Tag: Stock pick

The S&P/ASX 200 Index (ASX: XJO) is heading lower on Tuesday, with the market dropping back below 9,000 points.

At the time of writing, the benchmark index is down 0.68% to 8,949 points.

That puts the ASX 200 at its lowest level in 3 sessions and wipes out Monday’s small gain, when the index closed at 9,010 points.

The selling is also fairly widespread. Around 115 ASX 200 shares are falling, compared with 70 trading higher and 15 unchanged.

So, what is weighing on the market today?

Oil is back near US$100

Oil prices are getting plenty of attention after another skirmish in the Middle East conflict.

Brent crude settled at US$97.31 a barrel on Monday after reaching US$98.06, its highest level since late July. It is trading around US$96.80 this morning.

The move followed another escalation between the US and Iran, including attacks involving oil tankers and warships around the Strait of Hormuz.

That’s keeping concerns around energy prices, inflation and interest rates in focus.

There was also little direction from Wall Street overnight, with the US stock market closed for the Labor Day public holiday.

Heavyweights are pulling the index lower

Several of the ASX 200’s largest companies are trading lower this morning.

Commonwealth Bank of Australia (ASX: CBA) shares are down 0.64% to $160.51, while ANZ Group Holdings Ltd (ASX: ANZ) shares have fallen 0.61% to $37.70.

CSL Ltd (ASX: CSL) shares are down 0.81% to $171.79, and Wesfarmers Ltd (ASX: WES) has slipped 0.40% to $76.99.

REA Group Ltd (ASX: REA) is also among the weaker large-cap shares, falling 1.22% to $161.17.

Resources are holding up better

The resources sector is providing some support, helped by higher commodity prices.

BHP Group Ltd (ASX: BHP) shares are almost flat at $62.94, while copper prices have climbed to record levels in London trading.

Gold miners are also doing better. Northern Star Resources Ltd (ASX: NST) shares are up 0.77% to $23.47, while Evolution Mining Ltd (ASX: EVN) shares are 0.27% higher at $14.94.

Santos Ltd (ASX: STO) shares are up 0.36% to $8.38 as energy stocks benefit from higher oil prices.

Foolish takeaway

What I find more interesting is how quickly the ASX 200 has lost momentum over the past month.

The index was trading above 9,250 points in mid-August, but has now fallen by more than 3% from those levels.

Yes, that’s still only a modest pullback. But with oil prices rising and interest rate concerns hanging around, investors may need to get used to a bit more volatility.

The post The ASX 200 has dropped to a 3-day low. Here’s what’s happening appeared first on The Motley Fool Australia.

More reading

• Why this news from China has changed the outlook for BHP shares
• UBS names its 10 top ASX picks for the next 3-6 months
• Are CSL shares still cheap after almost doubling since June?
• Top 3 ASX shares to buy with $3,000 in September
• Which ASX shares win when the Aussie dollar is strong?

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

Bubs Australia Ltd (ASX: BUB) shares soared on Monday this week when the company announced it had secured approval to supply the US market with its infant formula products.

Bell Potter has since upgraded its price target on the company, and the analyst team believes there’s about 46% more upside in the shares as a result of the announcement.

I’ll get to their exact share price target on the stock shortly.

First let’s look in some more detail at what the company announced this week.

Key US approval is in the bag

Bubs said in a statement to the ASX that it had secured permanent US Food and Drug Administration (FDA) approval for its Bubs Goat, Bubs 365 Day Grass Fed and Bubs Essential infant formula products.

The company said the authorisation confirms that Bubs products, manufacturing systems and scientific evidence satisfy US regulatory requirements for safety, nutritional adequacy and quality.

The company added:

The United States infant formula market is one of the most highly regulated consumer categories globally, with substantial scientific, regulatory and manufacturing requirements for entry. Permanent FDA authorisation strengthens Bubs’ competitive position as the only Australian infant formula brand and one of a limited number of international manufacturers able to participate in this market. The approval provides a foundation for continued growth across Bubs’ branded portfolio while creating strategic optionality for future product innovation and market expansion.

Bubs Managing Director Joe Coote said it was a “transformational milestone” for the company.

He added:

This approval provides the platform to accelerate our US growth strategy, deepen retailer partnerships, strengthen consumer awareness of the Bubs brand and expand consumer reach across a market where we are already represented in more than 10,000 stores nationwide. Importantly, it also creates additional opportunities to broaden our product offering and evaluate participation in the US private label infant nutrition segment. While any private label expansion remains subject to further regulatory, technical and commercial milestones, the FDA authorisation represents a significant strategic asset that we consider enhances Bubs’ long-term growth potential.

Bubs Australia shares looking cheap

Bell Potter said in a research note to clients that the authorisation was a “material derisking event” for Bubs.

The broker added:

It has been overhanging the stock for some time and is now resolved. Our forecasts already assume ongoing US market access, but having gained USFDA approval, there may be a pathway to accelerate distribution point expansion beyond current projections.

Bell Potter has increased its price target on Bubs Australia shares from 13.5 cents to 19 cents, comparted to the current price of 13 cents.

Bubs is valued at $89.4 million.

The post How high could Bubs Australia shares go, according to Bell Potter? appeared first on The Motley Fool Australia.

More reading

• Bubs shares just rocketed 40%. Here’s the news investors were waiting for
• This ASX share jumped 7% before a trading halt. What’s going on?
• How high do brokers think Bubs Australia shares will go?

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.

BHP Group Ltd (ASX: BHP) shares rose again on Monday on a report out of China.

The country’s largest steelmaker is considering buying into one of the BHP’s biggest iron ore mines.

What does this mean for BHP?

Well, this piece of news points to a change in how Australia’s biggest miner and its biggest customer deal with each other.

What China’s Baowu is proposing

China Baowu Steel Group is reportedly weighing a minority stake in BHP’s Jimblebar operation in the Pilbara.

The range under discussion is 15% to 25%.

The stake would come out of BHP’s own 85% holding, with Itochu and Mitsui owning the remaining 15%.

Jimblebar is not a peripheral asset.

The operation produced roughly 62.5 million tonnes in FY26, close to a quarter of BHP’s total iron ore output.

BHP responded to the reports without confirming anything.

BHP notes the recent media speculation regarding a potential partnership involving part of the Western Australia Iron Ore (WAIO) business. BHP has a long history of partnerships at its assets and regularly explores options that may create long-term value to its shareholders.

Why this matters more than the price move for BHP shares

Context is everything here.

Until April, China Mineral Resources Group was restricting purchases of BHP’s US dollar-denominated cargoes.

That pricing dispute ran for roughly seven months.

CMRG negotiates contracts covering more than half of China’s iron ore imports.

It was resolved shortly after Brandon Craig met leaders of both CMRG and Baowu in Beijing.

Craig became BHP’s chief executive on 1 July.

A customer that owns part of the mine has a very different set of incentives in the next pricing negotiation.

That is the real significance for BHP shares.

The precedent at Rio Tinto

This would not be the first time Baowu has bought into the Pilbara.

Rio Tinto Ltd (ASX: RIO) opened the Western Range mine with Baowu in June 2025.

The US$2 billion joint venture is owned 54/46 and can produce up to 25 million tonnes a year.

The model already exists and it already works.

The contrast between the two miners is important to highlight.

BHP settled with CMRG in April.

Rio Tinto has not, and in August CMRG reportedly instructed some Chinese mills to halt negotiations with the company over shipments from September.

Rio Tinto delivered a strong first half regardless, with underlying EBITDA up 28% to US$14.8 billion and the interim dividend up 43%.

What it means for BHP shares from here

The underlying business is in good shape.

FY26 revenue rose 15% to US$58.8 billion, underlying EBITDA rose 27% to US$32.9 billion, and underlying attributable profit rose 30% to US$13.2 billion.

Net debt fell to US$8.7 billion and the full-year dividend was 172 US cents fully franked.

Iron ore production reached 265 million tonnes at a unit cost of US$19.66 a tonne.

That is the lowest among the majors for a seventh straight year.

The obstacles are somewhat political.

The Federal Opposition has already objected to a Chinese stake in a major Western Australian iron ore mine, and foreign investment approvals in resources have tightened considerably.

No decision has been made and there is no certainty any transaction follows.

Foolish takeaway

BHP shares are up roughly 50% over twelve months and about 10% below the record high set on 26 August.

The broker consensus target of around $59 sits below the current price.

A lot of optimism is already priced in.

I would not buy on the Baowu headline alone, because it is speculation and it faces a potential political challenge.

What it does signal is that BHP has repaired the most important commercial relationship it has.

The post Why this news from China has changed the outlook for BHP shares appeared first on The Motley Fool Australia.

More reading

• Why I’d wait to buy BHP shares in superannuation
• How much do I need in my superannuation to earn $10,000 passive income every month?
• Why is everyone talking about China and BHP shares today?
• These ASX shares benefit from a high Aussie dollar
• This ASX 200 giant is up 37% in 2026. Is the pullback worth buying?

Motley Fool contributor Mark Verhoeven 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.

Investors looking for ideas over the next few months have a new list to work through.

UBS has released its latest “Top Picks” list, naming 10 ASX shares its analysts see as the most compelling opportunities over the next 3 to 6 months.

The list is selected from a wider pool of 30 stocks and is updated each month.

So, which ASX shares made the cut this time?

Resources and industrials are in hot demand

UBS says the August reporting season reinforced what it describes as a “capex over consumer” cycle.

The broker sees stronger conditions in areas benefiting from spending on data centres, mining, energy and defence, while consumer-facing parts of the market look less attractive.

Several of the stocks on the list fit that view.

They include Genesis Minerals Ltd (ASX: GMD), which finished Monday at $8.17, Mineral Resources Ltd (ASX: MIN) at $63.06, Orica Ltd (ASX: ORI) at $22.95 and Ventia Services Group Ltd (ASX: VNT) at $5.73.

UBS is currently overweight both the mining and industrial sectors.

Megaport Ltd (ASX: MP1) also makes the cut. The data centre connectivity company closed Monday at $17.13 after a strong run this year, up 45%.

The full UBS top 10

The rest of the list is a pretty much a mixed bunch.

Auckland International Airport Ltd (ASX: AIA) finished Monday at $6.99, while AMP Ltd (ASX: AMP) closed at $2.48.

Healthcare heavyweight CSL Ltd (ASX: CSL) ended the session at $173.18, while gaming company Light & Wonder Inc (ASX: LNW) finished at $125.30.

Sigma Healthcare Ltd (ASX: SIG) rounds out the list after closing Monday at $2.69.

That gives UBS a mix of mining, infrastructure, technology, healthcare, financial and consumer-related exposure.

It’s also worth remembering these are short-term picks, not necessarily the stocks UBS likes best over the next 5 or 10 years.

The list can change quickly as share prices and earnings expectations move on the daily.

What is UBS avoiding?

Just as interesting is where UBS is more cautious.

The broker isn’t keen on banks, consumer discretionary shares and real estate, with higher RBA interest rates and weaker sentiment making life tougher across those parts of the market.

UBS thinks that could lead to more earnings-per-share (EPS) downgrades in the months ahead.

That leaves the broker leaning more heavily towards companies exposed to business investment and infrastructure spending.

Of course, these are only 3-to-6-month picks, and UBS refreshes the list every month.

I’d be interested to see which of these 10 are still there next time around.

The post UBS names its 10 top ASX picks for the next 3-6 months appeared first on The Motley Fool Australia.

More reading

• Are CSL shares still cheap after almost doubling since June?
• 5 things to watch on the ASX 200 on Tuesday
• CSL led the ASX healthcare shares rebound. Can it continue?
• These ASX shares benefit from a high Aussie dollar
• Buy, hold, sell: Megaport, Xero, AMP shares

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 positions in and has recommended CSL, Light & Wonder Inc, and Megaport. The Motley Fool Australia has recommended CSL and Light & Wonder Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

There are plenty of interesting investment opportunities available on the ASX share market right now.

The experts in charge of WAM Capital Ltd (ASX: WAM) have outlined some compelling opportunities in its portfolio that have pleasing outlooks.

WAM Capital is a listed investment company (LIC) – a company that invests in other shares to generate profits for shareholders. Which ASX shares? The LIC wants to find the “most compelling undervalued growth opportunities in the Australian market”.

Let’s dive into the two stocks that Wilson Asset Management highlighted as ideas in its August 2026 update.

EVT Ltd (ASX: EVT)

The first ASX share that WAM discussed was EVT, an Australian leisure and property company that operates cinemas, hotels and commercial properties. Its cinema chains are reportedly the largest in Australia and New Zealand.

The fund manager noted that the EVT share price rose in August following the release of its FY26 annual result. It shot up 18% during last month.

Wilson Asset Management highlighted that the ASX share’s reported net profit after tax (NPAT) rose 51.9% year-over-year to $50.7 million. The company’s board of directors declared a fully franked final dividend of 23 cents per share, representing a year-over-year rise of 4.5%.

WAM said that the FY26 result was ahead of the consensus of analysts’ expectations, driven by the cinema segment.

The fund manager also noted the business plans to divest approximately $800 million of non-core property assets, as well as an independent strategic review of the group structure.

WAM said the proposed asset divestments are expected to support hotel growth and potential special dividends, while the strategic review is a potential catalyst to unlock further shareholder value.

FDC Consolidated Holdings Ltd (ASX: FDC)

The other ASX share that Wilson Asset Management wanted to highlight was FDC, an integrated construction and building services company that delivers major construction, fit-out and refurbishment solutions across Australia.

The FDC share price also increased by 19% in August 2026. This positive performance was in response to the company’s first annual result as an ASX-listed company.

FDC reported that revenue grew by 13% year-over-year, which reflected the strength of its diversified business model and national footprint, according to WAM. There was double-digit growth across its construction, fit-out and refurbishment segments.

WAM then pointed out that FDC also reaffirmed its FY27 prospectus forecasts and highlighted a diversified project pipeline, which supported confidence in the ASX share’s future earnings growth.

The post Why a fund manager loves these ASX shares right now appeared first on The Motley Fool Australia.

More reading

• 40 ASX shares with ex-dividend dates next week
• Ouch: WAM Capital shares crash 15% as dividend cut in half
• WAM Capital trims FY27 dividend after portfolio setback in FY26
• Here are the top 10 ASX 200 shares today
• EVT Ltd posts profit jump and pivots focus to hotel growth in FY26 results

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

CSL Ltd (ASX: CSL) shares have been one of the more spectacular ASX recovery stories of the past few months.

After a difficult period for the healthcare giant, investors have returned quickly as confidence in its earnings outlook improved.

With the shares now trading around $173.18, I think the valuation deserves another look.

A very different price

Back in June, CSL shares could be bought for just $90.

At that level, I thought the stock looked dirt cheap for a global healthcare business with strong market positions across plasma therapies, vaccines, and specialist medicines.

The market clearly agreed eventually. At around $173.18 on Tuesday, CSL shares have almost doubled in roughly three months.

That is an extraordinary move for a company of this size, and it changes the valuation discussion quite considerably.

The easy answer is that CSL is no longer cheap in the way it was at $90.

But I do not think that automatically makes the shares expensive.

What does the valuation look like now?

According to consensus estimates, CSL is expected to generate earnings per share of $9.01 in FY27, rising to $9.51 in FY28 and $10.10 in FY29.

At the current share price, that puts CSL on a PE ratio of roughly 19 times forecast FY27 earnings.

While I would not call that cheap, I think it is still a reasonable price for a business with CSL’s global position and the prospect of returning to steady earnings growth.

The valuation also becomes a little more attractive if those earnings forecasts are delivered. Based on the FY29 estimate, the shares are trading at around 17 times earnings.

That gives investors some room for the earnings recovery to do more of the work from here.

Why I still see value

CSL still has several qualities I like as a long-term investment.

Its plasma collection network, scale in immunoglobulin therapies, and established global operations are difficult to replicate.

There is also potential for earnings to improve as the business works through the operational issues and restructuring that weighed on investor confidence previously.

I would not expect the next few years to be completely smooth.

CSL still needs to show that it can deliver the earnings recovery the market is now pricing in, and any disappointment could put pressure on the share price after such a strong rebound.

Even so, I think the current valuation leaves the stock in a reasonable position if earnings continue moving higher.

Foolish takeaway

CSL shares looked exceptionally cheap around $90 in June.

At $173.18, I do not think that description fits anymore.

The shares have almost doubled, and investors are now paying around 19 times forecast FY27 earnings.

For me, that moves CSL from dirt cheap to decent value.

I would still be comfortable buying at today’s price for the long term, but I think the opportunity now rests much more on future earnings growth than on an obviously depressed valuation.

The post Are CSL shares still cheap after almost doubling since June? appeared first on The Motley Fool Australia.

More reading

• UBS names its 10 top ASX picks for the next 3-6 months
• CSL led the ASX healthcare shares rebound. Can it continue?
• These ASX shares benefit from a high Aussie dollar
• CSL shares are up 94% from their low. What are brokers forecasting next?
• Looking to bank the upcoming CSL dividend? You better hurry!

Motley Fool contributor Grace Alvino has positions in CSL. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL. The Motley Fool Australia has recommended CSL. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Three thousand dollars is a good starting point for buying ASX shares.

The important element to focus on is diversification.

The three companies below are chosen to do different jobs.

One pays you now, one is geared to markets, and one is as close to defensive as our market gets.

1. Woodside Energy Group Ltd (ASX: WDS)

Woodside is the income anchor.

The shares trade near $32.33 on a price-to-earnings ratio of about 14.5 and a fully franked yield close to 5%.

That is the cheapest multiple and the highest yield of the three by a wide margin.

However, the company is still performing. The first half of calendar 2026 demonstrated this.

Operating revenue rose 13% to US$7.45 billion and net profit after tax reached US$1.67 billion.

Production came in at 86.5 million barrels of oil equivalent, and the interim dividend was 57 US cents fully franked at an 80% payout ratio.

Gearing is at 20.6%, marginally above the target range, which is the one number worth watching.

There are many things to like about this company.

2. Macquarie Group Ltd (ASX: MQG)

Macquarie Group is the geared exposure to markets.

FY26 net profit rose 30% to $4.85 billion, return on equity recovered to 14.0%, and earnings per share climbed 30% to $12.77.

The company’s full-year dividend was $7.00, though only 35% franked, which is important if you are buying this stock for income.

Importantly, assets under management reached $748 billion at 30 June, up 4% in a quarter.

Chief executive Shemara Wikramanayake described the year in characteristically measured terms:

Each of our businesses used its specialist expertise in navigating the current environment, identifying opportunities that support long-term growth and delivering positive outcomes for our clients and communities.

At current levels the shares trade on a price-to-earnings ratio near 19.7, which is not obviously cheap.

The future investment case depends on Commodities and Global Markets and Macquarie Capital both still running hot.

3. Wesfarmers Ltd (ASX: WES)

Wesfarmers is the awkward stock in this list.

Results were good: FY26 revenue rose 3.4% to $47.3 billion and net profit excluding significant items rose 8.3% to $2.87 billion.

Bunnings lifted earnings before tax 5.1% to $2.46 billion and Kmart Group added 6.0% to $1.11 billion.

The company’s full-year dividend rose 7.8% to $2.22 fully franked.

The problem however is the price.

At $77.30 the shares trade on a price-to-earnings ratio above 30 for a business growing revenue at 3.4%, and the broker consensus sits at a modest sell.

I still want it here, because a strong Australian dollar is lowering Kmart’s landed costs and the shares are already down more than 13% over twelve months.

Managing director Rob Scott pointed to the operating discipline behind the result:

Our businesses focused on mitigating cost pressures through productivity initiatives and were able to deliver more value, better service and increased convenience for our retail and business customers.

Why these ASX shares work together

They barely overlap.

Woodside is leveraged to LNG prices and a project starting up this quarter.

Macquarie rises and falls with market activity and deal flow.

Wesfarmers depends on Australian households and imported goods.

A poor year for one does not mean a poor year for the others.

Foolish takeaway

None of these three ASX shares are bargains, and only Woodside looks cheap.

What the current package gives you is a 5% franked yield, exposure to global markets, and a defensive retailer bought after a 13% fall.

Woodside is the one I would size largest, because the dividend is paid whether or not the share price cooperates.

Wesfarmers is the one that needs the most patience, given where the multiple sits.

Three thousand dollars invested this September will not change your life, and that has never been the point of buying ASX shares.

The post Top 3 ASX shares to buy with $3,000 in September appeared first on The Motley Fool Australia.

More reading

• Which ASX shares win when the Aussie dollar is strong?
• $10,000 a year in passive income buying just $10k worth of ASX shares? Here’s how I’d go about it
• These ASX shares benefit from a high Aussie dollar
• How Woodside shares are building a ‘unique position’ to supply global LNG markets
• What Warren Buffett’s investing style can teach superannuation investors

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

Which ASX shares benefit from a strong Australian dollar is an important question for investors betting on a stronger AUD.

The currency has done a lot of work over the past year.

It buys near 72 US cents, according to the Reserve Bank’s daily exchange rates.

Twelve months ago, it bought around 65.5 US cents.

That is a move of roughly 10%.

Why the currency matters for ASX shares

The mechanism is relatively straightforward.

Companies that import goods and sell them here pay less for their stock.

Companies that sell in United States dollars and report in Australian dollars bring home less.

The Reserve Bank’s commodity price index shows how large this effect has become.

Over the year to August, the index rose 15.5% measured in special drawing rights but only 5.8% measured in Australian dollars.

Roughly ten percentage points of a true commodity upswing has been eaten by the currency.

The Reserve Bank has raised the cash rate three times in 2026, to 4.35%, and held it there in August.

Its August statement made the connection explicit.

Despite depreciating since the May Statement, the Australian dollar remains higher than at the start of the year, consistent with the tightening in monetary policy in Australia compared with other economies.

Wesfarmers: The importer’s advantage

Wesfarmers Ltd (ASX: WES) is one of the clearest domestic beneficiaries.

Kmart and Bunnings both source heavily from Asia in United States dollars.

A stronger Australian dollar lowers the landed cost of everything on the shelf.

FY26 revenue rose 3.4% to $47.3 billion, with net profit after tax was up 8.3% excluding significant items to $2.87 billion.

Bunnings earned $2.46 billion before tax on revenue of $20.4 billion, while Kmart Group lifted earnings 6.0% to $1.11 billion.

The important nuance came from Kmart Group managing director Aleksandra Spaseska on the results call.

From a fuel and an ocean freight perspective, it is an inflationary environment. The strengthening of the Australian dollar plays a mitigating impact to all of that.

She also explained why the benefit arrives more slowly than investors would have liked.

The business hedges twelve to eighteen months ahead, so spot rate moves do not flow through immediately.

For investors, that means most of the currency benefit from this year’s move is still ahead of Wesfarmers.

ResMed: The other side of the trade

ResMed Inc (ASX: RMD) shows the opposite.

The business itself is performing well.

FY26 revenue rose 10% to US$5.65 billion, with non-GAAP earnings per share up 17% to US$11.17.

The problem for Australian holders is translation.

ResMed lists here through CDIs and declares its dividend in United States dollars, converted at the record date.

The most recent quarterly payment of US$0.66 per underlying share converted to just 9.28 Australian cents per CDI at an exchange rate of 0.7112.

The same American dividend buys fewer Australian cents when the currency is high.

The same arithmetic applies to the share price itself.

Despite this, chief executive Mick Farrell was upbeat about the underlying business.

We closed fiscal year 2026 with strong fourth quarter results, reflecting continued momentum of our global business, sustained demand for our market-leading products, and disciplined execution of our strategy.

Foolish takeaway

Currency may be a tailwind or a headwind.

However, I would not buy Wesfarmers purely because the Aussie dollar is high.

The shares sit on a price-to-earnings ratio above 30, and most brokers are cool on them.

Nor would I sell ResMed over an exchange rate, since its weakness this year owes more to a product safety action than to the currency.

What the strong dollar does is change the order in which good businesses compound.

The post Which ASX shares win when the Aussie dollar is strong? appeared first on The Motley Fool Australia.

More reading

• Top 3 ASX shares to buy with $3,000 in September
• CSL led the ASX healthcare shares rebound. Can it continue?
• 4 high conviction ASX stock picks from Canaccord Genuity
• These ASX shares benefit from a high Aussie dollar
• What Warren Buffett’s investing style can teach superannuation investors

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

Santos Ltd (ASX: STO) shares could be one to watch on Tuesday after the company dropped a new update after yesterday’s market close.

The Santos share price finished the session at $8.35, up 1.7%, and has now climbed around 35% since the start of 2026.

With the stock already trading close to its 52-week high, investors will be watching closely to see how the market reacts to the company’s latest move in Papua New Guinea.

Here’s what we know.

Santos is increasing its exposure

Santos has agreed to spend around US$189 million, or roughly $262 million, to buy another 3.3% of the Papua LNG project from TotalEnergies.

Once the Papua New Guinea Government’s planned back-in is taken into account, Santos expects its stake to increase from 17.7% to 21%.

The deal is still subject to regulatory approvals and the project reaching a final investment decision, which is currently targeted for the fourth quarter of 2026.

If everything goes ahead, Santos expects its share of LNG production from Papua LNG to rise by around 19% to about 1.2 million tonnes a year.

There’s also a change at the top of the project, with ExxonMobil set to take over as operator from TotalEnergies and increase its own interest to 34.1%.

Santos believes having ExxonMobil operate both Papua LNG and the existing PNG LNG project could improve efficiency and help with execution.

CEO Kevin Gallagher said the deal gives Santos a larger position in a project the company sees as part of its next stage of growth, alongside Barossa and Pikka.

Gas policy is back in focus

The Papua LNG deal is not the only thing Santos investors have to watch this week.

The Australian reported today that Australia Pacific LNG wants exporters blocked from buying domestic gas to meet export commitments under the Federal Government’s proposed reservation scheme.

APLNG chief executive Dan Clark also warned that the proposed 20% reservation target could discourage investment in new supply.

Santos has raised similar concerns, arguing that pushing too much gas into the domestic market could lower prices in the short term but make future projects less attractive.

But the debate could get more attention tomorrow, when Santos CEO Kevin Gallagher speaks at the National Press Club.

Is there much upside left?

After a 35% rise this year, Santos shares are already trading close to their 52-week high.

TipRanks shows an average 12-month price target of $8.44, only slightly above Monday’s close. Six of the eight analysts shown still rate the stock as a buy, with the other two on hold.

That still leaves brokers broadly positive on Santos, although the average target is only a touch above the current share price.

The post Santos shares on watch after major Papua LNG deal appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Tuesday
• 5 things to watch on the ASX 200 on Monday
• 5 things to watch on the ASX 200 on Friday
• 11 ASX 200 shares with reaffirmed buy ratings post-results
• Buying Santos shares? Here’s why the company is celebrating this production milestone

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.

If I were a retiree, there would be only a few ASX shares I’d be willing to rely heavily on for returns, including dividends. One of the top stocks I’d consider for the long-term is L1 Long Short Fund Ltd (ASX: LSF).

This business is one of the larger listed investment companies (LICs) available to Australians. The job of a LIC is to invest in shares and other assets on behalf of shareholders. It’s operated by the fund managers and analysts at L1 Group Ltd (ASX: L1G).

When I think about what retirees may be searching for, or may benefit from, I think the ASX share can tick all of the boxes.

Compelling passive dividend income

The feature retirees may be after most is passive income. Dividends from ASX shares are a great option, in my view.

For me, it’s not just a question of how large the dividend yield is. I’d also want to see dividend reliability and payout growth as well.

L1 Long Short Fund has certainly ticked the box for income. It has increased its annual dividend per share every year since 2021, when it first started paying a dividend. The LIC changed to quarterly dividends in 2025, and it has grown its quarterly dividend every quarter since then.

The business has a stated goal of increasing its dividend for shareholders, which it’s clearly doing.

If the business continues to increase its dividend payout each quarter over the next 12 months, it would have a FY27 grossed-up dividend yield of 4.7%, including franking credits, at the time of writing. I think that would be a great starting dividend yield for retiree investors.

Pleasing diversification

Another aspect that retiree investors may really benefit from is the diversification that the LIC can provide.

It invests in both ASX shares and international shares, using long-term investing and short-selling strategies. Short selling is when you can generate profit if a share price goes down, so it’s a good way to protect against falling markets.

Given its investments across Australia, New Zealand, North America, Europe and Asia, it can provide diversification for retiree portfolios that may be too focused on Australian assets (including property).

The LIC also tends to avoid investing in the tech sector or ASX bank shares, so it can generate returns in ways that differ from those of typical exchange-traded funds (ETFs) that focus on US or ASX shares. Its three most fruitful sector hunting grounds have been materials, industrials and communication services.

Strong portfolio returns is delivering capital growth

The portfolio strategy has been very effective, generating strong net returns. In the past five years, the LIC’s net return has been an average of 16.1% per year. Only some of this was used to pay dividends, with the rest of the investment returns retained within the business.

The increasing portfolio value has driven a rise in the share price. Over the past five years, the L1 Long Short Fund share price has risen 78% (at the time of writing).

Of course, past performance is not a guarantee of future returns, but I’m optimistic it can continue to deliver pleasing long-term returns.

The post Why this top ASX share is a retiree’s dream for FY27 appeared first on The Motley Fool Australia.

More reading

• Why these 3 top ASX dividend shares are my biggest holdings
• How much do I need to retire on $120,000 a year at 55?
• I’d buy 164,557 shares of this ASX stock to aim for $500 a week of passive income
• How much is needed in superannuation to target a $5,500 monthly passive income?
• How much is needed in superannuation to target a $40,000 annual passive income?

Motley Fool contributor Tristan Harrison has positions in L1 Group and L1 Long Short Fund. 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.