Tag: Stock pick

Zip Co Ltd (ASX: ZIP) shares were on fire in April and were among the best performers on the ASX 200 index.

During the month, the buy now pay later (BNPL) provider’s shares rocketed approximately 55%.

Let’s see why investors were fighting to get hold of them.

Why did Zip shares rocket in April?

Investors were bidding its shares higher last month after it released an impressive quarterly update.

At a time when many in the market were expecting the BNPL provider to be struggling, it outperformed expectations and even upgraded its guidance.

According to the update, Zip achieved record cash EBTDA of $65.1 million for the third quarter, which is a 41.5% increase on the prior corresponding period.

The key driver of this was its strong total transaction volume growth. Zip revealed growth of 22.4% year on year to $4 billion. This underpinned total income growth of 20.2% to $335.2 million for the three months.

Another positive was that Zip reported an expansion in its operating margin to 19.4%. This is up from 16.5% a year earlier.

Commenting on its performance, Zip’s CEO and managing director, Cynthia Scott, said:

Zip’s resilient business model continues to drive increased profitability at scale, delivering record cash earnings of $65.1m, up 41.5% year on year. Operating margin expanded 292bps to 19.4%, reflecting strong unit economics and significant operating leverage. Momentum continued across both markets, underpinned by deepened customer engagement and disciplined execution.

But as mentioned above, the major highlight was arguably the guidance upgrade.

It now expects group cash EBTDA of at least $260 million for the full year. This is a 4.6% increase on its previous guidance of approximately $248.6 million.

Cynthia Scott added:

Following a strong third quarter performance, we have upgraded our FY26 Group cash EBTDA guidance to be no less than $260.0m, while reconfirming each of our FY26 target ranges.

Where next for its shares?

Despite rising strongly in April, a number of brokers see significant upside for Zip shares. One of them is Ord Minnett, which responded to the update by retaining its buy rating with an improved price target of $4.00.

Based on its current share price of $2.46, this implies potential upside of over 60% for investors over the next 12 months.

Elsewhere, the team at Macquarie Group Ltd (ASX: MQG) has an outperform rating and $3.40 price target on Zip shares. This suggests that upside of almost 40% is possible from current levels.

The post Why Zip shares rocketed 55% in April (and could keep rising) appeared first on The Motley Fool Australia.

More reading

• These are the 10 most shorted ASX shares
• These ASX financial stocks are bouncing, is it just the start?
• The five best ASX 200 stocks to buy and hold in April revealed
• Why these ASX shares jumped 15%+ in April
• Prediction: Zip shares could fly another 121% higher

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

BHP Group Ltd (ASX: BHP) shares have been very strong performers over the past 12 months.

During this time, the mining giant’s shares have risen an impressive 45%.

While this is great for shareholders, it could mean that non-shareholders have missed the boat.

But don’t worry, because Bell Potter believes another ASX mining stock could be a top buy this month.

Which ASX mining stock?

The stock that Bell Potter is tipping as a buy this month is Develop Global Ltd (ASX: DVP).

It operates a hybrid model as an underground mining contractor and operator of three mining assets. These are the Woodlawn Zinc-Copper Mine, the Sulphur Springs Zinc-Copper Project, and Pioneer Dome.

It is the latter project that has caught the eye of Bell Potter. It said:

We believe a spodumene DSO mining operation at Pioneer Dome is optimal with respect to the group’s capital management while delivering the fastest route to market for the project. Observed variability in DSO demand during prior cycles suggests acute sensitivities to lithium chemical and spodumene concentrate prices.

As such, we envisage Pioneer Dome production cadence to be highly responsive to lithium chemical supply-demand imbalances. A relatively simple mine, crush and haul operation at Pioneer Dome would have a relatively short ramp-up and ramp-down timeline. We therefore see Pioneer Dome’s economics based on favourable short-term lithium market fundamentals, operating only when DSO offtake and pricing underwrite a restart.

Bell Potter notes that Pioneer Dome could be important for the ASX mining stock. It points out that the cash flow it generates could be used to pay down debt at Woodlawn and fund the construction of Sulphur Springs. The broker explains:

Pioneer Dome’s importance should be seen through the lens of short-term operating cash flow generation. Pioneer Dome operating cash flows could be used to settle outstanding Woodlawn debt, partly finance the construction of Sulphur Springs’ processing plant and provide balance sheet flexibility to enable another mining asset acquisition.

Strong potential returns

According to the note, Bell Potter has retained its buy rating and $6.60 price target on the ASX mining stock.

Based on its current share price of $5.38, this implies potential upside of 23% for investors over the next 12 months.

Commenting on its buy recommendation, Bell Potter said:

Pioneer Dome’s importance lies in its ability to provide timely liquidity for the Group, supporting de-leveraging and financing of Sulphur Springs construction. The resulting financial flexibility would allow DVP to act nimbly on any forthcoming organic and inorganic opportunities.

The post Forget BHP shares, this ASX mining stock could rise 20%+ appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Monday
• Buying ASX 200 mining shares? Here’s how Rio Tinto, Fortescue and BHP stacked up in April
• I’d buy BHP and these ASX 200 shares with $5,000 in May
• Big gains for BHP shares in April, but is the best still to come?
• How are Australia’s biggest ASX stocks really tracking in 2026?

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

It has been another rough session for Accent Group Ltd (ASX: AX1), with heavy selling following a fresh update to the market.

At the time of writing, the retailer’s shares are down 14.11% to 53.3 cents.

That drop has pushed the stock back to levels not seen since June 2013, wiping out years of gains.

Shares are now down around 25% over the past month and roughly 71% over the past year.

The move comes after the company released a trading update alongside news of an ASIC investigation.

Let’s take a closer look at the announcement.

Profit outlook cut after tough April

In its release, Accent said trading was broadly in line with expectations through to the end of March, but conditions became more difficult as April progressed.

The company pointed to weaker consumer confidence, higher fuel prices, and geopolitical tensions as key factors hitting both sales and margins.

For the first 18 weeks of the second half, total sales rose 7.1%, though like-for-like retail sales slipped 1%, while gross margin also eased to 54.2%, down 80 basis points on last year.

Those pressures are now starting to show up in the earnings outlook.

Accent now expects the second-half EBIT to land between $23 million and $28 million, including $2 million in restructuring costs tied to a planned cost-out program.

Full-year EBIT is now expected to come in between $79.5 million and $84.5 million.

Back in February, the company was guiding to $30 million to $35 million for the second half, so this has been a clear step down.

ASIC investigation adds uncertainty

Alongside the trading update, Accent confirmed it has received notices from ASIC requesting information as part of an investigation.

The probe relates to suspected contraventions of the Corporations Act tied to trading in the company’s securities between 23 May and 10 June 2025.

The investigation involves CEO Daniel Agostinelli, Non-executive director Michael Hapgood, and another senior employee.

No charges have been laid, and the company said there are no allegations against the business itself.

Accent also noted that Agostinelli’s share sales were pre-approved and that he retains the full support of the board. Hapgood has advised that he did not trade during the relevant period.

The company said it is cooperating with ASIC.

Foolish bottom line

There are a few moving parts here, but the downgrade looks to be doing most of the damage.

The retail environment is already a tough space, and the latest update shows how quickly conditions can turn against the business.

Sales growth is still positive on the surface, but margins and like-for-like performance are going the other way.

The ASIC investigation adds another issue for investors to weigh up, even if no wrongdoing has been alleged.

Personally, I would stay away until things start to stabilise and margins improve.

The post Why Accent shares just crashed to a 13-year low appeared first on The Motley Fool Australia.

More reading

• Why A2 Milk, Accent, Endeavour, and Woodside shares are falling today
• Down 65%: Is this ASX 300 stock a cheap buy?
• 3 oversold ASX shares to buy with $10,000

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

If you are on the lookout for some new portfolio additions, then it could be worth hearing what analysts are saying about the ASX shares named below, courtesy of The Bull.

Are they bullish, bearish, or something in between? Let’s find out.

Commonwealth Bank of Australia (ASX: CBA)

The team at Alto Capital has named Australia’s largest bank as a sell this week.

Due to the bank’s premium valuation, it thinks the risk-reward balance favours taking profit on CBA shares now. It explains:

Australia’s largest retail bank enjoys a dominant position across mortgages, deposits and consumer banking. The company recently reported a record first half cash net profit after tax in 2026 of $5.445 billion, supported by lending growth and strong deposit volumes.

Recently, the share price had re-rated significantly and traded at a premium to domestic peers and global banking counterparts. With much of the operational strength already reflected in the valuation, the risk-reward balance favours taking profits at current levels.

South32 Ltd (ASX: S32)

Over at Fairmont Equities, it has named this mining giant’s shares as a hold this week.

However, the equities firm does believe that South32 shares have potential to rally strongly in the future. It said:

S32 is a diversified mining company. I expect base metals prices to continue trending higher this year to the benefit of S32. After a share price sell-down in February, the stock had mostly recovered by the end of March. I see a clear resistance zone around $4.80. Buyers are also stepping in on any dips. I’m confident S32 will rally strongly moving forward. The shares were trading at $3.935 on April 30.

Worley Ltd (ASX: WOR)

The team at Baker Young is positive on this engineering and construction services company and is tipping it as a buy this week.

It believes that Worley has a positive outlook thanks to its exposure to structural trends such as the de-globalisation of supply chains and energy efficiency. It explains:

Worley is an engineering and construction group. It recently stepped back from underlying earnings before interest and tax growth due to delays on Middle East projects. However, we believe the longer term outlook remains supportive. Structural trends, such as de-globalisation of supply chains and increasing investment in energy efficiency, align closely with WOR’s core capabilities.

Earnings volatility and missed expectations have weighed on sentiment. But the company is trading on an undemanding valuation relative to its medium term growth potential.

The post Buy, hold, sell: CBA, South32, and Worley shares appeared first on The Motley Fool Australia.

More reading

• Are CBA shares a buy amid record $5.5 billion first half cash profits?
• What happened with ASX 200 banks stocks NAB and CBA in April?
• How to shave a decade off retirement with 3 ASX stocks and ETFs
• 3 ASX dividend stocks with 4% yields to buy for a winning income portfolio
• How are Australia’s biggest ASX stocks really tracking in 2026?

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.

Commonwealth Bank of Australia (ASX: CBA) shares are slipping today.

Shares in the S&P/ASX 200 Index (ASX: XJO) bank stock closed on Friday trading for $173.04. In early afternoon trade on Monday, shares are changing hands for $172.22 apiece, down 0.5%.

For some context, the ASX 200 is down 0.4% at this same time.

If you’ve been following the price charts, you’ll know that shares in Australia’s biggest bank plumbed a one-year closing low of $147.22 on 21 January.

That means, despite today’s dip, CBA shares have gained 17.0% in just over three months.

And that doesn’t include the $2.35 a share fully franked interim dividend CommBank paid out on 30 March. If we add that back into today’s share price, then the cumulative value of CBA stock is up 18.6% since the 21 January lows.

A lot of those gains were achieved in the days following CBA’s half year results (H1 FY 2026) release on 11 February, with investors reacting enthusiastically to the big four bank’s all-time high half year cash profits.

“We have continued to execute our strategy with discipline, maintaining a strong focus on supporting customers while delivering sustainable outcomes for shareholders,” CBA CEO Matt Comyn said on the day.

Which brings us back to our headline question.

Should you buy CBA shares today?

Alto Capital’s Tony Locantro recently analysed the outlook for Australia’s biggest bank stock (courtesy of The Bull).

“Australia’s largest retail bank enjoys a dominant position across mortgages, deposits and consumer banking,” Locantro said.

As for CBA’s profitability, he noted, “The company recently reported a record first half cash net profit after tax in 2026 of $5.445 billion, supported by lending growth and strong deposit volumes.”

Despite that strong result, Locantro believes the ASX 200 bank stock could be trading in overvalued territory.

Summarising his sell recommendation on CBA shares, Locantro concluded:

Recently, the share price had re-rated significantly and traded at a premium to domestic peers and global banking counterparts. With much of the operational strength already reflected in the valuation, the risk-reward balance favours taking profits at current levels.

How does CommBank’s valuation compare to the other big four ASX 200 bank stocks?

CBA shares currently trade on a price to earnings (P/E) ratio of around 28 times.

That compares to a P/E ratio of around 19 times for Westpac Banking Corp (ASX: WBC) shares, a P/E ratio of around 18 times for ANZ Group Holdings Ltd (ASX: ANZ) shares, and a P/E ratio of around 18 times for National Australia Bank Ltd (ASX: NAB).

The post Are CBA shares a buy amid record $5.5 billion first half cash profits? appeared first on The Motley Fool Australia.

More reading

• Buy, hold, sell: CBA, South32, and Worley shares
• What happened with ASX 200 banks stocks NAB and CBA in April?
• How to shave a decade off retirement with 3 ASX stocks and ETFs
• 3 ASX dividend stocks with 4% yields to buy for a winning income portfolio
• How are Australia’s biggest ASX stocks really tracking in 2026?

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.

One of the hottest ASX mining stocks to own over the last year has been Viridis Mining and Minerals Ltd (ASX: VMM). 

It is an ASX listed exploration and development company. 

The business has seven projects across three countries, however the majority of the value in the business is focused on its Colossus ionic adsorption clay (IAC) project in Minas Gerais Brazil.

In the last 12 months, this ASX mining stock has rocketed 780% higher. 

That includes 100% year to date. 

However, today, its share price has dipped more than 5%. 

A new report from Bell Potter indicates it could be an opportunity to buy a quality stock at a value. 

Why has this mining stock been rising?

Veridis has been advancing its Colossus rare earths project in Brazil. The project is situated within the highly prospective Poços de Caldas rare earths complex.

Colossus is viewed as one of the most economically compelling rare earths developments worldwide.

A recent economic assessment indicates a potential 20-year initial mine life, alongside a relatively short two-year payback period for a proposed operation at the project.

In addition, rising geopolitical tensions heightened concerns over global supply, with China accounting for around 60% of global rare earths production and more than 90% of refining capacity.

This makes Viridis an attractive rare earths miner. It is well positioned as a potential Western-aligned alternative source of supply. This is along with a large-scale, relatively low-payback project.

What is Bell Potter’s updated view

The broker said the recent 3QFY26 report highlighted the meaningful progress made in derisking the Colossus Rare Earth Project (Colossus) in Minas Gerais, Brazil. 

All equipment for the CPTR/MREC demonstration plant was delivered to site with building works completed and utilities installed, with commissioning targeted for early May 2026.

Bell Potter said VMM had a very busy quarter. Additionally, it is making solid progress across several important parts of its project.

Key workstreams like the feasibility study, engineering contracting, approvals, and commissioning are all approaching important milestones. 

Because multiple steps are advancing at the same time, it lowers the risk that a single problem could cause major delays.

Overall, the message is that the project is tracking well toward its expected final investment decision around Q3 2026.

Speculative buy rating retained

Based on this guidance, Bell Potter has retained its speculative buy rating on this ASX mining stock. 

The broker also has an unchanged price target of $4.30. 

This ASX mining stock has dipped more than 5% this morning, which has created more value moving forward. 

From today’s share price of approximately $2.55, this indicates an upside potential of more than 68%. 

The post Why investors should buy the dip on this ASX mining stock appeared first on The Motley Fool Australia.

More reading

• Buy, hold, sell: CBA, South32, and Worley shares
• Are CBA shares a buy amid record $5.5 billion first half cash profits?
• BrainChip shares rocket 6% on new chip deal
• Why are A2 Milk shares crashing 13% to fresh 52-week lows?
• Why value investing is back: Expert

Motley Fool contributor Aaron Bell 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.

BrainChip Holdings Ltd (ASX: BRN) shares are back in focus on Monday after a new announcement landed before market open.

At the time of writing, the BrainChip share price is up 6.45% to 16 cents.

Adding in today’s increase, the stock has now climbed about 13% over the past month.

But while this shows some momentum, it remains down roughly 35% over the past year on the back of a weakened tech sector.

Here’s what the company just reported to the market.

New licensing deal opens another pathway

In its release, BrainChip announced it has entered into an IP licence agreement with South Korea-based Asicland Co Ltd (KOSDAQ: 445090).

The deal gives ASICLAND non-exclusive, worldwide access to BrainChip’s Akida neuromorphic AI technology. This allows ASICLAND to integrate Akida into its own system-on-chip designs for customers across multiple industries.

There is also a pathway from evaluation into full production.

ASICLAND can start with prototype and testing licences, then convert those into production licences if projects move forward.

BrainChip keeps ownership of its intellectual property and retains the option to work directly with end customers on additional services.

How the commercial model works

The structure follows a familiar model used across the semiconductor IP industry.

There are upfront fees for evaluation and production, along with ongoing royalties tied to chip sales. Extra service fees can also come into play depending on the level of support required.

Management said it’s too early to put a figure on it, but expects the agreement to contribute revenue over time.

ASICLAND is positioned as both an enabler and a channel partner. It designs custom silicon solutions and works with customers across edge AI, industrial, automotive, and IoT markets.

Why investors are paying attention

Deals like this usually get attention because they show the tech is starting to move beyond development.

BrainChip has spent years developing its neuromorphic technology. What investors want to see now is evidence that it is being picked up and used in real products.

This agreement adds another partner to the ecosystem and creates more potential entry points into customer programs.

But while it does not guarantee near-term revenue, it does add more opportunities if these projects move forward.

Foolish Takeaway

This is another step forward for BrainChip, but there is still a significant gap between signing deals and seeing actual revenue.

Licensing agreements only start to matter once they move into production and generate ongoing royalties, which takes time and depends on customer uptake.

With this in mind, I would be watching from the sidelines until these partnerships come to fruition.

The post BrainChip shares rocket 6% on new chip deal appeared first on The Motley Fool Australia.

More reading

• Why Brainchip, Minerals 260, Nuix, and Weebit Nano shares are racing higher today
• Why Brainchip, Fortescue, IGO, and Life360 shares are tumbling 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.

ASX share A2 Milk Company Ltd (ASX: A2M) plunged to fresh 52-week lows on Monday. The stock initially fell as much as 18% before recovering to $6.35 in afternoon trade, still down almost 13%.

The decline followed news that the company had recalled multiple batches of infant formula sold in the US over contamination concerns.

Today’s fall comes on top of an already brutal month for the ASX share. It’s now down roughly 31% over the past month as investor sentiment deteriorates quickly.

What triggered today’s sell-off?

The immediate catalyst was a voluntary recall of three batches of A2 Platinum Premium infant formula sold in the US after testing detected trace levels of a toxin known as cereulide.

This is a heat-stable toxin produced by certain strains of Bacillus cereus bacteria. The concern is that it can survive normal food processing and, in sufficient quantities, may cause vomiting and gastrointestinal illness.

While regulators and the ASX share confirmed the issue following additional testing, there have been no reported illnesses linked to the affected products.

Why the market reacted so strongly

Even though the recall is limited, investors reacted sharply for several key reasons. First is reputational risk. Infant formula is one of the most sensitive food categories globally. Even small contamination events can significantly damage consumer trust.

Second is geographic exposure. ASX share A2 Milk earns a large portion of its revenue from China, where food safety concerns are historically heightened. Any negative headlines in this category can quickly influence brand perception and demand.

Third, this is not an isolated scare. Similar cereulide-related recalls have recently affected major global players such as Nestlé SA (XSWX: NESN) and Danone SA (XPAR: BN). This has increased investor sensitivity across the sector.

More than just the recall

The share price weakness is also being driven by broader concerns around execution and earnings momentum.

In April, the ASX share downgraded its FY2026 guidance, citing ongoing supply chain disruptions. The company now expects revenue growth in the low to mid double-digit range. That’s down from previous expectations of mid double-digit growth.

The company also downgraded EBITDA margins. The guidance is now at 14% to 14.5%, compared to the prior range of 15.5% to 16%. As a result, the business expects net profit after tax to be flat or slightly lower than FY2025.

These revisions reinforced investor concerns that operational challenges may be more persistent than previously anticipated.

Foolish Takeaway

The latest plunge in the ASX milk share reflects a combination of factors: a high-profile product recall, worsening sentiment around food safety risks, and already weakening financial guidance.

While underlying demand for infant formula remains solid, investors are clearly waiting for evidence that supply chain issues and execution challenges are under control before stepping back in.

The post Why are A2 Milk shares crashing 13% to fresh 52-week lows? appeared first on The Motley Fool Australia.

More reading

• Why A2 Milk, Accent, Endeavour, and Woodside shares are falling today
• The worst 4 ASX 200 stocks to buy and hold in April unmasked
• Why these top ASX shares sank 10%+ in April
• Buy, hold, sell: Pro Medicus, Life360, A2 Milk shares
• Nervous investors turn to ASX 200 defensives as global energy shock drags on

Motley Fool contributor Marc Van Dinther has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Nestlé. 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 many strategies used by Australian investors. Each comes with its own list of pros and cons. 

Some common strategies include: 

• Growth investing: focuses on buying stocks of companies expected to grow earnings or revenue faster than the overall market
• Dividend investing: focuses on buying stocks that pay regular cash dividends, providing a steady income stream along with potential capital appreciation
• ETF investing: focuses on exchange-traded funds (ETFs), which are baskets of securities traded on exchanges that offer diversification and typically track an index

While these strategies are all viable, a new report from VanEck has shed light on the broader market conditions that are making it favourable to return to a focus on value investing. 

What is value investing?

Value investing is an investment strategy that involves buying stocks that appear to be trading below their intrinsic value, often identified through fundamental analysis and popularised by investors like Benjamin Graham.

When investors target value stocks, they look for companies perceived to be trading at bargain prices relative to their underlying business performance. 

The idea underpinning value investing is that, over time, stock prices will reflect their intrinsic value. If a share’s price drops below its inherent value, it will eventually “correct” and move higher again. 

Value investors seek to profit over time by capitalising on these minor corrections in the share price.

According to VanEck, value investing was the go-to approach from the 1970s to the GFC. 

This was an era when interest rates and inflation were elevated, which saw investors gravitate towards those companies trading at lower valuation multiples and strong tangible cash flows, contributing to outperformance relative to growth companies.

The case for value investing in today’s market

VanEck said there are several signs that suggest we could be in the early stages of a value market.

Firstly, inflation pressure could stay elevated. 

The ongoing oil crisis, alongside other factors such as historically high global government debt, could sustain inflationary pressure in the US, with potential global spillovers. While markets have priced in a quick resolution to the US-Iran conflict, oil prices remain up more than 56% from six months ago.

VanEck said elevated oil and commodity prices have historically been a leading indicator of higher inflation.

Additionally, the US economic growth outlook is still resilient. 

Despite a number of growing pains including mounting fiscal debt, tariff disruption, a shrinking labour force following immigration policy pivot and an ongoing war with Iran, the US economy still looks resilient with a stable growth outlook at ~2% real growth and a probability of recession of only 30%.

Finally, value companies offering compelling valuations. 

Despite strong performance for value, it is trading at levels close to its 10-year average. From a relative value perspective, valuations also hit a multi-year low relative to broader equities (proxied by MSCI World ex Australia Index), indicating ample headroom on the upside.

How to target value shares

For investors seeking exposure to value shares, one option is to use value-focused ASX ETFs. 

Two such options include: 

• VanEck MSCI International Value ETF (ASX: VLUE) – gives investors a diversified portfolio of 250 international developed market large and mid-cap companies, with high value scores
• Vaneck MSCI International Value (AUD Hedged) ETF (ASX: HVLU) – The currency-hedged version of the above fund

The post Why value investing is back: Expert appeared first on The Motley Fool Australia.

More reading

• This value ASX ETF has been smashing the ASX 200 over the past 5 years

Motley Fool contributor Aaron Bell 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.

I’d wager that most ASX investors who describe themselves as ‘growth investors’ wouldn’t do much index fund investing.

After all, the whole point of growth investing is finding those high-flying shares that have the potential to outperform the broader market over time. It’s pretty hard to perform in the market when you are investing in the market itself.

As such, your typical growth investor tends to bet big on individual stocks, leaving index investing to others.

That might have worked for certain periods of the past. But I think it is getting more and more difficult to pull off going forward. So should ASX growth investors rethink index investing in 2026? I think so.

Watering flowers, removing weeds

The world is changing at a rate rarely seen before. It was only a few years ago when artificial intelligence (AI) still seemed a pipedream. Today, we are acutely aware of this technology’s disruptive potential. Whilst this has the potential to bring many benefits, investors have also been concerned that AI may make the software products and services of many companies redundant. The innovation required for growth stocks to stay at the cutting edge of technology has arguably never been higher.

If an investor has the expertise to navigate these changes, and continue to attempt to pick winners, then they should keep at it. But I have decided that the rate of change and disruption that is now taking place has raised the bar beyond my comfort level. That’s why I think growth investors may want to consider changing tack into index investing.

The beauty of index investing is that the index’s automatic rebalancing mechanisms add to winners and weed out losers over time. Sure, you might not get that 100-bagger that becomes half of your portfolio thanks to your big, early bet. But you are guaranteed that the most successful companies on an index will swell to become your largest investments over time, without the risk of a complete wipeout of capital.

When most people think of index investing, they assume we mean buying shares in broad-market indexes like the S&P/ASX 200 Index (ASX: XJO), or the US-based S&P 500.

To be fair, an index fund that tracks the ASX 200 Index is indeed quite unsuitable for growth investors. That’s given our market’s heavy weighting towards decades-old bank and mining stocks.

The best index funds for growth investors

But investors can always opt for a growth-tilted index, such as the S&P/ASX All Technology Index (ASX: XTX). The BetaShares S&P/ASX Australian Technology ETF (ASX: ATEC) tracks this index, which only holds the largest technology stocks on the ASX. Some of its current holdings include Xero Ltd (ASX: XRO), NextDC Ltd (ASX: NXT) and WiseTech Global Ltd (ASX: WTC).

An S&P 500 index fund like the iShares S&P 500 ETF (ASX: IVV) is a different kettle of fish. The S&P 500 is dominated by some of the most dominant and innovative growth stocks the world has ever seen. Among IVV’s top holdings, one will find NVIDIA, Alphabet, Amazon, Microsoft, Tesla and Apple. All stocks that have found themselves in many successful growth investors’ portfolios in the past.

If that’s not ‘growthy’ enough, the BetaShares Nasdaq 100 ETF (ASX: NDQ) is a more intense choice. This index fund only holds stocks that are listed on the NASDAQ exchange. These tend to be newer, more dynamic companies. NDQ holds the US stocks listed above, but also prominently features names like Adobe, Intel, AMD, Netflix, and Palantir Technologies.

In this era of intense disruptive forces on our technology markets, I think some ASX growth investors should consider leaving picking the winners to the index funds.

The post Here’s why I think ASX growth investors should embrace index investing in 2026 appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has positions in Alphabet, Amazon, Apple, Microsoft, and Netflix. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Adobe, Alphabet, Amazon, Apple, BetaShares Nasdaq 100 ETF, Intel, Microsoft, Netflix, Nvidia, Palantir Technologies, Tesla, WiseTech Global, Xero, and iShares S&P 500 ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2028 $330 calls on Adobe and short January 2028 $340 calls on Adobe. The Motley Fool Australia has positions in and has recommended BetaShares Nasdaq 100 ETF, WiseTech Global, and Xero. The Motley Fool Australia has recommended Adobe, Alphabet, Amazon, Apple, Microsoft, Netflix, Nvidia, 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.