Tag: Stock pick

It is not always comfortable buying ASX growth shares during periods of market volatility.

In fact, it often feels easiest to buy them when prices are rising and confidence is high. The story sounds better, the outlook feels clearer, and momentum is on your side.

But that is usually not when the best long-term opportunities appear.

After the recent pullback in global markets, I find myself looking at growth shares a little closer. Because this is often when sentiment and fundamentals start to diverge.

When great ASX growth shares are marked down

One thing I have noticed over time is that high-quality ASX growth shares rarely stay cheap for long.

But they do get sold off.

Sometimes it is because of rising interest rates. Sometimes it is macro uncertainty. And sometimes it is simply a shift in market mood.

Businesses like Wisetech Global Ltd (ASX: WTC), TechnologyOne Ltd (ASX: TNE), and Life360 Inc. (ASX: 360) have all seen their share prices pull back despite continuing to execute operationally.

That disconnect is what I find interesting.

Because if the long-term outlook remains intact, a lower share price can quietly improve future return potential.

The trade-off never really disappears

That said, I do not think growth investing suddenly becomes easy just because prices fall.

The trade-off is always there.

You are often paying a premium for companies that are expected to grow strongly into the future. That means expectations matter. Execution matters. And sentiment can shift quickly.

Even after a correction, many growth shares are not cheap in a traditional sense.

But I think that misses the point slightly.

For me, the question is less about whether a stock looks cheap today and more about whether the business can be meaningfully larger and more profitable in five or ten years.

Why I think this environment is interesting

What makes the current environment stand out to me is the combination of uncertainty and structural growth.

On one hand, there are still macro concerns floating around. Interest rates, artificial intelligence (AI) concerns, global growth fears, and market volatility have not disappeared.

On the other hand, many of the long-term drivers behind growth companies remain intact.

Digital transformation is still ongoing. Healthcare innovation continues. Enterprise software adoption is not slowing down.

That tension can create opportunities.

Not obvious ones. Not risk-free ones. But opportunities to build positions in businesses that might otherwise always feel just out of reach.

How I would approach it

If I were looking at ASX growth shares today, I would focus on building positions gradually.

Adding over time helps smooth out volatility and removes the pressure of needing to get the timing exactly right.

I would also stay selective.

Not every company that falls is a good opportunity. For me, it comes back to quality. Strong balance sheets, clear competitive advantages, and a track record of execution.

That is what gives me confidence to hold through the inevitable ups and downs.

Foolish takeaway

Growth investing never really feels easy, and that is probably a good thing.

Right now, I think we are in one of those periods where high-quality ASX growth shares are being viewed with a bit more caution.

For long-term investors, that can be an opportunity because the gap between sentiment and long-term potential may be starting to open up again.

The post Is now the perfect time to buy ASX growth shares? appeared first on The Motley Fool Australia.

More reading

• 3 ASX tech stocks that belong in every long-term portfolio
• 3 strong ASX growth shares I want to buy in April
• 5 ASX 200 shares including WiseTech and Xero plumbing new 52-week-plus lows on Monday
• Got $5,000 to invest? Here are 2 ASX tech stocks to buy today
• 2 ASX shares highly recommended to buy: Experts

Motley Fool contributor Grace Alvino 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 Life360, Technology One, and WiseTech Global. The Motley Fool Australia has positions in and has recommended Life360 and WiseTech Global. The Motley Fool Australia has recommended Technology One. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Challenger Ltd (ASX: CGF) share price is in focus today after the company welcomed APRA’s new capital framework for longevity products, due to start from July 2026. Challenger expects the move will lower required capital and reduce risk for lifetime income product providers.

What did Challenger report?

• APRA finalised changes to capital settings for longevity product providers, effective 1 July 2026
• Reforms expected to lower required capital and cyclical risk for Challenger
• Challenger to detail business impacts at Investor Day on 26 May 2026
• Challenger Life remains Australia’s largest provider of annuities

What else do investors need to know?

Challenger has welcomed APRA’s reforms, saying they represent the biggest changes for longevity product providers in a generation. The company believes these changes will help develop Australia’s retirement income market as more Australians enter retirement each year.

Challenger operates both a fiduciary funds management division and an APRA-regulated Life division. The business remains firmly focused on providing customers with financial security in retirement.

What did Challenger management say?

Managing Director and Chief Executive Officer Nick Hamilton said:

We strongly welcome APRA’s reforms, which represent the biggest changes for providers of longevity products in a generation. For Challenger, it will lower the levels of required capital and cyclical risks to our capital position during times of market stress, while maintaining policyholder security.

What’s next for Challenger?

Challenger plans to work through the details of the new capital standards and will provide more information about their impact at its upcoming Investor Day in May 2026. The company continues to advocate for policy changes that support retirees’ financial confidence and improve the sustainability of lifetime income products.

Investors can expect further updates as Challenger refines its approach in light of these regulatory changes, helping position the business for the future.

Challenger share price snapshot

Over the past 12 months, Challenger shares have risen 38%, outperforming the S&P/ASX 200 Index (ASX: XJO) which has risen 8% over the same period.

View Original Announcement

The post Challenger shares in focus as APRA unveils new capital rules appeared first on The Motley Fool Australia.

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• Here are the top 10 ASX 200 shares today

Motley Fool contributor Laura Stewart 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 Challenger. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial summary of the company announcement. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.

S&P/ASX 200 Index (ASX: XJO) gold stock West African Resources Ltd (ASX: WAF) is marching higher today.

West African Resources shares closed yesterday trading for $3.05. In late morning trade on Tuesday, shares are swapping hands for $3.09 apiece, up 1.3%.

For some context, the ASX 200 is down 0.2% at this same time, while the S&P/ASX All Ordinaries Gold Index (ASX: XGD) is down 0.3%.

Here’s why West African shares are outperforming today.

(* Note, all figures below in US dollars unless otherwise specified.)

ASX 200 gold stock lifts on record production outlook

West African shares are outperforming today after the unhedged gold miner released its production guidance for calendar year 2026 and its 10-year production outlook.

As for the year ahead, the ASX 200 gold stock forecasts production of 430,000 ounces to 490,000 ounces of gold. The high end of that guidance represents a 63% increase from the 300,000 ounces of gold West African produced in 2025.

The company expects to produce this gold at an all-in sustaining cost (AISC) of $1,900 per ounce.

And with plans to increase its gold resources and extend mine lives, the miner is aiming to drill some 100,000 metres across its Sanbrado and Kiaka assets, both located in Burkina Faso, in 2026.

Amid strong operations, West African Gold said it is also considering share buybacks or declaring a maiden dividend in 2026.

“2026 is set to be a record production year for WAF as we will see a full year of operation from Kiaka for the first time, and another solid year of production from Sanbrado is expected,” West African Gold CEO Richard Hyde said.

What’s ahead for West African Gold shares?

Looking to the decade ahead, the ASX 200 gold stock released an updated Resources, Reserves and 10‐year production outlook.

West African’s Reserves increased to 7 million ounces of gold, while its Mineral Resources increased to 13.7 million ounces of gold.

Over the 10 years from 2026 to 2035, the miner expects to produce 5.3 million ounces of the yellow metal. Annual gold production is forecast to peak at 596,000 ounces in 2030.

And Hyde noted that those production figures could ramp up following ongoing exploration.

He said:

We see potential to improve annual production further through our ongoing drilling programs where we plan to drill more than 100,000 metres annually targeting extensions at M5 South underground, beneath M5 North open-pit and Toega underground.

Despite the March retrace following the onset of the Iran war and resulting decline in global gold prices, shares in the ASX 200 gold stock remain up 32% in 12 months.

The post Guess which ASX 200 gold stock is lifting off today on record breaking news appeared first on The Motley Fool Australia.

More reading

• West African Resources: 2026 production guidance forecasts record gold output
• 2 ASX gold miners to buy for solid share price gains, according to Barrenjoey
• Here are the top 10 ASX 200 shares today
• Why Challenger, Meeka Metals, Vulcan Energy, and West African Resources shares are rising today
• Why is this $3 billion ASX 200 gold stock leaping higher on Tuesday?

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.

Passive income gets talked about a lot in investing circles.

The idea is simple. Build a portfolio, collect dividends, and let your money do the work for you.

But I think it is worth asking a more honest question.

Is it actually achievable in a meaningful way, or is it just a nice concept on paper?

Where the income really comes from

When people talk about passive income on the ASX, they are usually talking about dividends.

And to be fair, Australia is a strong market for that.

Companies like Commonwealth Bank of Australia (ASX: CBA), Telstra Group Ltd (ASX: TLS), and Transurban Group (ASX: TCL) have built reputations for returning cash to shareholders over time.

There are also ETFs like the Vanguard Australian Shares High Yield ETF (ASX: VHY), which package that income focus into a single investment.

On the surface, it can look relatively straightforward. Buy income-generating assets and collect the distributions.

But I think the reality is a bit more nuanced.

The capital requirement is often underestimated

One thing that stands out to me is how much capital is usually required to generate meaningful income.

For example, a portfolio yielding around 4% would generate $4,000 per year from a $100,000 investment.

That is not insignificant, but it is also not life-changing for most people.

To generate $40,000 per year at that same dividend yield, you would be looking at a $1 million portfolio.

That is where the challenge becomes clearer.

Passive income from shares is achievable, but it typically sits at the end of a long period of saving and investing, not at the beginning.

Yield is only part of the story

Another thing I think is important is not to focus solely on yield.

High dividend yields can sometimes signal risk rather than opportunity.

If a company is paying out a large portion of its earnings, it may have less flexibility to reinvest in growth or to navigate tougher conditions.

That is why I think a mix is best.

Some income-focused holdings, but also businesses that can grow their earnings over time. Because growing earnings can lead to growing dividends.

And that is where the real compounding effect starts to show up.

Building toward it over time

Personally, I do not think of passive income as something you switch on.

I think of it as something you build toward.

In the earlier stages, the focus might be more on growth. Increasing the size of the portfolio.

Over time, as the portfolio becomes larger, income naturally becomes more meaningful, even without dramatically changing the strategy.

That shift tends to happen gradually, almost without noticing at first.

Foolish Takeaway

Passive income from ASX shares is absolutely achievable.

But I think it is important to frame it realistically.

It usually requires time, consistency, and a meaningful amount of capital. It is less about finding the perfect high-yield stock and more about building a portfolio that can grow and generate income over many years.

The post Is passive income from ASX shares really achievable? appeared first on The Motley Fool Australia.

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Motley Fool contributor Grace Alvino has positions in Commonwealth Bank Of Australia and Transurban Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Transurban Group. The Motley Fool Australia has positions in and has recommended Telstra Group and Transurban Group. The Motley Fool Australia has recommended Vanguard Australian Shares High Yield ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

KMD Brands Ltd (ASX: KMD) has revealed it made a net loss for the first half and will raise NZ$65.3 million at a steep discount to its current trading price, while its shares will remain in a trading halt for now.

The company, which owns the Rip Curl and Kathmandu brands, placed its shares in a trading halt on Wednesday last week while it sought to finalise the capital raise, which The Australian reported was initially seeking to raise NZ$100 million.

Capital raise details revealed

The company this morning said it would raise NZ$65.3 million at a 69.2% discount to its last trading price on the New Zealand Stock Exchange, where its shares last changed hands for NZ19.5 cents.

KMD said it would raise NZ$6.8 million from institutional shareholders and another NZ$58.5 million from current shareholders in a fully underwritten offer.

The company has asked that its shares remain suspended from trade while it finalises the institutional tranche of the new share offer.

Sales up but books in the red

On the operational front, the company published its first-half results, with group sales up 7.3% to NZ$505.4 million, but the company posted a net loss of NZ$13.1 million.

Kathmandu was the standout performer for the group in terms of revenue increase, with sales up 12.3% and EBITDA improving from a NZ$12.8 million loss to a NZ$2.4 million loss.

Rip Curl sales were up 4.6% while EBITDA fell 13% to NZ$20.5 million.

KMD Brands Chief Executive Brent Scrimshaw said regarding the result:

Since launching our Next Level strategy, we have accelerated the pace and quality of execution and returned each of our brands to growth in a short timeframe. Strong early progress has been made against our key initiatives, giving us further conviction in our potential. We’re particularly encouraged by the improved performance of Kathmandu, which has delivered double-digit same store sales growth for the first time in over two years. It’s also pleasing to see consumers responding positively to our accelerated product freshness, flow and assortment, along with a renewed focus on innovation. While Rip Curl has navigated more volatile global trading conditions, we remain confident that the brand’s repositioning will drive long-term growth and youthful energy, connected to the next generation of core surf and beach consumers.

The company had net debt at the end of January of NZ$94 million.

On the outlook, KMD said Kathmandu had continued its recent sales momentum in the first six weeks of the second half, “with the key Autumn and Winter trading periods still to come”.

The company added:

Rip Curl and Oboz wholesale order books for 2H FY26 are in line with last year, with the Europe and North America summer season to come. Gross margin expansion is anticipated YOY in 2H FY26, reflecting actions taken to offset the US tariffs, and cycling specific clearance of inventory in the second half of last year.

Oboz is the company’s footwear division.

KMD’s Australian-traded shares last traded at 15.5 cents, valuing the company at $110.3 million.

The post KMD Brands shareholders to be stung with a hugely discounted capital raise appeared first on The Motley Fool Australia.

More reading

• What’s going on with KMD Brands shares?
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• Which ASX retail company just rejected a deal to buy its Rip Curl stores?

Motley Fool contributor Cameron England 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.

The lower the valuation of stocks go in April, the stronger the long-term returns could be. There are a few impressive ASX shares investments that could be excellent buys.

I think the best businesses to buy are ones that have strong compounding potential of the earnings. Some companies are already large and aren’t likely to grow earnings strongly, while others could multiply their own profit over the next several years.

I’m excited by the long-term trajectory of the investments below.

Nick Scali Ltd (ASX: NCK)

Nick Scali is a leading furniture retailer in Australia (and New Zealand) with a large store network. In recent years, it has acquired both Plush in Australia and Fabb Furniture in the UK, giving it more avenues for earnings growth.

The ASX share is exposed to consumer spending, so there are certainly cycles in how much demand there is for furniture. But, I think Nick Scali is one of the best operators in the furniture space, for example with its high return on equity (ROE) and strong gross profit margin.

I don’t know how consumer demand will perform in the next several months, but it’s clear that the Nick Scali share price is already down 35% this year. I think that the size of the decline makes this a great time to invest.

I’m particularly excited by the potential of the company to bring its Nick Scali products (and margins) to the UK business, expanding its UK store network, and paying a good dividend.

According to CMC Invest, the Nick Scali share price is currently trading at 17x FY26’s estimated earnings, at the time of writing.

Tuas Ltd (ASX: TUA)

I view Tuas as one of the most underrated ASX growth shares. I’m going to highlight a few exciting elements of the business.

Firstly, it’s a fast-growing Singaporean business which is rapidly gaining market share.

The company reported that in the first six months of FY26, revenue increased 26% to $91.9 million and underlying operating profit (EBITDA) climbed by 27%.

This revenue growth was largely driven by a 21.7% rise in the number of active mobile subscribers to 1.4 million. Broadband subscribers grew by approximately 32,000 to 46,133 as it started to gain traction.

Another big positive is that its underlying profit is improving, as shown by EBITDA margin increasing to 46%, up from 45%. That means each new revenue dollar this year is more profitable than last year, which bodes well for net profit growth to accelerate in the coming years.

I’m also excited by the potential of Tuas merging with M1, one of its main smaller rivals in Singapore, giving the business a significant boost in scale benefits and profit.

In five years, I think the ASX share could be a much bigger business as it wins more subscribers thanks to its focus on offering value. Additionally, expansion into another country by Tuas would significantly improve its growth prospects.

The post 2 incredible ASX shares to buy in April appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in Tuas. 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 Nick Scali. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Collins Foods Ltd (ASX: CKF) shares are slipping today.

Shares in the S&P/ASX 300 Index (ASX: XKO) KFC fast food restaurant operator closed yesterday trading for $8.78. In early morning trade on Tuesday, shares are changing hands for $8.62 apiece, down 1.8%.

For some context, the ASX 300 is down 0.2% at this same time.

Here’s what’s happening.

Collins Food shares slide on Taco Bell divestment

Atop its KFC restaurants, the ASX 300 stock also operates 27 Taco Bell outlets in Australia.

But, as investors have been expecting, that era is coming to an end.

Collins Food shares are slipping today after the company announced it has entered into a legally binding conditional arrangement to transition 20 of its 27 Taco Bell restaurants to an affiliated company of Taco Bell (part of YUM! Brands) and Restaurant Brands Australia Holdings.

The two parties are expected to operate the Taco Bell business going forward under a new partnership arrangement. The deal also covers the restaurants’ employees, if they choose to accept offers of employment from the new owners.

The seven remaining Taco Bell restaurants will be closed over the next few weeks.

Collins Foods expects to incur one-off costs of $1 million to $2 million related to the closure of these seven restaurants.

The sale won’t offer a big cash boost for Collins Foods shares, with the company saying the purchase price comprises “a nominal amount” plus the value of stock and cash floats. The new owners will assume the lease liabilities for the 20 restaurants.

Following its Taco Bell divestment, however, Collins Foods said it can now focus on its core KFC brand. The ASX 300 stock has KFC outlets in Australia and Europe, with a particular growth focus in Germany.

What did management say?

Commenting on the divestment that’s yet to lift Collins Foods shares today, CEO Xavier Simonet said:

Collins Foods is pleased to announce the transition of 20 Taco Bell restaurants to the brand owner, Taco Bell, and its local partner, subject to completion of the proposed transaction. This will enable Collins Foods to focus on our core KFC business in Australia and Europe, including accelerating profitable development in Germany.

Simonet added, “We are committed to ensuring a smooth transition and to supporting all our team, whether transitioning or otherwise, through this process.”

Collins Food expects the sale to complete between June and August, depending on regulatory approval timelines and the purchasing parties finalising their terms.

With today’s intraday slide factored in, Collins Foods shares remain up a slender 0.5% since this time last year, not including dividends.

The post KFC owner Collins Foods shares sliding on Taco Bell exit appeared first on The Motley Fool Australia.

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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 recommended Collins Foods. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Andean Silver Ltd (ASX: ASL) shares are slipping on Tuesday after the explorer released another strong drilling update before the market open.

At the time of writing, the Andean Silver share price is down 1.58% to $1.87, extending its losses from last week’s pullback.

The stock remains down almost 22% since the start of 2026, showing just how volatile sentiment has been this year.

The latest move comes despite the company reporting more high-grade drilling success at its Cerro Bayo silver-gold project in Chile.

Let’s take a closer look.

More strong drilling results from Cerro Bayo

According to the ASX release, Andean Silver delivered another batch of strong assay results from the Cerro Bayo project.

Ongoing drilling continues to extend known mineralisation while giving the company more confidence in the overall resource base.

Some of the standout results included 68.3 metres at 65g/t silver equivalent from the Appaloosa Breccia zone, including a much higher-grade 1.3 metres at 1,523g/t silver equivalent.

The company also reported 33.2 metres at 75g/t silver equivalent, with several smaller high-grade sections inside that result.

These results are expected to feed into a mineral resource update planned for the June quarter.

The current Cerro Bayo resource already stands at 9.8 million tonnes grading 353g/t silver equivalent for 111 million ounces of contained silver equivalent.

Why investors are looking beyond the recent volatility

Investors seem to be looking past the recent share price volatility and focusing more on the growing scale now emerging across multiple target zones.

Today’s announcement also showed progress across Temer, Coyita North, and the Appaloosa Breccia, with management saying the updated resource is expected to support restart studies later this year.

The company also remains well funded, with roughly $56.1 million in cash following its recent capital raising. This gives it the flexibility to keep drilling aggressively through 2026.

That strong cash position also lowers near-term funding concerns and gives investors a clearer path to the June catalyst.

Foolish Takeaway

While the share price is still down quite a bit in 2026, the new drilling results continue to support the view that Cerro Bayo could become a much larger and more defined silver-gold asset over time.

The June quarter resource update now looks like the next major event that could decide whether this rebound has more room to keep going.

A stronger June resource update could give investors more confidence in plans to bring the project back into production.

The post This ASX mining stock is heading south again today. Here’s why appeared first on The Motley Fool Australia.

More reading

• Why are these ASX silver stocks racing higher today?

Motley Fool contributor Aaron Teboneras 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.

There are numerous potential picks retirees could make for their portfolio. I think Washington H. Soul Pattinson and Co Ltd (ASX: SOL) ticks many of the boxes older (and younger) Australians may be looking for. Soul Patts shares may not be very famous, but I think they should be.

The first thing to know is that the business has already displayed excellent longevity in that it’s more than 120 years old and has been listed on the ASX for all those years.

It started as a pharmacy business, which is where the Soul Pattinson Chemist chain got its name. However, Soul Patts divested its stake in the chemist business a few years ago.

There are a few reasons why I think it’s a wonderful pick for retirees, so let’s get into those.

Great diversification

Many of the largest ASX dividend shares we can invest in generate most/all of their earnings from a specific sector, such as banking, mining, telecommunications, and so on.

Soul Patts has built a very diversified portfolio after making numerous investments over the decades. Now it’s invested in a number of different areas such as sizeable listed companies, ‘real assets’ (real estate, agriculture, water, and data centres), emerging companies, credit and private companies.

Some of the main sectors it has exposure to through its company investments include energy, communication services, mining, financials, industrials, retail, healthcare, building products, swimming schools, and electrification.

Soul Patts shares can give retirees a significant level of uncorrelated asset diversification, while also enabling the business to search far and wide (including internationally) for great investment opportunities.

As the years go by, I expect the Soul Patts portfolio will continue to modernise and become even more growth focused.

Incredible dividend record

I’m sure most retirees reading this want to know about the dividend, so let’s talk about its incredible record.

Soul Patts has grown its regular annual payout every year for 28 years in a row. No other business on the ASX has the same track record of consistent dividend growth. I’m expecting the company to reach 30 years of consistent dividend growth and more.

Another fact worth knowing is that it has paid a dividend every single year of its existence, going back 120 years, including through the wars, pandemics, and recessions.

This business is very committed to paying dividends to shareholders.

It recently grew its HY26 interim dividend by 9.1% to 48 cents per share. It now has a grossed-up dividend yield of 3.8%, including franking credits.

If the ASX dividend share continues to generate cash flow from its own investments, I’d say shareholders have a great chance of seeing growth for the foreseeable future.

Long-term capital growth

Soul Patts is not just a dividend machine, but it is also growing its share price over time thanks to the increasing value of its portfolio.

The portfolio is growing organically as its business investments naturally grow in size as they deliver on their own plans.

Soul Patts is also able to make new buys with some of the investment cash flow from its portfolio that it retains (after paying for operating expenses and giving shareholders a larger dividend).

With its HY26 result, Soul Patts noted that in the past 25 years, it has delivered an average total shareholder return (that’s capital growth plus dividends) of 12.9% per year, outperforming the total return of the S&P/ASX 200 Index (ASX: XJO) by 4.6% per year. Those returns show plenty of capital growth for investors.

I think this is one of the most effective investments retirees can buy for their portfolio for the long term.

The post Why Soul Patts shares are a retiree’s dream appeared first on The Motley Fool Australia.

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• 3 reliable ASX dividend shares for set-and-forget investing
• 3 reasons why I think Soul Patts shares are a better buy than ever
• Here are the top 10 ASX 200 shares today
• Everything you need to know about the latest Soul Patts dividend
• Soul Patts shares push higher on profit jump and 28th dividend increase in a row

Motley Fool contributor Tristan Harrison has positions in Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Shares in Pinnacle Investment Management Group Ltd (ASX: PNI) are trading not far off their 12-month lows, with at least one broker tipping there’s plenty of share price upside to be had from here.

Canaccord Genuity has issued a research note to its clients recently, with a very bullish price target on the funds manager, which we’ll get to shortly.

Firstly, what does the company do?

Pinnacle offers the ability to invest in products offered by a range of different “affiliates” – themselves major fund managers and investors – with both retail and wholesale investors catered for.

Strong capital flows

In its most recent half-year results, Pinnacle said it had experienced record net inflows of $17.2 billion, with $6.8 billion in retail inflows, $7 billion in institutional, and $3.4 billion in international inflows.

Pinnacle Chair, Alan Watson, said of the results:

Our broad platform of Affiliates and strategies, together with increasing presence in much larger addressable end markets, has underpinned a strong net flow outcome for the half, which will drive revenue growth in future periods. It is pleasing that all existing Affiliates are profitable with revenues and core earnings continuing to build. Finally, we are delighted to welcome our nineteenth Affiliate, Advantage Partners of Japan, and today announce further investment into Pacific Asset Management. We are confident that both of these growth initiatives will be to the benefit of our clients, people and shareholders.

Pinnacle’s first-half net profit was $67.3 million, down 11% on the previous corresponding period, and the company said it had about $110 million of “dry powder” available to invest at the end of the half.

In its research note to its clients, Canaccord said it has its eye on one Pinnacle affiliate in particular in Metrics, which gives investors exposure to Australian corporate loans.

As they said:

We believe FY26 will be the breakout year for Metrics following the ingestion and optimisation of several acquisitions that should finally begin to yield fruit. Performance is tracking well across all major Metrics’ funds financial year to date with asset under management holding steady since the December half, highlighting that despite fears of an en-masse redemption wave and liquidity shortfall, the numbers don’t currently support this but will be a watching brief with the detailed disclosures provided by Metrics at the fund/trust level highlighting a position of significant strength.

Shares looking cheap

Canaccord has a price target of $24.53 on Pinnacle shares, down from $27.22, but still well above the current price of $13.56.

Pinnacle was removed from the S&P/ASX 100 Index (ASX: XTO) in the most recent rebalance, which became effective on March 23.

Pinnacle was valued at $3.17 billion at the close of trade on Monday.

The post This beaten-down ASX financial stock could deliver returns of better than 80% appeared first on The Motley Fool Australia.

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Motley Fool contributor Cameron England 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 Pinnacle Investment Management Group. The Motley Fool Australia has positions in and has recommended Pinnacle Investment Management Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.