Tag: Stock pick

I think some of the best ASX shares to buy are those that can deliver excellent long-term returns through powerful compounding.

When earnings grow at a strong compound annual growth rate (CAGR), it means the underlying intrinsic value is improving rapidly and does so for a long time.

I believe the following two names are excellent ideas for the decade ahead.

Lovisa Holdings Ltd (ASX: LOV)

Lovisa is a global retailer of affordable jeweller around the world.

It has at least five stores in Australia, New Zealand, Singapore, Malaysia, Hong Kong, South Africa, the UK, Ireland, Spain, France, Germany, Belgium, the Netherlands, Austria, Switzerland, Poland, Italy, the UAE, the USA, Canada, Mexico, its Middle East and Africa franchise and its South America franchise.

The ASX share’s expanding global store network is a key driver of the company’s financial progress. In FY26 alone, its store count increased by 10.2% (or 105 stores) year-over-year to 1,136.

Revenue growth at its store network helped revenue grow by 17.6% to $938.8 million, underlying operating profit (EBITDA) rose 20.9% and net profit after tax (NPAT) increased 10.7% (despite all of the investing in new stores globally).

With so many markets it can grow in, including new markets like China, Vietnam, Taiwan, I think the business has a very promising future of expansion in the decade ahead. Operating leverage could help improve its profit margins over time.

According to the forecast on CMC Invest, the Lovisa share price is valued at 19x FY28’s estimated earnings.

Siteminder Ltd (ASX: SDR)

Siteminder is one of the world’s leading hotel commerce and management software providers. The business generates 140 million hotel reservations worth over A$85 billion in revenue for its hotel customers.

In an increasingly digital world, the ASX share is seeing strong adoption around the world.

In FY26, Siteminder reported that revenue grew 18.6% to $266.1 million and annual recurring revenue (ARR) improved 14.9% to $313.7 million, despite softer global travel conditions.

It’s benefiting from growing traction in new product initiatives, such as its smart platform modules that help customers analyse financial performance, decide on room prices, and even automatically adjust them so customers can generate the most revenue over the year.

In terms of profitability, the nature of software means revenue can rise much faster than expenses.

While the ASX share’s revenue grew 18.6% in FY26, underlying operating profit (EBITDA) jumped 96.5% to $28.1 million, and adjusted free cash flow surged 123% to $10.5 million. I expect its profit margins will continue to improve in the years ahead, although they are unlikely to do so at the same pace as in FY26.

According to the projection on CMC Invest, the Siteminder share price is valued at under 30x FY28’s estimated earnings.

The post 2 top ASX shares to buy and hold for the next decade appeared first on The Motley Fool Australia.

More reading

• Why I’d invest $10,000 into these ASX growth shares
• How much is needed in superannuation to target a $60,000 annual passive income?
• 5 ASX shares downgraded by Morgans post-results
• 2 ASX shares tipped to grow 60% or more in the next 12 months
• 3 ASX 200 stocks, including Paladin Energy, storming higher on earnings results this week

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

Owning Qantas Airways Ltd (ASX: QAN) shares has been a solid choice for passive income in recent times, following the COVID-19 pandemic. Investors may be wondering what the upcoming dividends could be for shareholders.

It has been a volatile decade for the airline so far, with the Middle East events causing a big increase in fuel prices for the airline.

As we saw in the FY26 result, the company reported that was a Middle East net impact of $420 million, leading to an underlying profit before tax falling $330 million to $2.06 billion and statutory net profit after tax dropped $316 million.

This allowed the business to pay a FY26 final dividend of $300 million (19.8 cents per share), which combined with its $300 million interim dividend.

Let’s take a look at what analysts think could happen with the dividends in the coming years.

FY27

We are already a few months into the 2027 financial year, and we still don’t know how the situation in the Middle East will play out or how long it could take. Travel demand and fuel prices could be significantly impacted, so we’ll have to see what happens next.

When Qantas announced its FY27 result, the airline gave some outlook commentary, which gave some insight into what could happen during this new financial year.

The airline said that travel demand remains resilient as customers continue to prioritise travel. International demand across Qantas and Jetstar remains “strong”, supported by customers redirecting travel away from the Middle East, while domestic demand is tracking “broadly in line with the fourth quarter of FY26.”

Qantas said that domestic and international total unit revenue (TRASK) is expected to rise between 8% to 10% in the first half of FY27 compared to the first half of FY26.

With the above in mind, the projection on Commsec suggests the business could deliver higher earnings but maintain its annual dividend per Qantas share at 39.6 cents. That would be a dividend yield of 4.25% and a grossed-up dividend yield of 6%, including franking credits.

FY28

In the next financial year, being FY28, analysts predict that the earnings and dividend could grow further.

According to the projection on Commsec, the ASX share could hike its annual dividend per Qantas share of 43.1 cents in FY28. That would be a grossed-up dividend yield of 6.6%, including franking credits, at the time of writing.

FY29

The 2029 financial year could be the best of all for this series of projections.

According to the estimate on Commsec, the business could pay an annual dividend per Qantas share of 49.6 cents. That would translate into a grossed-up dividend yield of 7.6%, including franking credits.

Overall, it seems like the airline could produce solid dividend returns in the coming years.

The post Here’s the dividend forecast out to 2029 for Qantas shares appeared first on The Motley Fool Australia.

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• Buying Qantas shares? Here’s what happened with the ASX 200 airline in August
• How many Qantas shares do I need to buy for $10,000 per year of passive income?

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.

There is a group of ASX dividend shares that I believe will make great long-term investments for both capital growth and passive income over the long-term.

I’m so optimistic about certain names that I’ve invested in them for my own portfolio, and I’m planning to buy more in the coming months and years.

In my view, the names below are two of the most compelling passive income stocks right now.

L1 Global Long Short Fund Ltd (ASX: GLS)

This business is a listed investment company (LIC) and it’s a recent addition to my portfolio. It’s similar to the L1 Long Short Fund Ltd (ASX: LSF), except it only invests in global shares, rather than a mixture of ASX shares and global shares.

The globally-focused business focuses on company-specific opportunities where valuation and earnings delivery can drive returns across a “range of potential macro environments”.

In its monthly update for July 2026, it noted that its median ‘long’ position is trading on a price/earnings (P/E) ratio of 10, supported by double-digit earnings per share (EPS) growth and modest debt levels.

As its name suggests, the LIC can also short businesses, which essentially means it can bet on certain names in the portfolio going down in value. Therefore, it can make investment returns whether the market goes up or down.

The ASX dividend share can give Australian investors exposure to a diversified portfolio, with investments (and short positions) across North America, Europe and the Asia Pacific regions.

L1 Group Ltd (ASX: L1G) only started managing this LIC in November 2025, but its portfolio’s net return has been 17.9% since then, outperforming the global share market by 6.6% in that time.

The global LIC has provided dividend guidance of at least 8 cents per share in FY27, with quarterly dividends of 2 cents per share. It has also stated an intention to pay sustainable and growing dividends over time.

Its guidance implies a guided grossed-up dividend yield of at least 5.4%, including franking credits, at the time of writing.

Rural Funds Group (ASX: RFF)

Rural Funds is the other ASX dividend share I want to talk about. It’s a real estate investment trust (REIT) that provides exposure to a portfolio of agricultural properties.

The business offers a diversified portfolio across cattle, almonds, macadamias, vineyards and cropping.

The FY26 result highlighted the strength of the REIT’s ability to deliver good passive income despite challenging conditions in relation to higher interest rates.

Rural Funds reported that FY26 net property increase grew 5.7% thanks to additional rental income on capital expenditure (primarily macadamia orchards) and indexation. Its rental contracts have income growth from fixed annual increases and inflation-linked increases.

It also reported that adjusted funds from operations (AFFO) – the net rental profit – rose by 1.7%, despite interest costs increasing significantly.

The business has announced a few asset sales, at a premium to the stated book value, which will decrease interest costs and put the balance sheet in a healthier position. It had adjusted net asset value (NAV) of $3.22 as of June 2026 (which was a 4.5% rise year over year) – that means, it’s trading at a 40% discount to the stated value.

It expects to pay a distribution per unit of 11.73 cents in FY27, which is a distribution yield of 6%.

The post 2 great ASX dividend share buys for passive income in September appeared first on The Motley Fool Australia.

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• 3 top ASX dividend shares to buy in September
• How much is needed in superannuation to target a $60,000 annual passive income?
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• How much do I need to retire on $120,000 a year at 55?
• Why Bell Potter rates these ASX dividend shares with 5% to 8% yields as buys

Motley Fool contributor Tristan Harrison has positions in L1 Global Long Short Fund Ltd, L1 Group, L1 Long Short Fund, and Rural Funds Group. 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 positions in and has recommended Rural Funds Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

While having recovered from their February one-year lows, Pro Medicus Ltd (ASX: PME) shares remain sharply lower over the past year.

On Monday afternoon, shares in the S&P/ASX 200 Index (ASX: XJO) health imaging company were trading for $170.11apiece. That sees the share price down a sharp 43.2% over 12 months, well behind the 1.9% gains posted by the benchmark index over this same period.

A lot of the pressure on Pro Medicus shares has come amid wider concerns that AI can potentially replace the services that many global Software as a Service (SaaS) companies provide.

You may have heard this called the ‘SaaSpocalypse’.

But following the big selldown, Medallion Financial Group’s Stuart Bromley believes Pro Medicus is now trading at “an attractive entry point” (courtesy of The Bull).

Here’s why.

Should I buy Pro Medicus shares today?

“Pro Medicus is a global leader in medical imaging software, with its Visage platform increasingly adopted by major US hospital networks,” Bromley said, citing the first reason he’s bullish on the ASX 200 healthcare stock.

As for the second reason you might want to buy Pro Medicus shares today, he said:

Revenue of $261.7 million in full year 2026 rose 22.9 per cent on the prior corresponding period. Underlying net profit after tax of $144.7 million was up 24.1 per cent. Revenue and underlying net profit exceeded expectations, while the underlying earnings before interest and tax margin reached an exceptional 74.9 per cent.

Then there’s the company’s solid revenue pipeline.

“It signed 10 new contacts worth $407 million in full year 2026. It renewed six contracts on five-year terms to the value of $141 million,” Bromley noted.

As for the fourth reason this ASX share is buy today, Bromley concluded, “Recent share price weakness provides an attractive entry point into a high-quality growth business.”

What’s the latest from the ASX 200 healthcare share?

Pro Medicus reported its FY 2026 results on 18 August.

Atop the strong financial results Bromley mentioned above, the company declared an all-time high final dividend of 37 cents per share, fully franked. It’s a bit too late to grab that record passive income payout, though. The stock traded ex-dividend yesterday.

Commenting on the company’s strong results on the day, Pro Medicus CEO Sam Hupert said:

We were aiming for 30% increases in EBIT and NPAT, and we exceeded both on a constant currency basis… Progress made in the cardiology market represents another important string to our bow. We see this trend continuing.

Pro Medicus shares closed up 11.9% on the day of the results release.

The post Down 43%! 4 reasons to buy the BIG dip in Pro Medicus shares today appeared first on The Motley Fool Australia.

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• Top 3 ASX healthcare shares to buy after a brutal year

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

Building passive income from ASX stocks does not always mean owning banks and miners.

There are plenty of other companies out there that can provide attractive dividends while giving investors exposure to different parts of the economy.

With that in mind, here are three ASX passive income stocks that could be worth considering if you have $50,000 to invest.

Accent Group Ltd (ASX: AX1)

Accent Group could be an interesting option for investors looking for a combination of income and growth.

It is one of Australia’s largest footwear and apparel retailers, with stores including The Athlete’s Foot, HypeDC, Platypus, Stylerunner, and Skechers.

Retail can be cyclical, but Accent has built a strong position by focusing on categories where consumers are often prepared to spend for brands they know and like.

It also has a large store network, growing online operations, and exposure to some of the world’s biggest footwear brands.

If consumer spending improves in the near term and Accent’s earnings rebound, there could be scope for dividends to increase meaningfully.

HomeCo Daily Needs REIT (ASX: HDN)

Another ASX passive income stock to look at is the HomeCo Daily Needs REIT. It could suit investors looking for a more defensive source of income.

HomeCo Daily Needs is a property company that owns neighbourhood retail, large-format retail, healthcare, and other assets linked to everyday spending.

Its tenants include supermarkets, pharmacies, childcare operators, healthcare providers, and other businesses that people continue using through different economic conditions. This can provide relatively dependable rental income.

I also like that the portfolio is focused on practical properties rather than relying heavily on offices or discretionary shopping centres.

Overall, this could make HomeCo Daily Needs REIT a solid option for investors wanting regular income from property.

Transurban Group (ASX: TCL)

Transurban is another ASX stock that could be well suited to passive income.

It owns and operates toll roads across Australia and North America, including important roads in Sydney, Melbourne, and Brisbane.

These are difficult assets to replicate. As cities grow and congestion increases, motorists can place significant value on roads that help them get around more quickly.

Transurban also benefits from toll increases built into many of its road concessions, which can help revenue grow over time and supports an attractive income profile for investors.

Another positive is the company has a long pipeline of infrastructure projects, which could allow cash flows and dividends to increase over the years.

For investors seeking passive income backed by large-scale infrastructure assets, Transurban could be worth a look.

The post 3 ASX passive income stocks to buy with $50,000 appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Accent 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 Transurban Group. The Motley Fool Australia has recommended Accent Group and HomeCo Daily Needs REIT. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The ASX bank share sector is a very important segment of the S&P/ASX 200 Index (ASX: XJO).

There are a number of important businesses such as Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd (ASX: NAB), ANZ Group Holdings Ltd (ASX: ANZ), Macquarie Group Ltd (ASX: MQG) and Bendigo and Adelaide Bank Ltd (ASX: BEN).

How the big banks perform plays an essential role in the Australian economy and the ASX share market. A key question to me is – are they good value?

Fund manager Wilson Asset Management (WAM) has shared thoughts on major ASX bank shares in the context of the WAM Leaders Ltd (ASX: WLE) portfolio. WAM Leaders is a listed investment company (LIC) that looks to actively invest in large ASX shares at attractive valuations.

In its latest commentary about ASX shares, the WAM Leaders investment team talked about their view on the major ASX bank shares of CBA, Westpac, NAB and ANZ.

Do the big four ASX bank shares have a good outlook?

Following the end of reporting season, where CBA announced its FY26 result and the other big banks revealed quarterly updates, Wilson Asset Management said that the banks’ reports were broadly in line with expectations.

However, bank commentary pointed to a moderation in the outlook for credit growth as the housing market digests the impact of three rate hikes earlier in the year and recent federal budget changes.

The WAM Leaders investment team noted that revenue growth is also showing signs of slowing from the strong levels seen earlier in the cycle.

The LIC’s fund managers highlighted that business lending pipelines remain “relatively healthy”, but mortgage growth expectations have been revised to lower levels.

Are the valuations of ANZ, NAB, Westpac and CBA shares attractive?

The Wilson Asset Management team said that they remain underweight. This means having a smaller allocation to banks than the ASX 200 does, due to the more challenging outlook for credit growth, alongside increasing competition and signs of some deterioration the ASX bank shares’ asset (loan book) quality.

In terms of valuation, according to Commsec, the CBA share price is valued at 24x FY27’s estimated earnings. It trades with a higher price/earnings (P/E) ratio than many other Australian (and global) banks, though some of that premium could be justified by its impressive quality.

Turning to the other banks, based on the Commsec profit projection, the Westpac share price is valued at 16x FY27’s estimated earnings, the NAB share price is valued at 15x FY27’s estimated earnings and the ANZ share price is valued at 15x FY27’s estimated earnings.

Based on what the WAM investors said, there are better value opportunities out there than the major ASX bank shares.

The post Are NAB, ANZ, Westpac and CBA shares attractive buys right now? appeared first on The Motley Fool Australia.

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• $10,000 a year in passive income buying just $10k worth of ASX shares? Here’s how I’d go about it
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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 positions in and has recommended Macquarie Group. The Motley Fool Australia has positions in and has recommended Bendigo And Adelaide Bank. The Motley Fool Australia 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.

On Monday, the S&P/ASX 200 Index (ASX: XJO) started the week with a small gain. The benchmark index rose 5 points to 9,010.9 points.

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

ASX 200 to edge lower

The Australian share market looks set for a subdued session on Tuesday following a soft night in Europe. According to the latest SPI futures, the ASX 200 is expected to open the day 4 points lower. Wall Street was closed for Labor Day, but in Europe the FTSE fell 0.1% and the DAX dropped 0.15%.

Shares going ex-dividend

Another group of ASX 200 shares will be going ex-dividend on Tuesday and could trade lower. This includes AUB Group Ltd (ASX: AUB), BlueScope Steel Ltd (ASX: BSL), Mineral Resources Ltd (ASX: MIN), News Corporation (ASX: NWS), and Smartgroup Corporation Ltd (ASX: SIQ). Mineral Resources will be rewarding its shareholders with a fully franked 83 cents per share dividend on 30 September.

Oil prices rise

ASX 200 energy shares Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) could have a good session on Tuesday after oil prices rose overnight. According to Bloomberg, the WTI crude oil price is up 1.3% to US$92.70 a barrel and the Brent crude oil price is up 1.1% to US$97.314 a barrel. This was driven by a further escalation in US-Iran hostilities.

Gold price softens

ASX 200 gold shares Genesis Minerals Ltd (ASX: GMD) and Capricorn Metals Ltd (ASX: CMM) could have a soft session after the gold price dropped overnight. According to CNBC, the gold futures price is down 0.55% to US$4,452 an ounce. The precious metal has come under pressure due to increasing US rate hike bets.

Buy Select Harvests shares

Select Harvests Ltd (ASX: SHV) shares could be undervalued according to analysts at Bell Potter. This morning, the broker has retained its buy rating on the almond producer’s shares with an improved price target of $6.05 (from $5.30). It said: “Almond prices are strengthening and the SHV share price has lagged this move, continuing to trade below its market backed asset value of ~$5.30ps. At spot almond price levels, we would estimate FY27e EPS in a range of 53-72¢ps based on production guidance comparable to FY26e (i.e. 28,000-31,000kt), a level materially higher than the current consensus EPS level of ~37¢ps.”

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

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

There are wide variety of S&P/ASX 200 Index (ASX: XJO) share opportunities that we can buy. When one analyst thinks a business is a buy, that’s interesting. When there’s multiple brokers that think a stock is a buy, it could be a great opportunity.

Reporting season has recently finished, giving experts the chance to look over the numbers and valuations and select some of the best opportunities on the ASX.

Below are two of the most popular ASX 200 shares among analysts.

Breville Group Ltd (ASX: BRG)

Breville is one of the world’s leading coffee machine businesses, with multiple brands including Breville, Sage, Lelit and Baratza. It also has a coffee bean business called Beanz.

According to CMC Markets, there have been seven analyst ratings on the business within the last three months. All seven of those ratings were a buy. Not many ASX 200 shares have a 100% positive rating.

The average price target of those seven ratings on the ASX share is $37.36, which implies a possible rise of 18% from where it is at the time of writing. The most optimistic price target is $41.07, suggesting a possible rise of 29%.

FY27 saw solid growth for the business, despite the headwind of US tariffs. Revenue rose 6.7% to $1.81 billion, underlying operating profit (EBITDA) grew 4.5% to $284.1 million, and net profit after tax (NPAT) rose 1.7% to $138.1 million. This allowed the business to fund a 2.7% rise in the annual dividend per share to 38 cents.

Pleasingly, the company delivered double-digit revenue growth in coffee and cooking. Its young markets of China, South Korea, Mexico and Middle East) collectively grew revenue by more than 70%.

To manage exposure to US tariffs on China, it has substantially diversified its manufacturing. More than 85% of its 120-volt product gross profit dollars have now been sourced outside China.

It described the outlook for demand across its markets as “resilient” due to premium consumers, as the company navigates macroeconomic headwinds and company-specific tailwinds, including new product launches, fast-growing new geographies, solution plays and continued store-in-store expansion.

Charter Hall Group (ASX: CHC)

Charter Hall describes itself as a leading fully integrated diversified property investment and funds management group.

The ASX share invests in a diverse portfolio of high-quality properties across core sectors of office, industrial, logistics, retail and social infrastructure.

According to CMC Invest, there have been eight analyst ratings on the business within the last three months. Six of them were a buy rating and two of them were hold.

The average price target of those eight analysts is $25.15, which implies a possible rise of 32% over the next year. The most optimistic price target is $31.07 suggests a possible rise of 63%.

Charter Hall reported in FY26 that group funds under management (FUM) grew by $10 billion over the year to $94.3 billion, which is a strong driver of earnings. FY26 operating earnings per security (OEPS) grew 26.8% to $1.032.

The ASX share is expected to grow its OEPS by 10.5% in FY27 to $1.14, with the distribution expected to grow by another 6%.

The post 2 ASX shares highly recommended to buy: Experts appeared first on The Motley Fool Australia.

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• Where I’d invest $15,000 in ASX shares now
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Motley Fool contributor Tristan Harrison has positions in Breville Group. 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.

For years, ASX healthcare shares have been the market’s rotten apple. Once viewed as a defensive safe haven, the sector became one of the ASX’s biggest laggards.

The S&P/ASX 200 Health Care Index (ASX: XHJ) is still down 33% over five years and 18% over the past 12 months. Between January 2025 and June 2026, the index lost more than half its value.

Then August happened. The ASX 200 Health Care index surged 13% over a month and now sits 44% above its June low, comfortably beating the S&P/ASX 200 Index (ASX: XJO), which gained 3% over the same period.

So, have ASX healthcare shares finally turned the corner?

CSL leads the charge

The sector entered August with expectations firmly beaten down. That proved to be a blessing.

Companies largely cleared the low bar, with cost control doing much of the heavy lifting. Healthcare was also the only sector where more companies upgraded their outlooks for the year ahead than downgraded them.

CSL Ltd (ASX: CSL) was the standout. Its shares jumped 40% in August after plasma product sales for the June half came in ahead of expectations.

More importantly, management pointed to improving gross margins at CSL Behring, the plasma business that has caused plenty of headaches in recent years. UBS now believes the worst could be behind CSL ahead of its CEO transition in 2027.

Other healthcare heavyweights also delivered. Ansell Ltd (ASX: ANN) jumped 23% after beating expectations, with its FY27 guidance implying double-digit earnings-per-share growth at the midpoint.

Ramsay Health Care Ltd (ASX: RHC) gained 16% after a better-than-expected FY26 result. Its new management team expects further margin expansion in FY27, helped by more predictable private health insurance agreements, better operating theatre utilisation and procurement savings.

The rally wasn’t limited to those three names. Eight of the sector’s 10 largest ASX healthcare shares finished August higher. Cochlear Ltd (ASX: COH) climbed 13%, Telix Pharmaceuticals Ltd (ASX: TLX) rose 10%, and ResMed Inc (ASX: RMD) gained close to 10%.

Can the rebound continue?

This is where things get interesting. August was impressive, but FY27 will be the real test.

Management teams are generally optimistic, yet analysts aren’t quite as convinced. According to a recent Macquarie note, consensus FY27 earnings forecasts for the sector were actually cut by more than 2% during August.

There’s another problem: valuations have rebounded alongside share prices. The bargain-basement appeal that existed at June’s lows has largely disappeared. Investors are now paying more for the turnaround they hope is coming.

The August reporting season suggests CSL and several of its peers may finally be back on firmer ground. But after such a powerful rebound, the easy part may already be over.

Now, ASX healthcare shares need to deliver.

The post CSL led the ASX healthcare shares rebound. Can it continue? appeared first on The Motley Fool Australia.

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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 positions in and has recommended CSL, Cochlear, ResMed, and Telix Pharmaceuticals. The Motley Fool Australia has positions in and has recommended ResMed. The Motley Fool Australia has recommended Ansell, CSL, Cochlear, and Telix Pharmaceuticals. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Recently, investors have been searching for the optimal strategy to gain exposure to the artificial intelligence buildout. 

This has evolved from direct exposure through AI companies to the infrastructure that supports AI rather than in AI software itself.

The AI revolution and the ASX 

Because Australia has relatively few direct AI leaders comparable to Nvidia Corp (NASDAQ: NVDA) or Microsoft Corp (NASDAQ: MSFT), investors have focused on:

• Data-centre operators
• Electricity generators and infrastructure companies
• Mining companies with exposure to commodities needed to build and power data centres, particularly copper and uranium. 

ASX investors have also turned to thematic ASX ETFs that target these companies. 

Overall, the ASX AI investment strategy has increasingly become a “picks and shovels” approach: rather than trying to identify Australia’s next major AI software company, investors are targeting the physical infrastructure and resources needed to power and expand the global AI boom.

Adrad Holdings Ltd (ASX: AHL) has been identified as a potential beneficiary of the AI boom.

Company overview

Adrad is an Australian-based business specialising in the design, manufacture, importation and distribution of heat transfer solutions for the automotive and industrial markets in Australia, New Zealand and Southeast Asia.

Its stock price has risen over 50% year to date. 

Its strong rise in 2026 is closely connected to AI/data-centre infrastructure, but there is more to the story. AHL has exposure to the growing need for cooling systems for data centres, as well as mining, power generation and other heavy-industry applications.

Big upside for this ASX stock 

A fresh report from the team at Bell Potter suggests this ASX stock could be a long-term beneficiary of the AI boom. 

Bell Potter is increasingly positive on Adrad because of its exposure to the rapidly growing data-centre and AI infrastructure market. 

The company has responded to growing demand by doubling its Australian data-centre capacity and expanding manufacturing in Thailand, with the additional capacity already generating new customer orders. 

Bell Potter therefore expects this data-centre investment to support Adrad’s revenue and earnings growth over the medium term. 

While its FY27 forecasts remain unchanged, Bell Potter has upgraded its FY28 and FY29 expectations, increasing revenue forecasts by 3% and 5% and EPS forecasts by 9% and 13%, respectively. 

It now expects mid-to-high single-digit revenue growth and mid-to-high teens EPS growth in FY28 and FY29, respectively.

The broker has a buy recommendation on this ASX stock as well as an upgraded price target of $1.80 (previously $1.40). 

From yesterday’s closing price, this indicates approximately 14% upside. 

The post This ASX stock could be a surprise winner of the AI boom appeared first on The Motley Fool Australia.

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