Tag: Stock pick

With reporting season underway and market volatility still creating opportunities, February could be a good time to take a closer look at high-quality ASX growth shares that analysts believe are trading below their true value.

But which ones tick these boxes?

Listed below are three ASX growth shares that analysts are tipping as buys. Here’s what they are recommending to clients:

Aristocrat Leisure Ltd (ASX: ALL)

The first ASX growth share to consider in February is Aristocrat Leisure Ltd.

Aristocrat is one of the world’s leading gaming technology companies, with operations spanning poker machines, real money gaming, and mobile games. Its strength lies in high-quality and popular game content and long-term relationships with gaming operators around the world.

Bell Potter is bullish on the company’s outlook. The broker believes Aristocrat is well placed to benefit from ongoing growth in digital gaming and continued investment in regulated gaming markets globally.

It recently put a buy rating and $80.00 price target on its shares. Based on its current share price of $52.22, this implies potential upside of over 50%.

Lovisa Holdings Ltd (ASX: LOV)

Another ASX growth share that analysts are excited about is Lovisa Holdings Ltd.

Lovisa is a fast-growing fashion jewellery retailer that is in the middle of an ambitious global expansion. At last count, the company was operating 1,075 stores across more than 50 markets, with new store openings continuing at pace.

Morgans has named Lovisa as one of its top picks in the retail sector, highlighting the company’s scalable store model and strong brand appeal. If Lovisa continues executing on its international rollout, the business could look materially larger over the next few years.

The broker recently put a buy rating and a $40.00 price target on its shares. Based on its current share price of $32.09, this suggests that upside of approximately 25% is possible between now and this time next year.

NextDC Ltd (ASX: NXT)

A final ASX growth share to buy in February could be NextDC.

NextDC is one of the Asia-Pacific region’s leading data centre-as-a-service providers, delivering critical power, security, and connectivity to cloud platforms, enterprises, and government customers. Its network of centres continues to expand across Australia and the broader region.

Morgans recently upgraded NextDC shares. The broker sees long-term demand for data centre infrastructure being driven by cloud adoption, data growth, and emerging AI workloads, all of which underpin NextDC’s growth outlook.

It has a buy rating and $19.00 price target on its shares. Based on its current share price of $13.22, this implies potential upside of more than 40%.

The post 3 stellar ASX growth shares that could rise 25% to 50% appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• 5 ASX 200 shares forecast to soar 100% (or more) in 2026
• Why Amcor, Lovisa, Regal Partners, and SKS shares are pushing higher today
• These ASX shares look cheap and could reward patient investors
• How much could a $10,000 investment in these ASX 200 stocks be worth if they hit 12 month targets?

Motley Fool contributor James Mickleboro has positions in Lovisa and Nextdc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Lovisa. 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.

Plenty of new ASX ETFs have hit the market over the past year. 

ETF providers are giving investors more and more opportunities to gain exposure to niche themes and sectors. 

Thematic investing involved targeting a specific theme. There are no specific rules around how a particular theme is defined.

However themes tend to centre around future changes such as disruptions, new technologies and megatrends, sustainability, founder-led companies, or sub-sectors like electric vehicles and cybersecurity.

Thematic investing has been on the rise, which has led ASX ETF providers to release new funds that aim to capture these emerging themes. 

Lately, we have seen new ASX ETFs hit the market that target themes like silver, commodities, or geographical focusses such as the Global X Japan TOPIX 100 ETF (ASX: J100) which listed last year.

Yesterday, the team at Betashares announced the latest ASX ETF set to hit the market. 

Global Momentum ETF

The newest ASX ETF from Betashares will trade under the name: Betashares Global Momentum ETF (ASX: GTUM). 

According to Betashares, it aims to track the performance of an index (before fees and expenses) comprising a portfolio of global developed markets companies (excluding Australia) with above average momentum scores, as measured by risk-adjusted returns.

GTUM’s Index ranks stocks within the eligible universe based on 6 and 12-month risk adjusted returns to target more sustainable positive momentum over sharp, highly volatile run-ups. 

Stocks displaying consistently strong positive momentum over recent history are rewarded with higher weights in the index.

At the time of writing, it is made up of 200 underlying holdings. 

Its largest sector allocation is to: 

• Financials (29.9%)
• Information Technology (22.6%)
• Industrials (22.1%)

By country: 

• United States (46.4%)
• Canada (11.9%)
• Japan (8.7%)
• Britain (8.0%)
• Spain (5.8%)

In yesterday’s report from Betashares, the ETF provider said momentum offers a unique return profile that differentiates it from other style factors such as quality and value, historically exhibiting low or even negative excess return correlation.

As a result, it can be an appealing complement to many equity funds (both active and passive) which often exhibit style biases. Blending momentum with its distinct return profile may therefore provide meaningful diversification benefits within an existing equity portfolio.

What is momentum investing?

The ethos behind the fund is momentum investing. 

This is a strategy that involves buying companies that have outperformed and selling or avoiding those that have recently underperformed.

According to Betashares, rather than aiming to profit from underlying company fundamentals, momentum investing instead is based on the theory that rising asset prices tend to continue rising, and falling prices tend to continue falling.

Since its inception in January 2011 to end December 2025, GTUM’s Index has outperformed the MSCI World Ex Australia Index by 3.14% p.a.

The post Harness momentum with this new ASX ETF 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 no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The sell-off in the ASX growth share space has been brutal, but this could be a good time to identify All Ordinaries (ASX: XAO), or ASX All Ords, stock opportunities that have declined too far.

I’m going to highlight two businesses that are growing quickly, but where the valuation is now dramatically lower. It’s true that there is uncertainty, but the valuation decline has more than made up for that, in my view.

AI certainly does raise questions of how software will change in the coming years, but I think the future looks bright for the two below, particularly at the lower valuations.  

Siteminder Ltd (ASX: SDR)

The company says it’s the name behind Siteminder software, which claims to be the world’s leading hotel distribution and revenue platform, while its Little Hotelier offering is an all-in-one hotel management software that “makes the lives of small accommodation providers easier”.

With offices in Bangalore, Bangkok, Barcelona, Berlin, Dallas, Galway, London, Manila and Mexico City, it’s a truly global business, generating more than 130 million reservations worth more than A$85 billion in revenue for its hotel customers each year.

The company sees a significant growth runway in selling more to its existing customer base. Its current annual recurring revenue (ARR) represents approximately 0.3% of the A$85 billion of gross booking value it facilitates.

That percentage could rise to more than 1.5% of gross booking value for the ASX All Ords stock, if customers adopt its full suite of smart platform tools, which help forecast travel demand and adjust room rates for optimal pricing. Siteminder can automatically optimise pricing and distribution for customers.

Revenue growth from existing subscribers, as well as ongoing record hotelier wins, is part of the company’s overall goal to deliver 30% annual revenue growth in the coming years.

Despite this strong growth, the Siteminder share price is down more than 40% since October 2025, as the chart below shows. I think the company’s net profit and cash flow can soar in the coming years thanks to operating leverage.

Temple & Webster Group Ltd (ASX: TPW)

Temple & Webster is another ASX All Ords stock that has enormous growth potential but has dropped heavily. The online retailer of homewares, furniture and home improvement products (such as kitchen, bathroom, curtains, blinds and wallpaper items).

The business is benefiting from the steady progress of online shopping adoption. The online penetration of the homewares and furniture market is 20% in Australia, compared to 29% in the UK and 35% in the US, suggesting there’s a significant runway for the next few years.

The company’s home improvement segment is growing rapidly (where the online penetration is only between 5% to 10% in Australia) – in FY25, this segment’s revenue soared 43% to $42 million.

Temple & Webster has a number of growth avenues as it targets $1 billion of annual sales in the medium-term. The company has recently started shipping items to New Zealand, opening up a few million potential customers in that market.

As the company’s revenue rises, I’m expecting margins to grow thanks to lower fixed costs (in percentage terms), improved productivity with AI and tech tools, and a better marketing return on investment (ROI).

Put all of the above together, and I’m expecting the ASX All Ord stock’s bottom line to improve significantly over the next three or four years.

The post 2 excellent ASX All Ords stocks I’d buy today appeared first on The Motley Fool Australia.

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

Global asset manager, Sprott, which specialises in precious metals and critical materials investments, says the debasement trade is one of the strongest global market themes in play today, and a key reason why metal prices are likely to continue rising.

In an article, Paul Wong and Jacob White from Sprott Asset Management say:

A year ago, the debasement trade was outside of the mainstream, but it has evolved into a structural allocation theme.

Let’s decode this financial lingo.

What is debasement?

Debasement refers to currency debasement, or a weakening in the purchasing power of a currency.

Purchasing power is being eroded in many developed nations right now because central banks are expanding the money supply.

They’re doing this by purchasing government bonds and keeping interest rates low, in order to support governments running large fiscal deficits, which are prevalent globally today.

Wong and White point out that US public debt surpassed $38 trillion in 2025, double the level of a decade ago, and few major economies have run a fiscal surplus since the early 2000s.

Here’s how all of this works in simplified terms.

Fiscal deficits and bonds

Governments running deficits — which means they are spending more than they are collecting in tax — issue new bonds to raise money to support their big spending programs.

The higher volume of bonds in the marketplace helps lower their yields, which ultimately lowers the cost to governments.

Central banks buy the bonds as a supportive measure. They don’t care about receiving a low yield because their primary purpose is to keep the financial system stable.

But investors certainly care, and, of course, they are less inclined to buy bonds when yields are low.

Meanwhile, the additional money circulating in the economy degrades the purchasing power of money, which weakens the currency, and can push up inflation.

Wong and White comment:

The pandemic-era policy mix of greater debt, deficits and stimulus has entrenched fiscal dominance as a structural regime.

In theory, central banks should act independently to maintain price stability. In practice, ballooning deficits and soaring interest expenses have tied policymakers’ hands.

Every rate hike amplifies the government’s debt-servicing burden, creating a feedback loop that incentivizes lower rates and liquidity injections, even when inflation remains above target.

By late 2025, this regime was evident across developed markets. 

Large fiscal deficits and low bond and savings yields make gold and other hard assets more appealing as alternative stores of value and a hedge against inflation.

White and Wong say:

… the debasement trade is likely to accelerate, reinforcing the strategic case for hard assets in institutional portfolios.

This bodes well for metal prices.

Central banks buying gold

Central banks are key facilitators of the debasement trade today.

Experts say a structural shift is underway, as central banks around the world diversify their reserves away from the US dollar, whose purchasing power is under pressure, into gold.

As central banks have increased their gold holdings, they’ve pushed the gold price higher.

The gold price rose 27% in 2024, 65% in 2025, and is up 12.5% in the year-to-date, despite the recent rout.

This has encouraged both institutional and retail investors to follow suit, rotating out of cash and bonds and into hard assets such as gold, silver, and other select commodities.

They’re also buying mining shares, which is why ASX materials was the top performing sector last year, returning a staggering 36%.

60/40 portfolio losing relevance

In these circumstances, Sprott says traditional portfolio construction is undergoing a profound shift as traditional models lose relevance.

Traditional portfolios have a 60/40 construction, with 60% in growth assets like shares, and 40% in cash and other fixed-income assets.

This is the classic, default ‘balanced’ superannuation portfolio mix.

But Sprott says 60/40 is losing relevance given the eroded purchasing power of many currencies around the world.

Wong and White comment:

The 60/40 framework has broken down, with bonds no longer providing reliable hedging power as inflation becomes the secular driving force.

Volatility and the growing awareness of the debasement trade have prompted investors to allocate toward commodities.

Hard assets now serve as essential hedges against fiscal and monetary credibility shocks, geopolitical fragmentation and supply disruptions.

These are portfolio risks that equities and bonds cannot fully mitigate in a rapidly deglobalizing world.

The post Forget bonds, metals are now the ‘essential hedges’: experts appeared first on The Motley Fool Australia.

More reading

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• 2 ASX shares that could turn $100,000 into $1 million
• Forget term deposits and buy these ASX dividend shares
• 5 things to watch on the ASX 200 on Friday

Motley Fool contributor Bronwyn Allen 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.

For passive income investors, ASX energy stocks are shaping up as an increasingly attractive hunting ground.

With power prices elevated, infrastructure cash flows holding firm and balance sheets improving, Origin Energy Ltd (ASX: ORG), AGL Energy Ltd (ASX: AGL) and APA Group (ASX: APA) are well placed to keep rewarding shareholders.

For dividend investors willing to look beyond the banks, these top ASX energy stocks could be a compelling place to generate passive income.

Origin Energy Ltd (ASX: ORG)

Origin Energy has re-established itself as a solid income option after a few volatile years. The ASX energy stock pays semi-annual dividends. At current price levels it offers a yield of around 5.1%, with a history of fully franked payouts when earnings allow.

Origin’s strength lies in its diversified earnings base across energy retailing, generation and LNG exposure. This mix can support dividends through the cycle. At the same time, management is investing heavily in renewables, storage and international growth opportunities, which could underpin future cash flow.

The key weakness is earnings volatility. Profit can swing with wholesale energy prices and regulatory settings, meaning the dividend payout may fluctuate from year to year.

AGL Energy Ltd (ASX: AGL)

This ASX energy stock is another familiar name for income seekers, but it comes with higher risk. The company traditionally targets a payout of 50% to 75% of underlying profit. It currently offers a yield broadly in line with Origin.

AGL’s scale as Australia’s largest electricity generator gives it a strong market position. It also enables it to generate substantial cash flow in favourable conditions. However, margins have come under pressure. The ASX energy company also faces heavy capital requirements as it accelerates the closure of coal plants and builds out renewable capacity.

That transition creates uncertainty around earnings and dividend sustainability in the near term, making AGL a higher-yield, higher-risk option.

APA Group (ASX: APA)

APA Group stands out as the pure income play of the trio. With a yield often north of 6%, APA has built a long-standing reputation as a dependable distributor, supported by regulated and contracted gas pipeline assets.

Its dividend distributions are paid twice yearly and have grown steadily over many years, appealing to investors seeking predictable income. The defensive nature of its infrastructure assets is a major strength.

However, the group carries meaningful debt and runs with high payout ratios. Regulatory changes and funding costs are the main risks to watch.

Foolish Takeaway

Taken together, these three ASX energy stocks highlight the trade-offs income investors face. APA offers consistency and yield, Origin balances income with growth potential, and AGL provides upside but with greater uncertainty.

The post 3 top ASX energy stocks dividend investors should watch appeared first on The Motley Fool Australia.

More reading

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

The supermarket wars are heating up as Aldi has put into action changes with its strategy to combat recent price reductions implemented by Coles Group Ltd (ASX: COL) and Woolworths Group Ltd (ASX: WOW).

While Aldi has grown its national store count to more than 600 as of last year, the business only has 10.7% market share, according to reporting by the Australian Financial Review.

The German supermarket business recently started a delivery partnership with Doordash, opening up a new growth avenue for Aldi Australia, with this being its first online offering for shoppers to do their grocery shopping.

But, the business has more plans to tackle the major players of Coles and Woolworths.

Price cuts and range reductions

According to reporting by the Australian Financial Review, Aldi is reducing the number of branded goods that it sells in stores as well as cutting the price on hundreds of products as it looks to increase competition in the sector.

Woolworths and Coles have been cutting shelf prices following the boom in inflation sending up food prices.

Aldi is cutting the price on 300 products. The AFR quoted Aldi Australia boss Anna McGrath, who said:

We just reduced [prices of] another 300 products. We want to continue to drive those savings.

Over 90 per cent of our everyday range is our Aldi exclusive brands. That has not changed. We are the pioneers of low-cost grocery. We definitely want to focus on being an exclusive brand retailer.

The best value is when we offer the lowest prices. It is what we are good at…we can do that most successfully at our exclusive brands.

McGrath claimed that Aldi prices are 16.8% cheaper than similar items at Coles and Woolworths. Aldi is reportedly able to achieve higher profit margins on its own-brand items compared to items from other brands.

What positives can Coles and Woolworths take?

One of the advantages that the major Australian supermarkets can provide shoppers is the convenience of a larger store network and a much broader range of products. There are reportedly only 1,800 items at Aldi compared to approximately 25,000 at a typical Coles or Woolworths supermarket.

The AFR reported that one analyst – Craig Woolford from MST Marquee – said that Aldi could lose some shoppers it has gained from Woolworths and Coles in recent times if these plans lead to noticeably lower choice for consumers.

He said:

Aldi has a great reputation but if shoppers cannot get a handful of key brands they love, then they might not shop at Aldi.

Plus, e-commerce growth continues strongly at Coles and Woolworths, which is a key advantage for them because of the additional items consumers have access to. In the first quarter of FY26, Coles supermarkets grew e-commerce sales by 27.9% to $1.3 billion and Woolworths Australian supermarket e-commerce sales grew by 12.9% to $2.2 billion.

While Aldi is looking to turn up the heat, there may be enough room for all three to deliver growth.

The post How Aldi is planning to disrupt Woolworths and Coles appeared first on The Motley Fool Australia.

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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 no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Woolworths Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Turning $100,000 into $1 million at the drop of a hat is every investor’s dream. But it’s not as easy, quick or risk-free as you’d think. 

This type of growth usually requires years of patience, strong earnings growth, and a bit of luck. But here are two ASX shares with the scale and growth potential to make it happen.

WiseTech Global Ltd (ASX: WTC)

WiseTech provides logistics software to help improve global supply chains. The business already dominates the market, and it comes from a runway of a decade of mostly-consistent growth. 

Its share price climbed pretty consistently over this period too. Or at least, they did, until 2025. 

The ASX logistics software provider hit a couple of huge headwinds last year which sent the share price crashing.

It posted some disappointing financial results, suffered a boardroom fallout, and not to mention the AFP and ASIC raid on its Sydney office. Several consecutive events over a short period of time slashed investor confidence and they quickly offloaded their stock.

But it’s worth noting that despite the confidence crash, as a business, WiseTech is incredibly strong.The company is continually expanding operations and it has a proven track record of growth through various economic cycles and challenges.

WiseTech is well-positioned to benefit from long-term trends, including cloud computing, automation, and overall AI adoption. 

If it continues expanding at the same rate, its earnings could quickly compound and could see supersized returns.

The best part is, at just $50 a piece at the time of writing, the shares are super cheap right now. Some analysts think this could rocket up to $169.14 within the next 12 months. That’s a huge potential 238.52% upside for investors.

Xero Ltd (ASX: XRO)

Cloud cloud-based, accounting software company Xero has a subscription-based model which offers monthly plans at various price points. It means that its business model is “sticky” with a high retention rate. As a result, Xero is able to benefit from recurring revenue, global exposure and profitability. 

The ASX business is actively expanding the products it has on offer. In 2025 it rolled out new features like online bill payments and customisable pages to make its software more appealing to more small and medium-sized businesses.

It’s actively expanding its global presence too. Xero acquired Melio as part of its strategy to grow its US business. It expects that by integrating a US payments platform with its current accounting software, it will be able open up new revenue streams for the business and accelerate its presence in the US small-business market.

The ASX business is still early in its global expansion too. If it is able to crack the US market and become more dominant, while maintaining its position and revenue in other markets, its earnings could surge too.

Like WiseTech, Xero shares are a steal right now. They’re currently trading at $82.11 a piece and I’m quietly confident that the ASX shares could double in value in 2026, or go even higher.

The post 2 ASX shares that could turn $100,000 into $1 million appeared first on The Motley Fool Australia.

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Motley Fool contributor Samantha Menzies 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 WiseTech Global and Xero. The Motley Fool Australia has positions in and has recommended WiseTech Global and Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Reserve Bank of Australia may have lifted the cash rate to 3.85% this week, but that doesn’t automatically mean term deposits are the best place for income seekers.

Even with higher rates flowing through, many term deposits still struggle to compete with the dividend yields available on the share market. And unlike cash in the bank, dividend shares also offer the potential for capital growth over time.

With that in mind, here are three ASX dividend shares that analysts think could be worth considering instead of locking money away in a term deposit.

Cedar Woods Properties Ltd (ASX: CWP)

The first ASX dividend share to look at is Cedar Woods Properties.

It is one of Australia’s leading residential property developers, with a portfolio diversified across geographies, price points, and product types. This diversification helps smooth earnings across the property cycle.

Bell Potter is positive on the company’s outlook, highlighting that Cedar Woods is well positioned to benefit from Australia’s chronic housing shortage. With demand for new housing continuing to outstrip supply, the broker believes this should support earnings and dividends in the coming years.

Bell Potter is forecasting dividends of 35 cents per share in FY 2026 and 39 cents per share in FY 2027. Based on its current share price of $7.58, this implies dividend yields of 4.6% and 5.1%, respectively.

The broker has a buy rating and $10.00 price target on its shares.

Dexus Convenience Retail REIT (ASX: DXC)

Another ASX dividend share that stands out for analysts is Dexus Convenience Retail.

This REIT owns a nationwide portfolio of service stations and convenience retail sites that are leased to high-quality tenants under long-term, inflation-linked agreements. These leases provide predictable cash flows, which is exactly what income-focused investors typically look for.

The underlying assets are generally considered resilient. Demand for fuel, convenience goods, and essential services tends to hold up through economic cycles, while annual rental increases help protect income over time.

Bell Potter is bullish on the REIT, with a buy rating and a $3.45 price target on its shares. It expects dividends of 20.9 cents per share in FY 2026 and 21.6 cents per share in FY 2027. Based on its current share price of $2.68, that equates to dividend yields of 7.8% and 8%, respectively.

Sonic Healthcare Ltd (ASX: SHL)

A final ASX dividend share to consider according to analysts is Sonic Healthcare.

It is a global medical diagnostics company, operating laboratories and collection centres across Australia, Europe, and the United States. Its services are tied to healthcare demand rather than economic cycles, which can provide a degree of earnings resilience.

Bell Potter believes Sonic Healthcare is approaching a return to more consistent growth and thinks investors should be taking a closer look at its shares. The broker has a buy rating and a $33.30 price target on them.

In terms of income, Bell Potter is forecasting partially franked dividends of 109 cents per share in FY 2026 and 111 cents per share in FY 2027. Based on the current share price of $22.57, this implies dividend yields of 4.8% and 4.9%, respectively.

The post Forget term deposits and buy these ASX dividend shares appeared first on The Motley Fool Australia.

More reading

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

On Thursday, the S&P/ASX 200 Index (ASX: XJO) was out of form and tumbled into the red. The benchmark index fell 0.4% to 8,889.2 points.

Will the market be able to bounce back from this on Friday and end the week on a high? Here are five things to watch:

ASX 200 expected to fall again

The Australian share market looks set to fall on Friday following a poor night in the United States. According to the latest SPI futures, the ASX 200 is expected to open 71 points or 0.8% lower this morning. In late trade on Wall Street, the Dow Jones is down 1%, the S&P 500 is down 1.05%, and the Nasdaq is down 1.4%.

Oil prices sink

It could be a poor finish to the week for ASX 200 energy shares including Santos Ltd (ASX: STO) and Woodside Energy Group Ltd (ASX: WDS) after oil prices sank overnight. According to Bloomberg, the WTI crude oil price is down 3.1% to US$63.11 a barrel and the Brent crude oil price is down 3% to US$67.37 a barrel. This was driven by news that Iran and the US have agreed to talks, easing conflict concerns.

Rio Tinto-Glencore merger talks end

Rio Tinto Ltd (ASX: RIO) shares will be on watch on Friday after the mining giant abandoned merger talks with Glencore (LSE: GLEN). It stated: “Rio Tinto is no longer considering a possible merger or other business combination with Glencore plc, as Rio Tinto has determined that it could not reach an agreement that would deliver value to its shareholders.”

Gold price tumbles

ASX 200 gold shares Evolution Mining Ltd (ASX: EVN) and Newmont Corporation (ASX: NEM) could have a tough finish to the week after the gold price tumbled overnight. According to CNBC, the gold futures price is down 1.9% to US$4,856 an ounce. Gold and silver continued to fall after a short-lived rebound.

Hold Beach Energy shares

Beach Energy Ltd (ASX: BPT) shares are fully valued according to analysts at Bell Potter. This morning, in response to the energy producer’s half year results, the broker has retained its hold rating with a slightly improved price target of $1.15. It said: “BPT is in a production replacement cycle with respect to exploration and appraisal. Production growth should return in FY27 and capex ease, enabling positive free cash flow to support balance sheet deleveraging and ongoing dividends. We are positive on BPT’s exposure to Australian east coast gas markets (around half of sales volumes) and cautious with respect to global oil markets.”

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

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Motley Fool contributor James Mickleboro has positions in Woodside Energy 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.

In FY25, beauty retailer Adore Beauty Group Ltd (ASX: ABY) displayed a controlled approach to inventory management, but in an industry so influenced by fast-moving TikTok trends, can it stay ahead of the game – and is it a buy right now?

Fast-moving cycles pose a challenge in the sector

Social media, particularly TikTok, has proved a phenomenon for beauty retailers, moving consumers from discovery to purchase in record time. And while this can be a tailwind, it can also lead to short-term aggressive cycles that put pressure on retailers.

They must respond lightning fast to meet demand, making quick inventory decisions that can make or break. Understocking can lead to lost revenue and impact the retailer’s position in a customer’s consideration set. Overstocking can be a pathway to carrying costs, markdowns, and wastage.

Short-cycle social media trends can be hard to predict. They may be based around a specific beauty ingredient, a whole category, or focused on one individual brand, making stock decisions even more complex.

How has Adore Beauty responded so far?

A few years ago, Adore Beauty made investments in AI-driven supply chain management technology to better manage these cycles. That foresight may well have paid off, with the company reporting strong results in FY25, including:

• Record gross margin of 35.3%
• EBITDA of $8.1 million, up 67.8% on the prior corresponding period (PCP)
• Revenue of $198.8 million, up 1.6% on PCP
• New customer growth up 4.9%
• A cash balance of $12.7 million with no debt

In FY25, it also made a move into brick-and-mortar retail. This saw the opening of seven new retail stores, with a reported goal of opening more than 25 stores across its Adore Beauty and IKOU brands.

While many sectors are moving away from physical retail and its heavy cost base, in many ways, it makes sense for Adore Beauty. This play allows it to compete with prominent local beauty retailer Mecca and international powerhouse Sephora by offering similar interactive in-person experiences.

In the last year, Adore Beauty demonstrated that it could perform under these challenging conditions. But as TikTok continues to compress and intensify demand cycles, it will need to remain vigilant and maintain its firm commitment to robust inventory management.

Is Adore Beauty a buy?

Adore Beauty has been on a wild ride since it listed on the ASX in 2020 with an IPO price of $6.75. Over the last five years, its share price has fallen by over 80%.

That said, it has made positive progress recently, and if it executes on its ambitious retail strategy, it could see impressive gains over the next few years. With the company set to release H1 FY26 results on 24 February, it will be interesting to see if its upward trajectory has continued thus far.

It’s definitely one to watch in 2026. For investors with a higher risk tolerance, it may be worth considering now, as I believe it is undervalued at current prices.

The post From viral hit to margin threat: Is inventory a growing risk for Adore Beauty? appeared first on The Motley Fool Australia.

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