Tag: Stock pick

In a recent report from Bell Potter, the broker shed light on the exciting ASX small-cap stock, Waratah Minerals Ltd (ASX: WTM). 

It has already surged almost 200% in 2025, and completed a $30 million capital raise back in August. 

The company is a NSW based, gold-copper exploration and development company. 

Its flagship project is its 100%-owned Spur goldcopper project, an advanced stage, pre-resource exploration project set in the East Lachlan region of New South Wales and located ~33km southwest of Orange. 

Why is it gaining momentum?

According to Bell Potter, Waratah Minerals’ flagship Spur project is showing early indications of delivering scale and grade.

Its strategy has been clear from the outset – targeting the margins of a fertile East Lachlan intrusive complex in search of
epithermal gold and porphyry goldcopper mineralisation.

Recent drilling has returned multiple zones of visible gold, fuelling the company’s growth and confidence in the Spur Project

According to Bell Potter, this exploration success shows clear potential for large scale mineralisation. These characteristics are supportive of rapid resource growth and low discovery costs.

The broker also believes the company is led by a management team and board that has a strong track record of value accretive discovery, resource development and divestment.

Nina Hendy, contributing columnist at Bell Potter, said its recent capital raise has drawn investor attention. There has been strong demand coming from existing and new Australian and North American institutional investors. 

This has bolstered the shareholder base and lifted shareholder value in a very short space of time. 

Recent drilling has returned multiple zones of visible gold, fuelling the company’s growth and confidence in the Spur Project. The company has multiple drill rigs on site, with exploration results expected to continue in the coming weeks and months.

How high could it rise?

In a report from Bell Potter in November, the broker said this ASX small-cap is well-funded. It also has a tight capital structure. 

The company (as at October 9) held $34m cash and no debt. Bell Potter believes this is sufficient for over two years of exploration at the current rate of expenditure. 

The team at Bell Potter initiated coverage in this ASX small-cap with a speculative buy recommendation. It also placed a price target of $0.95 on this ASX small-cap stock.

Waratah Minerals shares closed yesterday at $0.515 each. 

From this share price, the target from Bell Potter indicates more than 80% upside.

Elsewhere, TradingView also has a 12 month target price of $0.95.

Online brokerage platform Selfwealth lists the ASX small-cap stock as undervalued by 81%. 

The post Broker tips big upside for this ASX small-cap mining stock appeared first on The Motley Fool Australia.

More reading

• Michael Burry just sent a warning to artificial intelligence (AI) stocks. Should Nvidia investors be worried?
• These ASX innovators could be the market’s next big winners
• Is Warren Buffett sending a quiet warning to investors? Here’s what you need to know.
• 3 excellent ASX ETFs for investors who never want to pick stocks
• Here are the top 10 ASX 200 shares today

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.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Michael Burry is not your typical hedge fund manager. He did not go to business school, nor did he complete a traditional analyst program at an investment bank. Rather, Burry’s background is in medicine — completing an MD at Vanderbilt University and previously working as a neurology assistant at Stanford.

Burry eventually took to the capital markets and started his own investment firm. He is primarily known for being one of the few investors who predicted the subprime mortgage crisis back in 2008.

Fast forward to today, and Burry has a new short — artificial intelligence (AI). According to his fund’s latest 13F filing, Burry bought put options on semiconductor powerhouse and AI king Nvidia (NASDAQ: NVDA) last quarter.

Let’s delve into Burry’s beef with Nvidia and assess whether the acclaimed investor has just uncovered a bombshell revelation.

Why is Michael Burry shorting Nvidia?

Over the last three years, the S&P 500 and Nasdaq Composite have repeatedly notched new highs. Much of these gains can be attributed to an overwhelmingly bullish AI trade — with valuations among big tech soaring in lockstep with the broader market.

When it comes to Nvidia, however, Burry’s concerns revolve less around valuation and more around accounting — specifically, a concept known as depreciation.

Let’s say a company spends $1 billion on AI hardware, including GPUs, server racks, and networking equipment. If management expects the useful life of these assets to last five years, then the actual expense will be recognized ratably — depreciated — over that timeline. This means that on a company’s income statement, investors will see a depreciation charge for $200 million as opposed to the full $1 billion that was outlaid.

Nvidia is innovating at a record pace — releasing new GPU architectures approximately every 18 months. However, hyperscalers like Microsoft, Alphabet, Amazon, Oracle, and Meta Platforms — each of which are major Nvidia customers — are depreciating their AI infrastructure over a timeline that exceeds the actual useful life of these assets.

Burry is contesting that big tech is under-accounting their expense profiles and artificially inflating earnings. Nvidia is Burry’s primary target in the investigation, given the company’s efforts to quickly release new chips, which shorten the product life cycles of existing GPU architectures and render them obsolete after a couple of years at most.

In Burry’s eyes, Nvidia is giving way to a coordinated accounting fraud exercise among leading AI developers. 

Burry’s accounting concerns are legitimate, but is big tech really committing fraud?

Burry is correct in that big tech is depreciating its AI infrastructure over a longer horizon than these products actually last. However, labeling these practices as fraudulent is a bit hyperbolic.

First, public companies report their financial statements in compliance with generally accepted accounting principles (GAAP). While Burry’s claim that GAAP profits are overstated checks out, it’s important for investors to understand that metrics like earnings per share (EPS) do not fully reflect a company’s profitability.

Moreover, GAAP figures can be misleading as they are susceptible to noncash charges, such as depreciation.

Sometimes, it can be more helpful to analyze non-GAAP (adjusted) figures, such as free cash flow, to get an idea of a company’s ability to generate and sustain excess cash.

Moreover, many of the hyperscalers are audited by the Big Four accounting firms: PwC, EY, Deloitte, and KPMG. If tech companies were truly engaging in fraudulent accounting, a Big Four auditor would not sign off on the documentation that goes to the Securities and Exchange Commission (SEC). 

What’s next for Nvidia?

While I do think Burry has raised an interesting point, I do not see the accounting issue as a red flag.

Burry is subtly implying that big tech’s capital expenditures (capex) may not pay off in the long run. Should this prediction come to fruition, then he’s forecasting profit growth to decelerate, which could lead to a collapse in the AI trade.

In reality, big tech is already recognizing a return on its AI infrastructure investments. Among hyperscalers, revenue is consistently accelerating, gross margins are widening, and free cash flow is accumulating.

Against this backdrop, I think Burry is being a bit pedantic and pessimistic about the broader AI opportunity. As a long-term investor, I am far less concerned about profits next quarter than I am about a company’s profile decades from now — once AI has evolved into a more mature concept.

For these reasons, I am not worried about Nvidia’s growth prospects. The company’s backlog for new chips remains robust, and with new use cases emerging, I see Nvidia remaining an influential force in the AI realm for years to come.

As an investor in Nvidia, I remain optimistic about the company’s ability to generate strong revenue and profits well into the future and view the semiconductor leader as a core buy-and-hold position in my portfolio.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Michael Burry just sent a warning to artificial intelligence (AI) stocks. Should Nvidia investors be worried? appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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• What are the 5 top artificial intelligence (AI) stocks to buy right now?

Adam Spatacco has positions in Alphabet, Amazon, Meta Platforms, Microsoft, and Nvidia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Amazon, Meta Platforms, Microsoft, Nvidia, and Oracle. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has recommended Alphabet, Amazon, Meta Platforms, Microsoft, and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Australian share market has had its fair share of volatility this year, but one thing hasn’t changed.

That is that innovation still creates long-term value for investors.

So, with a number of innovators trading sharply lower than their highs, now could be an opportune time to snap up their shares. Here are three that analysts rate as buys:

Telix Pharmaceuticals Ltd (ASX: TLX)

Telix is rapidly becoming one of Australia’s most exciting biotechnology stories.

Its flagship product, Illuccix, which is a radiopharmaceutical imaging agent for prostate cancer, has seen explosive global uptake. The company is now generating strong revenue growth and reinvesting heavily into its pipeline of diagnostic and therapeutic cancer treatments.

With these products progressing through clinical trials, Telix has multiple shots on goal, and each one comes with transformative commercial potential. And while its failure to gain FDA approval at the first application has dented investor sentiment this year, most analysts believe it is a case of when and not if approval is given.

Bell Potter remains very positive and has put an buy rating and $23.00 price target on its shares.

Pro Medicus Ltd (ASX: PME)

Another ASX innovator that could be a buy is Pro Medicus. It is one of the ASX’s most impressive growth stories.

Pro Medicus’ Visage imaging platform is used by leading hospitals and radiology groups across the United States, providing ultra-fast image viewing and analysis for radiologists.

The company’s margins are exceptional, its revenue is highly recurring, and its contract wins are becoming larger and more frequent. Many medical centres are still in the early stages of moving to cloud-based imaging, which gives Pro Medicus a long runway of structural growth.

With a capital-light business model, expanding market share, and deep competitive moats, Pro Medicus is uniquely positioned to benefit from the global demand for faster, smarter, AI-assisted medical imaging.

Bell Potter is also bullish on this one and has a buy rating and $320.00 price target on its shares.

WiseTech Global Ltd (ASX: WTC)

A third ASX innovator to look at is WiseTech.

It is a software provider for global logistics companies, with its CargoWise platform deeply embedded into freight forwarding, customs, and shipping operations worldwide.

Despite recent share price weakness, WiseTech continues to grow revenue, integrate acquisitions, and win major enterprise customers. Global supply chains are becoming more digitised, and regulatory environments are getting more complex. This is a trend that strengthens the need for WiseTech’s mission-critical software and positions its for growth over the long term.

UBS is bullish on this ASX stock and has put a buy rating and $130.00 price target on its shares.

The post These ASX innovators could be the market’s next big winners appeared first on The Motley Fool Australia.

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

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

There are few names in the investing world that have as much of an impact as Warren Buffett, so when the stock market mogul speaks, it often pays to listen.

Some investors have noted that Buffett’s holding company, Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B), has been stockpiling cash in recent years. In fact, in the third quarter of 2025, the company’s cash holdings reached a record high of nearly $382 billion. That figure has ballooned over the last year, leading some investors to worry that Buffett is predicting a market crash.

Should investors exit the market now? Or is it safe to keep investing? Here’s what you need to know. 

Why is Buffett stockpiling cash right now?

On the surface, Berkshire’s significant cash holdings may seem to suggest that the market is overvalued. Some investors may take it a step further and assume that a serious market downturn is looming. But there are many reasons why a company may hold a substantial amount in cash.

BRK.B Cash and Short Term Investments (Quarterly) data by YCharts

The market as a whole has earned record-breaking returns over the last few years, and it’s not uncommon for investors to rebalance their portfolio or engage in some profit-taking by selling a portion of their shares at these high prices — leading to greater cash holdings.

At the same time, there’s a good chance that Berkshire is simply waiting for the right investment. Buffett has famously rigid standards when making investment decisions, so stockpiling cash likely has less to do with general market uncertainty and more to do with the fact that there are fewer appealing investment options available right now.

“The one problem with the investment business is that things don’t come along in an orderly fashion, and they never will,” Buffett noted in Berkshire’s 2025 annual meeting when asked about the company’s cash stockpile. “We’d spend $100 billion, and those decisions are not tough to make, if something is offered that makes sense to us and that we understand and offers good value.”

What does this mean for you?

Perhaps the biggest takeaway from Buffett’s investing strategy is to focus less on how the market will impact your portfolio and more on being choosy about where you buy.

There’s never a wrong time to invest in the stock market as long as you’re investing in the right places. If a company has solid fundamentals, offers value, and has room for growth, now can be a fantastic time to buy — no matter what the market does in the coming weeks or months. Those stocks are always out there; it’s just a matter of finding them.

This approach is more important now than ever. Many stocks may be overvalued at the moment, and sometimes, even weak companies can see their stock prices soar when the market is surging. Those investments may look appealing on paper, but if they don’t have healthy foundations, they’re likely to stumble hard during the next correction or bear market.

“[F]ears regarding the long-term prosperity of the nation’s many sound companies make no sense. These businesses will indeed suffer earnings hiccups, as they always have. But most major companies will be setting new profit records 5, 10 and 20 years from now.” — Warren Buffett, The New York Times, 2008

Strong companies will very likely bounce back from whatever the market throws at them, going on to experience long-term growth. The more of these stocks you own, the less you’ll need to worry about the next market downturn.

Berkshire Hathaway’s enormous cash pile may be worrying to investors concerned about a stock market crash, but Buffett himself is not sounding any alarms. Rather, his timeless advice to invest only in companies that provide value and have potential for long-term growth can make it easier to navigate these uncertain times. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Is Warren Buffett sending a quiet warning to investors? Here’s what you need to know. appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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

Not everyone enjoys researching stocks, comparing valuations, or tracking market announcements.

And the good news is you don’t have to.

Thanks to a handful of high-quality ETFs on the ASX, you can build a globally diversified portfolio in minutes, without picking a single stock.

If you want a simple, long-term investment strategy that essentially runs itself, these three ASX ETFs could be all you ever need.

BetaShares Diversified All Growth ETF (ASX: DHHF)

If there is one ETF built specifically for people who never want to think about asset allocation again, it is the BetaShares Diversified All Growth ETF.

This fund is a fully diversified, growth-focused portfolio wrapped into a single ETF. It spreads your money across over 8,000 stocks worldwide through underlying index exposures.

Inside the fund’s underlying holdings, you will find global giants like Apple (NASDAQ: AAPL), Microsoft (NASDAQ: MSFT), and Tesla (NASDAQ: TSLA), along with broad exposure to the Australian market and other developed economies. It is designed for long-term compounding, with no need to rebalance or manage the portfolio.

For investors who want a simple, set-and-forget strategy, this ASX ETF is about as close as it gets to a complete, all-in-one solution. It was recently recommended by analysts at Betashares.

iShares S&P 500 ETF (ASX: IVV)

For those wanting exposure to the world’s most influential share market, the iShares S&P 500 ETF is hard to beat. It tracks the S&P 500 Index, which includes the 500 largest and most dominant companies in the United States.

These include global powerhouses such as Nvidia (NASDAQ: NVDA), Alphabet (NASDAQ: GOOGL), and McDonald’s (NYSE: MCD). Together, they represent many of the world’s most profitable, innovative, and globally competitive corporations.

The S&P 500 has delivered strong long-term returns for decades. By simply holding this fund, investors automatically participate in the growth of world-leading stocks without ever needing to choose between them.

Vanguard MSCI Index International Shares ETF (ASX: VGS)

The Vanguard MSCI Index International Shares ETF gives you exposure to more than 1,200 international stocks across Europe, Asia, and North America, but excluding Australia. This means it offers deep diversification.

Its holdings include giants from a range of industries like Nestlé (SWX: NESN), Toyota Motor Corp (TYO: 7203), and ASML Holding (NASDAQ: ASML).

This broad global footprint helps smooth out volatility and ensures your portfolio isn’t overly concentrated in a single market. Overall, it could be a great long term option for investors that don’t want to pick stocks.

The post 3 excellent ASX ETFs for investors who never want to pick stocks 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 positions in and has recommended ASML, Alphabet, Apple, Microsoft, Nvidia, Tesla, and iShares S&P 500 ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Nestlé and has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has recommended ASML, Alphabet, Apple, Microsoft, Nvidia, Vanguard Msci Index International Shares ETF, and iShares S&P 500 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Here are the top 10 ASX 200 shares today appeared first on The Motley Fool Australia.

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

They’re two of Australia’s big 4 major banks and they’ve both enjoyed periods of great growth over the past 12 months. But when it comes to Commonwealth Bank of Australia (ASX: CBA) and Westpac Banking Corporation (ASX: WBC) and their shares, one is expected to outpace the other over the next 12 months.

Are CBA shares a buy for 2026?

CBA shares are trading in the green on Wednesday afternoon. At the time of writing, the shares are 0.21% higher for the day at $152.56 a piece. But over the past month, the shares have tumbled 13.09%, dragging the price 3.31% lower than this time last year.

The share price crash in early-November followed the banking giant’s quarterly update. The bank reported a 1% increase in its quarterly cash net profit after tax and a strong CET1 ratio of 11.8%, above regulatory requirements. But the results disappointed investors and raised concerns about the bank’s premium share price valuation. Investors started hitting the sell button in panic in what I think signalled the beginning of the bank’s share price correction.

Analysts also seem to think the share price still looks expensive at current levels, with many expecting the stock’s value to shrink further in 2026. 

This month, Medallion Financial Group’s Stuart Bromley confirmed his sell recommendation on Australia’s biggest bank (courtesy of The Bull). He said that while CBA remains a solid business, the share price is too high. He pointed out that the bank is trading on a price-earnings (P/E) ratio of about 25 times and a modest dividend yield of about 3.15%. This means its valuation sits well above global peers.

Many other analysts seem to hold a similar view on the shares. Data shows that out of 15 analysts, 10 have a strong sell rating on CBA shares and another 3 have a sell rating. Some expect the bank’s share price to drop as low as $96.07, which implies a huge potential downside of 37% over the next 12 months.

Are Westpac shares a buy for 2026?

Westpac shares are also trading in the green at the time of writing, up 0.42% for the day at $37.28 each. Over the past month, Westpac shares have dropped 6.4%, but they’re still 10.89% higher over the year.

Like CBA shares, Westpac stock also tumbled after the bank released an unexciting  FY25 result in early November, however, the drop wasn’t anywhere near as dramatic. The bank’s  net profit after tax dropped 1% over the year. And after excluding notable items, net profit reduced by 2% year over year. But the bank hiked its full-year dividend to $1.53 per share, representing an increase of 2 cents per share.

I’m not sure now is the best time to buy Westpac shares, but I think 2026 will be a flat year for the banking giant, rather than a year marked by a significant share price drop. 

Analysts are also unsure about the stock. Out of 16 analysts, data shows 7 have a hold rating on Westpac shares. Another 4 have a sell rating and 5 have a strong sell rating. The average target price of $33.34 implies a potential 10.5% downside over the next 12 months. The lowest target price of $23.03, implies a potential downside of 38.2% at the time of writing. 

It’s not exactly positive news but when compared to CBA’s outlook, Westpac’s share price projection into 2026 is a little less… pessimistic.

The post Westpac versus CBA shares: Which bank is a better buy for 2026? 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 no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

If you are on the lookout for ASX stocks to buy, then read on.

That’s because analysts at Morgans have just upgraded these names to buy ratings with big return potential. Here’s why it is bullish on them:

Minerals 260 Ltd (ASX: MI6)

This gold developer’s shares could be in the buy zone according to Morgans following the release of the highly anticipated mineral resources estimate (MRE) update for its Bullabulling Gold Project.

The broker believes the MRE positions Bullabulling to become a ~200,000 ounces per annum operation over ~15 years.

In response, the broker has upgraded Minerals 260’s shares to a buy rating with a vastly improved price target of $1.10. This implies potential upside of 180% from current levels.

Commenting on the gold explorer, Morgans said:

MI6 has released the highly anticipated MRE update for its flagship Bullabulling Gold Project. Bullabulling now hosts 130Mt at 1.0g/t Au for 4.5Moz, a material beat on our prior upside case of 3.5Moz. Importantly, a high degree of the resource (3Moz or 67%) remains in the ‘indicated’ category and underpins our updated forecasts and future pre-feasibility studies (PFS) – due mid CY26.

Given the updated scale, we now see clear line-of-sight to a ~200kozpa operation over ~15 years (previously 160–170kozpa), which we model via a staged mill expansion from 5Mtpa to 7Mtpa. Bullabulling now positions MI6 as the largest single-asset, undeveloped gold resource in Australia outside the established producer cohort, and we view it as a must-own stock. We upgrade our rating to BUY (from SPECULATIVE BUY) and increase our price target to A$1.10ps (previously A$0.55ps).

NextDC Ltd (ASX: NXT)

Another ASX stock that Morgans has become bullish on is data centre operator NextDC.

In response to new contract wins and recent share price weakness, the broker has upgraded the company’s shares to a buy rating with a $19.00 price target. This suggests that upside of more than 40% is possible from current levels. It said:

NXT has announced that following recent customer contract wins, presumably including a large single customer contract win across multiple locations, its contracted utilisation has increased by 71MW to 316MW as at 1 December 2025. Further contract wins were, and remain in, our forecasts so this mostly underpins our expectations.

However, we upgrade our capex assumptions and lift our FY27/28 EBITDA forecasts by 5%. Our target price remains $19 per share. The share price has declined ~19% in the last three months and given a ~40% differential between the current share price and our $19 target price we upgrade our recommendation to BUY from ACCUMULATE.

The post Morgans just upgraded these ASX stocks to buy ratings (with huge upside!) appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Nextdc. 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.

Investors buying the Vanguard Australian Shares High Yield ETF (ASX: VHY) probably do so with the expectation of fat, and franked, dividends.

After all, it’s all in the name of this exchange-traded fund (ETF). Like most ASX ETFs, VHY holds an underlying portfolio of ASX shares. In this case, those shares number about 75, and are selected based on their past dividend performance, as well as their perceived ability to sustain those shareholder payments.

Some of this ASX ETF’s current top holdings include Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), BHP Group Ltd (ASX: BHP), and Telstra Group Ltd (ASX: TLS).

With most blue-chip ASX dividend shares offering yields of between 3% and 5% today, you would expect this ETF to offer something similar.

But what might surprise investors is that VHY units are today trading on a trailing dividend yield of almost 9%.

Want proof? Well, VHY has paid out four dividend distributions over 2025, as is its norm. Those dividends, paid out in January, April, July, and October of this year, were worth $1.04, $2.43, $2, and $1.10 per unit, respectively.

Plugging that annual total of $6.57 per unit into the current VHY unit price of $77.24 (at the time of writing), we get a trailing yield of 8.97%.

That’s more than double what most blue-chip ASX 200 stocks currently have on the table.

So does this make VHY a screaming buy for dividends today?

Well, before investors rush off to buy this ASX ETF for that high income potential, let’s discuss a major caveat.

Is the VHY ETF a buy for that 9% dividend yield?

There are two ways an ETF can pay dividend distributions to its investors. The first is by passing through the dividend income it receives from its underlying portfolio. That has almost certainly funded part of VHY’s monstrous 2025 payout. But given the yields available on most major blue-chip shares right now that we discussed above, it’s also almost certainly not the only source of this income.

The other way ETFs fund dividend distributions is by ‘rebalancing’ their portfolios and distributing any resulting profits. Like most ETFs, VHY’s underlying index has rules that it operates under. According to Vanguard, these include “restricting the proportion invested in any one industry to 40% of the total ETF and 10% for any one company”.

Adhering to these rules has likely resulted in the outsized dividends investors have enjoyed over 2025. Whilst this has been wonderful for existing investors, it also indicates that this is a one-off bonanza for 2025, not an indication of an ongoing trend.

We can see evidence of this in VHY’s past paouts. Although 2025 resulted in investors bagging $6.57 per unit in dividend distributions, 2024 saw investors receive a total of $3.98 in dividend distributions per share. In 2023, the total was just $3.43.

Instead of that 8.97% yield, those payouts would result in yields of 5.43% and 4.68% at today’s pricing. Those are clearly still hefty yields, but nothing close to 9%. That once again reiterates that 2025’s dividend distributions look like a lucky windfall more than anything else.

So yes, the near-9% yield on the Vanguard Australian Shares High Yield ETF is accurate. But it certainly doesn’t indicate that investors will actually get 9% on their money if they buy units today.

The post Does the Vanguard High Yield ETF (VHY) really have a 9% dividend yield right now? appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen 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 Telstra Group. The Motley Fool Australia has recommended BHP Group and Vanguard Australian Shares High Yield ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

A new month is here and what better time to make some new additions to an investment portfolio.

But which ASX shares should you buy?

To narrow things down, let’s see how Morgans rates the three popular shares named below. Here’s what the broker is saying:

Collins Foods Ltd (ASX: CKF)

Morgans was pleased with this quick service restaurant operator’s performance during the first half.

It notes that its profits were a strong beat thanks to strong execution and a lower-than-expected depreciation charge and tax rate.

In response to its results, the broker has retained its accumulate rating with an improved price target of $12.40. It said:

CKF’s 1H26 NPAT was 12% higher than forecast and 30% up yoy. The strong headline beat was partly a function of solid operational execution and a return to positive LFL sales growth, but was significantly boosted by a lower-than-expected depreciation charge and tax rate. EBITDA was up 11% and 1% higher than forecast.

The value proposition inherent in the KFC brand has allowed it to outperform peers in a competitive and challenging QSR market in Australia and continental Europe. 1H26 margins improved, although we anticipate some downward pressure in Australia in the second half as commodity price inflation resumes. CKF upgraded its full year guidance. We have increased our NPAT estimates by 3% in each of the next three forecast years and our target price rises by 1% to $12.40.

Imdex Ltd (ASX: IMD)

This mining technology company has caught the eye of Morgans after announcing a couple of acquisitions.

And while it notes that these acquisitions may lead to earnings per share downgrades, the broker urges investors to not focus on this and instead to focus on the strength of the base business.

As a result, it has reaffirmed its accumulate rating with a $3.70 price target. It said:

The acquisition of two predominantly sensors businesses, in our view, is preferred against acquiring purely software businesses. IMD has paid a full price for ALT and MSI (~15x CY24 EBITDA), though with 55-60% exposed to mining exploration, both should be seeing substantial growth. Perhaps more importantly, IMD has now cleansed P&L costs below EBITDA which will likely trigger EPS downgrades. However, this disregards the strength of the base business, for which volumes have sequentially improved through 2Q, notwithstanding usual seasonal softness.

We cut our EPS forecasts by 5% in FY26 as we incorporate ALT and MSI and higher D&A, interest and tax. We also fully consolidate Datarock and Krux. In FY27 and FY28, cuts to our forecasts are marginal (1-2%) as we increase our revenue growth assumption in FY27 from +7% to +10%. Target price to $3.70 (from $3.80). Accumulate

Treasury Wine Estates Ltd (ASX: TWE)

This wine giant released an update this week which revealed that it was impairing the goodwill of its US assets.

While it was disappointed by this, it wasn’t overly surprised. In light of this, it has retained its hold rating and $6.10 price target and eagerly awaits a trading update later this month. It said:

TWE has announced that it expects to recognise a non-cash impairment of at least all the goodwill of its US based assets (A$697.4m). While this is disappointing, it isn’t a complete surprise given the company has new CEO and the US market remains challenging, in fact, category trends have deteriorated further. A further update on trading will be provided in mid-December.

We suspect that trading has been weaker than expected and wouldn’t be surprised if consensus is too high. The 1H26 result will be particularly weak. We have made large revisions to our forecasts and stress that earnings uncertainty remains high. Consequently, we maintain a HOLD rating.

The post Buy, hold, sell: Collins Foods, Imdex, Treasury Wine shares appeared first on The Motley Fool Australia.

More reading

• Top brokers name 3 ASX shares to buy today
• Why Block, Collins Foods, Perseus Mining, and Robex Resources shares are falling today
• Macquarie names best and worst ASX stocks to buy in a rising interest rate environment
• Why AUB, Titomic, Treasury Wine, and Woodside shares are rising today
• Why Catapult, Collins Foods, Guzman Y Gomez, and Pantoro shares are falling today

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