If past patterns mirrored the future, we’d all be rich. So, taking these patterns with a grain of salt is important — they are always susceptible to change.

What does history show?

Although it is far from certain, the past 10 years of data suggest this month could produce a fall in the All Ords index. Ironically, the Aussie benchmark of the 500 top ASX shares is up 1.9% as of Friday afternoon. Still, 21 days are left in March, so we best not count our chickens before they hatch.

So, what do the last 10 years say about March and whether it is primetime for buying cheap ASX shares?

Well, the average return of the All Ords in March between 2014 and 2024 is a 1.2% decline. The only month to have performed worse is September, diving 2.4% on average over the past decade. Based on this, history would suggest this is one of the best times (second to September) of the year to be a buyer of shares.

If we inspect the data further, I find the following interesting information:

Best March return in the past 10 years: 6.4% increase in March 2022

Worst March return in the past 10 years: 21.5% fall in March 2020

The catastrophic crash in 2020 due to the COVID-19 pandemic drastically impacted the average March return. If we remove this outlier, the average for this month jumps to a 1% gain.

Which ASX shares could be cheap?

History aside, if March pans out to be a good month to buy shares, what companies are currently cheaply valued?

It’s almost a loaded question because a reduced share price doesn’t always present value. Sometimes the ‘cheap ASX shares’ are the ones with share prices soaring ahead as the rest of the market trembles.

Even so, a low forward price-to-earnings (P/E) ratio can sometimes be a decent starting point.

Some of the most cheaply rated companies inside the ASX All Ords right now include:

• Macmahon Holdings Ltd (ASX: MAH) — 4.7 times forward P/E
• AGL Energy Limited (ASX: AGL) — 7.7 times forward P/E
• Fortescue Ltd (ASX: FMG) — 9.2 times forward P/E

It always pays to delve deeper, beyond the P/E ratio, to understand better whether an ASX share is truly cheap.

The post If history repeats itself, March could be one of the BEST times to buy cheap ASX shares appeared first on The Motley Fool Australia.

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More reading

• Top ASX passive income shares to buy in March 2024
• Guess which ASX mining share is rocketing 78% on a JV agreement with Fortescue
• Here’s the Fortescue dividend forecast through to 2026
• Key takeouts for ASX shares this earnings season: CBA analysis
• Investing in an ASX share portfolio for lifelong passive income!

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has 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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While the yields on term deposits have improved markedly over the last 12 months, they still don’t compare to some of the dividend yields you can find on the Australian share market.

For example, analysts are forecasting bigger than average yields from these ASX dividend shares in the near term. Here’s what they expect:

Accent Group Ltd (ASX: AX1)

Bell Potter is expecting this ASX dividend stock to offer investors significantly larger than average dividend yields in the near term.

This is thanks to “continuing casual footwear trends and as sports, fitness & wellness related spending remains a priority.”

The broker has pencilled in fully franked dividends per share of 13 cents in FY 2024 and then 14.6 cents in FY 2025. Based on the latest Accent share price of $1.98, this represents dividend yields of 6.55% and 7.4%, respectively.

Bell Potter has a buy rating and $2.50 price target on its shares.

Deterra Royalties Ltd (ASX: DRR)

Morgan Stanley thinks that mining royalties company Deterra Royalties could be an ASX dividend stock to buy.

Particularly if you’re looking for some big dividend yields in the near term. Its analysts expect Deterra Royalties to be in a position to pay fully franked dividends per share of 37 cents in FY 2024 and 34 cents in FY 2025. Based on the current Deterra Royalties share price of $5.02, this will mean yields of 7.4% and 6.8%, respectively.

Morgan Stanley has an overweight rating and $5.65 price target on its shares.

Suncorp Group Ltd (ASX: SUN)

Finally, Goldman Sachs thinks that insurance giant Suncorp could be an ASX dividend stock to buy.

Due “in large part the tailwinds that exist in the general insurance market” the broker expects fully franked dividends per share of 77 cents in FY 2024 and 82 cents in FY 2025. Based on the Suncorp share price of $15.57, this will mean yields of 4.9% and 5.25%, respectively.

Goldman has a buy rating and $16.25 price target on its shares.

The post Forget term deposits and buy these ASX dividend stocks appeared first on The Motley Fool Australia.

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More reading

• Buy these ASX dividend stocks with yields of 5% to 7.5%
• How investing $100 per week can create $2,000 in annual ASX dividend income
• Why Accent, Cettire, Dicker Data, and Iress shares are dropping today
• Why is the Accent share price sinking 6% today?
• Buy Woolworths and these ASX dividend shares

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 Goldman Sachs Group. The Motley Fool Australia has recommended Accent 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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It has been another busy week for Australia’s top brokers. This has led to the release of a number of broker notes.

Three broker buy ratings that you might want to know more about are summarised below. Here’s why brokers think these ASX shares are in the buy zone:

Lovisa Holdings Ltd (ASX: LOV)

According to a note out of Morgans, its analysts have retained their add rating on this fashion jewellery retailer’s shares with an improved price target of $35.00. Morgans was pleased with the company’s performance during the first half. Looking ahead, it appears confident the trend will continue and has increased its valuation on the belief that its shares deserve to trade on higher multiples. The Lovisa share price ended the week at $31.65.

Life360 Inc (ASX: 360)

A note out of Goldman Sachs reveals that its analysts have retained their buy rating on this location technology company’s shares with an increased price target of $14.20. The broker was very impressed with Life360’s FY 2023 results and believes there’s more to come. It highlights the company’s solid subscription growth outlook from price increases. It also notes that its advertising optionality could drive meaningful medium-term upside. The Life360 share price was fetching $12.34 on Friday.

South32 Ltd (ASX: S32)

Analysts at UBS have retained their buy rating on this mining giant’s shares with an improved price target of $4.00. The broker is feeling more bullish on South32 after boosting its copper price estimates meaningfully higher through to 2027. This is expected to be underpinned by strong demand and a supply crunch. The South32 share price ended last week at $2.99.

The post Top brokers name 3 ASX shares to buy next week appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Why Life360, Evolution Mining, Magnetic Mining, and Zip shares are rising today
• Top brokers name 3 ASX shares to buy today
• 2 ASX shares that could keep flying after a massive reporting season
• 2 ASX shares with attractive ‘risk-reward’ balance to buy right now

Motley Fool contributor James Mickleboro has positions in Life360 and Lovisa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group, Life360, and Lovisa. The Motley Fool Australia has recommended Lovisa. 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 Brickworks Limited (ASX: BKW) stock price has gone on a very strong run. It has risen by around 25% in just three months, compared to a rise of around 9% for the S&P/ASX 200 Index (ASX: XJO).

After this recent strength, some investors may be concerned they’ve missed the boat on this one. But, has it risen too far to invest?

What’s driving the Brickworks stock price?

Remember – there are four main segments of the Brickworks business. It has an investments division, an industrial property division, an Australian building products segment and a US building products segment.

I suggest that the property division and the Australian building products division are likely driving Brickworks’ stock price higher.

Investors seem to have moved on from what I’m going to call ‘peak worry’ about interest rate rates and commercial property valuations – we’ve seen the share prices of industrial property-related businesses rise. For example, in the last three months, the Goodman Group (ASX: GMG) share price has risen more than 30%.

We’ve also seen a number of large takeover offers for other Australian building product companies, including CSR Ltd (ASX: CSR), Adbri Ltd (ASX: ABC) and Boral Ltd (ASX: BLD). If those businesses are all worth more than what they were trading for, then perhaps the Brickworks Australian building product division is also worth more too?

Is it too late to invest?

Brickworks stock continues to trade on the ASX, so it’s still possible to invest.

Has the Brickworks stock price reached an all-time peak that it will never surpass? I doubt it.

I think a lot of returns have been brought forward, but the business is still capable of growing its underlying asset value.

Brickworks can’t really control what happens with the investments division, but it’s seeing significant progress with its joint venture industrial property trust where it’s building large logistics properties (which are in high demand, including robotics and automation and multi-storey warehousing) on land no longer needed by the manufacturing side of Brickworks.

I don’t know what interest rates or commercial property prices are going to do, but the strong tenant demand is driving rental income and new completions are helping create development profits and increase the underlying value. Over time, I think the property division can keep growing value significantly.

I think the managing director, Lindsay Partridge, effectively explained the opportunity for Brickworks stock with its property:

Despite the volatility in the property market more broadly, we continue to experience strong lease enquiry for large-sized industrial facilities. Following the strong development progress achieved in the first half and the commencement of the final spec units at Oakdale West, we expect this estate to be fully built out by the end of FY24.

As we recently announced, we have now achieved development approval at Oakdale East Stage 2, and this extends our development pipeline by a further five years. Given the limited supply of appropriately zoned and approved land in Western Sydney that is available for large-scale industrial development, this is a significant milestone.

In an extremely tight industrial property market, we are able to offer prospective tenants large lot sizes in prime locations, facilities of unrivalled quality, and a proven track record of delivering new developments on time and on budget.

The post Is it too late to buy Brickworks stock? appeared first on The Motley Fool Australia.

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More reading

• Why did the Brickworks share price just smash another record?
• Seeking retirement income from ASX bank shares at 52-week highs? What I’d buy instead
• How did the Brickworks share price just hit an all-time high?
• Buying Soul Patts shares? Here’s what you’re really buying
• How I built $5,000 of passive income starting with $0

Motley Fool contributor Tristan Harrison has positions in Brickworks. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Brickworks and Goodman Group. The Motley Fool Australia has positions in and has recommended Brickworks. The Motley Fool Australia has recommended Goodman 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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