Tag: Stock pick

If you have a high tolerance for risk, then it could be worth checking out the small-cap ASX share in this article.

That’s because if the team at Bell Potter is on the money with its recommendation, it could deliver explosive returns over the next 12 months.

Which small-cap ASX share?

The small cap that Bell Potter is recommending to clients is Bubs Australia Ltd (ASX: BUB).

It is an early-stage fast-moving consumer goods (FMCG) company with exposure to growing demand for premium foreign sourced infant formula (IMF) products in China and the United States.

Bell Potter notes that Bubs recently held its investor day event and was pleased with what it heard. It explains:

In a short span of time BUB has secured 1.3% share of the US IMF market, with a 9% share in the premium natural segment (a category that grew +44% YoY in 2025). Increasing access to product is a key driver of growth with store exposures grown +27% in 1H26 to 5,558 and an expansion to 8,891 targeted by end FY26. The USFDA approval process for permanent market access is ongoing.

Targeting entry into Vietnam, Canada and Mexico, markets with a combined value of A$3.4Bn and growing at an aggregated forecast rate of ~10% p.a. Replicating some of the success seen in Australia and the US (share of 5.1% and 1.3%, respectively) implies a reasonable level of upside if successful.

Bell Potter was also pleased to see that the small-cap ASX stock has reaffirmed its guidance for FY 2026. This will see revenue of $120 million to $125 million, which is up from $104.5 million in FY 2025.

Big potential returns

According to the note, the broker has retained its speculative buy rating and 18 cents price target on the small-cap ASX stock.

Based on its current share price of 11 cents, this implies potential upside of 64% for investors over the next 12 months.

Bell Potter is bullish on the company due to its belief that FY 2026 will be a transformational year. It explains:

FY26e is a transformational year for BUB, with reported EBITDA projected at $4-6m despite incurring $5m in air freight and tariff related expenses, some of which will dissipate in FY27e. In the near term a +59% expansion in ranging points in the US and market realignment of China IMF channels towards English label formats should support a stronger 2H26e sales outcome.

With the US the primary growth engine of the business, gaining permanent access, is likely to prove a de-risking event from a value standpoint. In the interim, recent quarterly reporting saw BUB continue to materially outperform its US IMF peer group in growth (up +32% YoY in 2Q26 in USD terms vs. sector peer weighted revenue growth of -7% YoY).

The post This small-cap ASX share could rise 60% 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 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.

Light & Wonder Inc (ASX: LNW) shares have been out of favour recently, retracing sharply from levels higher than $180 in January to just $123.94 now.

The analysts at Macquarie have taken a look at the gaming company’s business and believe there’s some serious share price upside to be had. We’ll get to what their exact price target on the shares is later.

But firstly, why the cause for optimism?

Profit to grow

Macquarie is predicting calendar-year net profit of US$638 million for Light & Wonder, with the broader broker consensus estimate at US$640 million.

This compares with the company’s CY25 full-year result of US$567 million, which was itself an 18% rise from the previous year, on revenues of US$ 3,314 million, up 4%.

Light & Wonder Chief Executive Officer Matt Wilson said regarding the 2025 result:

We closed out 2025 with another strong quarter, delivering double-digit year-over-year growth in both revenue and cash flows. We also achieved several important milestones, including the successful acquisition and integration of Grover, accelerating our expansion in the Charitable Gaming market, and our transition to a sole primary listing on the ASX. We also continued to invest in our studios, which is paying dividends as our franchises drive strong game performance across the portfolio. Gaming momentum remained robust, with more than 700 North American Gaming operations units(6) added sequentially and over 12,300 units shipped globally during the quarter, while iGaming delivered another quarterly revenue and AEBITDA records. Looking ahead, we will remain focused on investing in product innovation and talent to strengthen our recurring revenue model(5), build on this momentum, and enhance our global competitive position as we progress toward our 2028 financial targets.

Shares looking cheap

The Macquarie team said they expected Light & Wonder to deliver improved quarter-to-quarter earnings growth in 2026, giving overall earnings growth a skew towards the second half of the year.

They added:

Revenues have 2H drivers, and with costs, there are some one-offs within 1H including legal and Grover’s Indiana entry, whilst tariff impacts will annualise in 3Q26. Importantly, the backdrop is mostly robust with US casino revenue trends and North America iGaming showing growth, but with Social Casino there are headwinds, meaning that SciPlay needs to win market share to grow.

Macquarie said Light & Wonder was Macquarie’s top pick in the Australian gaming sector, as it was well-positioned to win market share and had a “wide moat from disruption”.

Macquarie has a price target of $205 on Light & Wonder shares, compared with the current share price of $123.94. If achieved, this would represent a return of 65.4%.

Light & Wonder was valued at $10 billion at the close of trade on Thursday.

The post How high does Macquarie think this gaming stock will go? appeared first on The Motley Fool Australia.

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Motley Fool contributor Cameron England has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Light & Wonder Inc and Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool Australia has recommended Light & Wonder Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The 4DMedical Ltd (ASX: 4DX) share price is off to the races.

Again.

Shares in the S&P/ASX 300 Index (ASX: XKO) respiratory imaging technology company closed yesterday trading for $6.28. In earlier trade, shares leapt to $7.55, up 20.2%. After some likely profit-taking, in later morning trade, shares are changing hands for $6.85 apiece, up 9.1%.

For some context, the ASX 300 is down 0.3% at this same time.

Taking a step back, the 4DMedical share price is now up a jaw-dropping 2,074.6% over 12 months. That meteoric rise has been spurred by a series of international regulatory approvals for its CAT scan-based ventilation-perfusion software, CT:VQ.

Indeed, just one year ago, you could have bought the ASX 300 healthcare stock for a mere 31.5 cents. That would have turned an $8,000 investment into $173,968.

Boom!

Now, here’s what’s catching investor interest again today.

4DMedical share price surges on EU approval

The 4DMedical share price is leaping higher after the company announced that CT:VQ has received CE Mark certification for commercial use in the European Union.

The company noted that CE Mark certification enables it to immediately commence commercial engagement with healthcare providers across the EU. This sets up a pathway for clinical adoption and collaboration with major European hospital networks.

Investors will also have noted that the EU has a population of more than 450 million. And with the economic block already home to highly developed hospital-based imaging infrastructure, 4DMedical said the EU constitutes one of the largest global markets for advanced cardiothoracic imaging.

What else is impacting the 4DMedical share price today?

Atop the European Union’s CE Mark certification, the company also announced an institutional capital raising.

4DMedical said it has received commitments from institutional investors for an $83 million private placement at an issue price of $5.90 per share.

That’s a 6.1% discount to the 4DMedical share price at market close yesterday. But the company noted it represents a 12.3% premium to the 5-day volume average weighted price (VWAP).

The proceeds will be used, in part, to fund the commercial launch of CT:VQ across Europe and international markets.

What did management say?

Commenting on the EU green light and capital raise that sees the 4DMedical share price up sharply again today, CEO and founder Andreas Fouras said, “CE Mark certification for CT:VQ is a significant milestone that opens access to one of the world’s largest and most sophisticated healthcare markets.”

Fouras continued:

Combined with FDA clearance, 4DMedical now holds regulatory approval to rapidly commercialise CT:VQ across both the US and the EU. Since FDA clearance, rapid adoption by leading US institutions … reflects the level of excitement CT:VQ is generating in the United States.

This placement, timed alongside CE Mark certification, gives us the resources to carry that same momentum into Europe… With an estimated 400,000 nuclear VQ scans performed annually across the EU, and an extensive network of CT scanners, the European opportunity is substantial and immediate.

The post Up 2,075% in a year, why is the 4DMedical share price rocketing again on Friday? appeared first on The Motley Fool Australia.

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• ASX 300 stock rockets 38% on ‘landmark moment’
• Up over 900%: Is it too late to buy this incredible ASX tech stock?

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.

Syrah Resources Ltd (ASX: SYR) shares are crashing deep into the red on Friday.

In morning trade, the ASX mining stock is down 24% to a multi-year low of 11 cents.

Why is this ASX mining stock crashing?

Investors have been selling the graphite producer’s shares after it raised capital for the fourth time in four years.

According to the release, Syrah has successfully completed the institutional component of a fully underwritten pro rata accelerated non-renounceable entitlement offer.

The ASX mining stock advised that the institutional entitlement offer was supported by existing and new institutional shareholders, raising approximately A$44 million (US$30 million) at a fixed price of 10.5 cents per new share. This represents a 27.6% discount to its last close price.

Approximately 88% of entitlements available to institutional shareholders in the institutional entitlement offer were taken up by existing shareholders.

The new shares that were not taken up by eligible institutional shareholders and ineligible institutional shareholders were fully allocated to new investors and major shareholder AustralianSuper.

Syrah will now push ahead with retail component of the equity raising, which is fully underwritten and expected to raise approximately A$61 million (US$42 million).

Funding update

In addition, the ASX mining stock revealed that it has received non-binding strategic funding proposals from US International Development Finance Corporation, the US Department of Energy and AustralianSuper to reset Syrah’s balance sheet.

Under the proposals, a substantial portion of Syrah’s debt would be converted or exchanged for new Syrah shares and convertible loan notes.

This would boost pro forma liquidity to up to US$198 million and there would be no cash interest or principal repayments for the next three years.

Combined with its equity raising, Syrah will be well-positioned for the ramp-up of Balama to targeted production levels and Vidalia working capital to achieve commercial sales.

Syrah’s managing director and CEO, Shaun Verner, commented:

Following the Equity Raise and the Strategic Funding Proposals, Syrah will have a robust balance sheet with pro-forma liquidity of ~US$198 million to support ramp up at Balama and Vidalia and provide a pathway to near term sustainable cash flow generation.

The strong alignment with the US International Development Finance Corporation, the US Department of Energy and AustralianSuper underscores the strategic importance of Syrah’s assets in developing a secure, ex-China supply chain for critical battery materials. The strategic proposals and funding position Syrah to advance our operations as the global graphite and anode materials markets evolve.

The post Guess which ASX mining stock is crashing 24% today 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 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 are a very popular option for passive income investors.

It isn’t hard to see why this is the case.

Twice a year, the mining giant rewards its shareholders with fully franked dividends.

And, depending on the mining cycle, this can mean several billions of dollars heading into the pockets of Aussie investors.

But what would I need to do if I wanted to generate $1,000 of passive income from BHP shares? Let’s run the numbers.

Passive income from BHP shares

To begin with, let’s see what analysts are expecting the Big Australian to pay to shareholders in the near term.

The consensus estimate is for fully franked dividends of approximately $2.05 per share in FY 2026 and then $1.80 per share in FY 2027.

However, it is worth noting that BHP’s interim dividend for FY 2026 has now been paid. As a result, the next two dividends will be its final dividend for the current financial year and the interim dividend for the next one.

Based on that, we will assume that BHP shares provide a dividend of 192.5 cents per share over the next 12 months.

This means that to generate $1,000 in passive income, I would need to buy a total of 519 BHP shares.

How much will that cost?

At the time of writing, BHP shares are changing hands for $49.96.

This means that to buy the 519 shares I need for $1,000 of passive income, I would need to invest $25,929.24.

That’s certainly not a small amount. But it could be worth it.

Not only would I be getting a nice paycheck every six months, but there is potential for capital returns too.

BHP shares tipped to rise

According to the note out of Morgan Stanley this month, its analysts have put an overweight rating and $56.00 price target on the mining giant’s shares.

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

This means that if Morgan Stanley’s recommendation is on the money, those 519 BHP shares would be worth $29,064 in a year. That’s over $3,100 more than I started with and doesn’t include the $1,000 of passive income.

So, in total, a return of approximately $4,100 could be possible from an investment of just under $26,000.

The post How many BHP shares do I need to $1,000 of passive income? 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 BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

S&P/ASX 200 Index (ASX: XJO) uranium stock Silex Systems Ltd (ASX: SLX) is marching higher today.

Shares in the company, which focuses on laser uranium enrichment technology, closed yesterday trading for $5.29. In early morning trade on Friday, Silex shares are changing hands for $5.31 apiece, up 0.4%.

For some context, the ASX 200 is down 0.6%, with the Aussie benchmark index following US markets lower as hopes for a near-term end of the Iran war fade.

Here’s why Silex shares are outperforming.

ASX 200 uranium stock gets US government boost

Investors are bidding up Silex shares this morning after the company announced a major US government funding package for Global Laser Enrichment (GLE). GLE is the exclusive licensee of the Silex uranium enrichment technology.

The ASX 200 uranium stock said it has received preliminary approval on an incentives package with the Commonwealth of Kentucky and McCracken County. The funding from the state and local governments will support the development of the planned Paducah Laser Enrichment Facility (PLEF).

Silex reported that the performance-based incentives package will provide the company with up to US$98.9 million (AU$142.6 million) in tax and other economic incentives, subject to GLE reaching certain investment and job creation levels.

The PLEF is expected to be the single largest capital investment in Western Kentucky’s history.

To date, the ASX 200 uranium stock noted that GLE has been backed by around US$600 million in privately funded engineering, design, manufacturing, and licensing investments across North Carolina and Kentucky.

GLE was also recently awarded up to US$28.5 million from the US Department of Energy (DOE).

Silex said that it expects the planned PLEF will “play a pivotal role” in rebuilding and strengthening the US domestic supply chain for uranium, conversion, and enrichment services.

What did management say?

Commenting on the funding package that’s helping boost the ASX 200 uranium stock today, Silex CEO and managing director Michael Goldsworthy said, “We are greatly appreciative of the support for GLE’s PLEF from the Commonwealth of Kentucky and McCracken County.”

Goldsworthy added:

With an advanced Nuclear Regulatory Commission (NRC) licensing effort underway, ongoing focus on technology and manufacturing maturation programs and full-scale preliminary detailed design for the PLEF, we welcome the support for the PLEF from US federal, state, and local partners as we progress towards the commercial deployment of the world’s first lased-based uranium enrichment plant.

With today’s intraday gains factored in, shares in the ASX 200 uranium stock are up 38.9% over 12 months, racing ahead of the 6.3% one-year gains posted by the benchmark index.

The post ASX 200 uranium stock lifts off on $143 million US laser news appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has 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.

Xero Ltd (ASX: XRO) shares are ending the week positively.

In morning trade, the cloud accounting technology company’s shares are up 2.5% to $74.24.

Why are Xero shares rising?

Investors have been buying the company’s shares following the release of a promising announcement.

There have been concerns that artificial intelligence (AI) could disrupt Xero’s business, but today it has demonstrated how it could strengthen it.

This morning, Xero and Anthropic, the company behind Claude, announced a multi-year partnership that will bring Claude’s AI directly into Xero, and Xero’s financial data and tools into Claude.ai.

According to the release, this will give small businesses and their accounting and bookkeeping advisors real-time financial intelligence and the ability to act on it, wherever they choose to work.

Xero’s chief product and technology officer, Diya Jolly, said:

Every day, millions of small business owners ask the same questions: Why is cash tight this month? Which invoices are overdue? Can I afford to hire?

To run their business efficiently, small business owners and their accountants and bookkeepers need to be able to answer these questions and act on them in real time whether using Xero or Claude. This partnership delivers on that.

The company notes that it is the first time Xero customers will be able to work with their financial data directly inside a major AI platform, and a new way for Claude to power end-to-end financial workflows for small businesses at scale.

It highlights that for millions of small businesses, this will mean less time manually chasing invoices or piecing together cash flow across multiple reports, with Claude proactively surfacing the insights and actions that would otherwise take hours to find.

Moving into agentic workflows

Commenting on the partnership, Jolly adds:

Small businesses and advisors don’t just need data; they need a digital partner that acts on it. Integrating Claude moves Xero into agentic workflows, where Xero’s AI superagent, JAX (Just Ask Xero), does the heavy lifting, from predicting cash flow gaps to executing complex financial tasks.

Crucially, this trusted intelligence isn’t locked into one platform; it follows the user securely wherever they choose to work, empowering advisor collaboration. By shifting the admin burden to a team of agents orchestrated by JAX, we’re giving our customers time back and providing them with clarity so they can make informed decisions and focus on the future.

The company advised that Claude-powered insights within Xero and the integration of Xero experiences into Claude.ai is expected to be available in the coming months.

As part of the deal, Xero revealed that its engineering teams will be able to use Claude and Cowork to accelerate their own product development.

The post Xero shares push higher on deal with AI giant Anthropic appeared first on The Motley Fool Australia.

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

Weebit Nano Ltd (ASX: WBT) shares are under pressure on Friday.

In early trade, the ASX tech stock is down 15% to $3.88.

Why is this ASX tech stock falling today?

The semiconductor company’s shares are falling today in response to broad market weakness and the completion of a capital raising.

According to the release, Weebit Nano has successfully completed a fully underwritten $80 million institutional placement, alongside an additional $7 million placement to investors in Israel.

In total, the company is issuing approximately 21.5 million new shares, representing around 9.4% of its existing shares on issue.

The ASX tech stock revealed that the new shares were issued at $4.05 each, which represents a 10.8% discount to the company’s last closing price.

Share purchase plan to follow

In addition to the placement, the company also announced plans for a share purchase plan (SPP) to raise up to $15 million from eligible retail investors.

The SPP will be offered at the same issue price of $4.05 per new share, allowing existing shareholders the opportunity to participate in the capital raising without brokerage costs.

Why is it raising funds?

Weebit Nano revealed that the proceeds from the raising will be used to accelerate its strategy of becoming a leading provider of ReRAM memory technology.

Commenting on the raise, Weebit Nano’s CEO, Coby Hanoch, said:

This is a strategic capital raise for Weebit Nano. It significantly strengthens our balance sheet, enabling us to accelerate development and commercial activities to ensure our ReRAM is the clear leader at a time when the industry is moving to adopt ReRAM in next-generation technologies. As the market’s only independent provider of qualified ReRAM, we have the first mover advantage. Still, scaling our R&D activity is essential to continuously improving the technology and solidifying our leadership position for many years to come.

Our recent licensing agreement with leading semiconductor vendor Texas Instruments, following the deals with onsemi and DB HiTek, has reinforced the market perception that ReRAM is the successor to embedded flash, and we are continuing to progress technical evaluations and commercial negotiations with many of the world’s leading foundries, IDMs and product companies. We also see clear opportunities to expand our offering, addressing genuine memory needs for AI in-memory compute (IMC) applications as well as within the discrete memory chip domain, among others. This Placement enables us to strengthen our newly formed System and AI team.

Despite today’s weakness, Weebit Nano shares are up approximately 90% since this time last year from $2.06.

The post Why are Weebit Nano shares crashing 15% today? 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 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.

Premier Investments Ltd (ASX: PMV) announced its first-half results last week, and analysts subsequently took the opportunity to run the ruler over them.

Two of the three brokers we surveyed subsequently reduced their price targets for the company’s shares, although all three still have a bullish outlook. More on that later.

Firstly, let’s have a look at what was announced.

Profit under pressure

Premier last week announced that first-half revenue came in at $460.3 million, down 1.1%, while net profit was 13.1% lower at $101.7 million.

The company’s wholly-owned brands, Peter Alexander and Smiggle, contributed $119.3 million in EBIT.

Premier also announced the appointment of Georgia Chewing as Managing Director of Smiggle, “following a comprehensive strategic review aimed at delivering sustainable global growth for the brand”.

The company said further:

The Board has reaffirmed a Premier Retail organisational structure aimed at providing clear accountability and oversight to support the current two brand structure. Judy Coomber (Managing Director – Peter Alexander) and Georgia Chewing (Managing Director – Smiggle) are outstanding retailers tasked by the Board to achieve significant growth targets set by the Board for both brands. Following a period of significant transformation, John Bryce will return to his core responsibilities as Premier Retail CFO with a relentless focus on cost controls and oversight and accountability for the proven ‘best in class’ logistics and services, supporting the two growth brands.

Premier Investments chair Solomon Lew said the past two and a half years had been a period of significant change for the business, and it was now set up for profitable growth.

He added:

Today, we have a leaner business. The Premier Investments Board is keen to see our brands operate with the speed and agility required to keep pace with consumer trends and spending volatility. The Board now looks toward the optimal organisational structure that supports the current 2-brand business of Premier Retail.

Shares looking cheap

Morgan Stanley’s analyst team had a look at the results and lowered its 12-month price target on Premier Investments shares from $19.20 to $16.90, compared with $12.58 currently.

They said the first-half result was in line with guidance, with slight weakness in Peter Alexander sales “against high expectations”.

They added that the appointment of a Smiggle boss “adds greater certainty around the scope and timing of the strategic reset”.

The analysts at Jarden also reduced their price target on Premier Investments shares, from $16.90 to $15.50.

They said they believed Premier could stabilise the Smiggle business now that a leader was in place.

The Jarden team said that while headwinds were building for the business overall, in terms of rate hikes and petrol pricing, they had raised their earnings forecasts for the company due to “high management alignment”.

RBC Capital Markets, in a quick take published on the day the results were announced, said it had a price target of $13.90 on Premier Investments shares.  

Premier was valued at $2.05 billion at the close of trade on Thursday.

The post 3 brokers weigh in on how high Premier Investments shares could go appeared first on The Motley Fool Australia.

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

This ASX lithium stock has surged more than 170% over the past year. This makes PLS Group Ltd (ASX: PLS) one of the top performers in the S&P/ASX 200 Index (ASX: XJO) over the period.

The outlook for this ASX lithium stock looks bright, as lithium sits at the heart of electrification. Short-term volatility aside, long-term demand for battery materials remains strong with the global shift towards electric vehicles and battery storage in full swing.

And there are other reasons to like PLS Group.

A world-class lithium operation

At the heart of the business is the Pilgangoora project in Western Australia. It’s one of the largest independent hard-rock lithium operations globally.

That matters. Large, long-life assets are gold in the resources sector. They can generate strong cash flow across multiple commodity cycles. When prices rise, they print money. When prices fall, the best assets survive.

This $16 billion ASX lithium stock ticks that box.

And it’s not just about size. It’s about execution. In its latest interim result, production climbed to 432.8kt, while sales reached 446kt for the half. That’s a strong operational performance in a volatile market.

Even more impressive? The company is improving as it grows. Unit costs are falling. Realised prices have lifted. That combination shows operational discipline — and leverage when lithium markets turn favourable.

Built to handle the cycle

Lithium is a cyclical game. Prices can swing hard.

That’s why balance sheet strength matters — and this ASX lithium stock has it. The company finished the half with around $954 million in cash and total liquidity of roughly $1.6 billion.

That’s a serious buffer. It means management doesn’t have to panic when prices dip. Instead of cutting back, it can invest through the cycle and position the business for the next upswing.

For long-term investors, that kind of resilience is critical.

Bold South American move

This ASX lithium stock isn’t standing still. About a year ago, PLS made a bold move — acquiring Latin Resources for roughly $560 million. That deal added the Colina lithium project in Brazil to its portfolio.

Timing was everything. The acquisition came near the bottom of the lithium cycle, when asset valuations were under pressure. In a stronger market, the same deal likely would have cost much more.

Now, PLS has a potential second growth engine. Pilgangoora continues to generate cash, while Colina offers future upside. That’s a powerful combination.

Riding the energy transition

Zoom out, and the long-term picture looks compelling. Lithium demand is expected to surge over the next decade. Electric vehicles, battery storage, and renewable energy systems all rely on it.

No one can predict short-term price moves. Volatility will remain. But companies with large, low-cost, high-quality assets tend to win over time.

The ASX lithium stock fits that profile. It already has scale and has established partnerships across the lithium supply chain. On top of that, it has proven it can operate efficiently.

Foolish Takeaway

Pilbara Minerals is not immune to lithium price swings. The ride won’t always be smooth. But with a world-class asset, a strong balance sheet, and smart expansion moves, it looks well placed for the long term.

For investors betting on the energy transition, this is one ASX lithium stock worth serious attention.

The post 3 reasons to buy this high flying ASX lithium stock for the long term 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 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.