Tag: Stock pick

When a takeover bid collapses, investors usually see it as bad news. But in the case of AUB Group Ltd (ASX: AUB) and its failed takeover by private equity suitors, it may actually be good news of sorts.

Macquarie’s latest research suggests that it might finally be back to business for the insurance broker network.

A few days ago, AUB confirmed that EQT and CVC had terminated discussions regarding a potential takeover. The suitors decided not to proceed with a binding proposal to buy the company for $45 per share.

For shareholders who were eyeing that $45 payout, it’s a hard one to take because AUB Group shares are currently trading at $31.40 per share.

The analysts at Macquarie, however, certainly seem to see an opportunity here.

Back to business

In a research note released immediately following the news, Macquarie maintained an outperform rating on AUB Group, assigning a 12-month price target of $37.40 to the shares.

Macquarie’s message is simple: it’s “back to business”.

Even without a takeover premium, Macquarie believes the fundamentals of AUB are rock solid. They note that AUB is executing well across multiple earnings growth opportunities and the company has a history of delivering consistent organic growth, supplemented by smart acquisitions.

Why Macquarie is bullish

There are three main reasons Macquarie thinks the stock is a buy at today’s prices:

1. The Valuation Gap: AUB is currently trading at a forward price-to-earnings (P/E) ratio of roughly 15.6x. That is significantly cheaper than its historical average of 18.3x and cheaper than its recent average of 19.6x. In short, the stock looks like a bargain compared to its own history.
2. Broking Strength: Despite fears that insurance premium rates might soften, AUB continues to grow. In the Australian broking segment, average income per client actually increased by 8.4% recently. They are squeezing more value out of existing relationships.
3. The International Opportunity: The Tysers (International) business is the sleeping giant here. Current EBIT margins are around 25%, but AUB is targeting 32% over the medium term. If they hit that target, it implies significant earnings upside that Macquarie feels isn’t fully baked into the current share price.

Risks

There are still risks, however, to investing in AUB Group, and Macquarie points out that poor M&A execution remains a key risk. When growth relies partly on buying other companies, you have to buy the right ones at the right price and integrate them well into your business. Additionally, if the premium rate cycle turns faster than expected, it could put pressure on earnings.

Foolish bottom line

The AUB Group takeover deal is dead, but the business is very much alive. With a price target of $37.40, offering a potential upside of approximately 19% from the current price, Macquarie suggests that AUB Group represents a good investment opportunity for patient investors.

The post Does Macquarie rate AUB Group shares a buy after the deal fell through? appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• Why AUB, Titomic, Treasury Wine, and Woodside shares are rising today
• This insurance company is a compelling buy, despite a takeover falling through, analysts say
• Why ASX, AUB, Dyno Nobel, and HMC shares are sinking today
• AUB Group holds its AGM

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

Many of Australia’s top brokers have been busy adjusting their financial models and recommendations again. This has led to the release of a number of broker notes this week.

Three ASX shares that brokers have named as buys this week are listed below. Here’s why their analysts are feeling bullish on them right now:

Breville Group Ltd (ASX: BRG)

According to a note out of Macquarie, its analysts have retained their outperform rating and $39.20 price target on this appliance manufacturer’s shares. The broker highlights that the Macquarie Kitchen Benchmark and De’Longhi Revenue Index have delivered strong growth so far in the third quarter. And given how Breville has outperformed the benchmark by 11% per annum between 2018 and 2024, it believes this supports it forecast for 10%+ per annum revenue growth between FY 2025 and FY 2028. This is expected to be underpinned by its coffee segment, new market development, and its investment in new product development. The Breville share price is trading at $29.43 on Wednesday afternoon.

Collins Foods Ltd (ASX: CKF)

A note out of Citi reveals that its analysts have retained their buy rating on this KFC restaurant operator’s shares with a trimmed price target of $12.85. This follows the release of a half year result which came in ahead of expectations. In addition, Citi highlights that management has upgraded its profit guidance for the full year. It is now expecting profit growth of mid-to-high teens from low-to-mid teens previously. And while its sales growth rate is a touch behind expectations, the broker has only reduced its estimates by a touch. The Collins Foods share price is fetching $10.74 at the time of writing.

NextDC Ltd (ASX: NXT)

Analysts at Morgans have upgraded this data centre operator’s shares to a buy rating with a $19.00 price target. According to the note, the broker was pleased to see NextDC report new contract wins, which it believes includes a large single customer contract win across multiple locations. This has lifted its contracted utilisation by 71MW to 316MW, which is supportive of Morgans growth forecasts. In light of this and significant share price weakness over the past three months, the broker sees significant upside potential for investors between now and this time next year. The NextDC share price is trading at $13.55 on Wednesday.

The post Top brokers name 3 ASX shares to buy today appeared first on The Motley Fool Australia.

More reading

• Morgans just upgraded these ASX stocks to buy ratings (with huge upside!)
• Buy, hold, sell: Collins Foods, Imdex, Treasury Wine shares
• Why Block, Collins Foods, Perseus Mining, and Robex Resources shares are falling today
• Macquarie tips 28% upside for Breville shares
• ASX retail shares: 2 to buy and 1 to sell amid rising inflation

Citigroup is an advertising partner of Motley Fool Money. Motley Fool contributor James Mickleboro has positions in Collins Foods and Nextdc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. 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.

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

Both Microsoft (NASDAQ: MSFT) and Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) have a market cap of at least $3 trillion. But thanks to a recent surge, Alphabet is nearly a $4 trillion company. Still, these two are fairly close in size and may have investors wondering which stock is the better buy right now.

I think both have their merits, but one stands out as the better pick. 

Alphabet and Microsoft have two different base business models

Alphabet is the parent company of Google, along with several other brands, like YouTube, the Android operating system, and Waymo. It’s a fairly wide business, but when you boil it down, most of Alphabet’s revenue comes from advertising. In Q3 2025, Alphabet’s ad revenue totaled $74.2 billion, with total revenue coming in at $102.3 billion. When the economy and the consumer are fairly strong, advertising is a great business to be in. However, once companies start to fear that a recession is imminent, they quickly pull back their spending, harming companies like Alphabet.

Currently, advertising revenue is growing across the board, so Alphabet is enjoying strong growth. But that could flip at any moment, making its business a bit more precarious than Microsoft’s.

Microsoft has a sprawling business ranging from business productivity tools to cloud computing to gaming and computing hardware. Microsoft’s most important segments are those devoted to business and cloud computing, and these two segments accounted for $33 billion and $30.9 billion, respectively, of Microsoft’s $77.7 billion in revenue in Q1 of fiscal year 2026 (ended Sept. 30). These units may not see as strong growth if we enter a recession, but they are still more resilient than Alphabet’s. If you compare both companies’ growth rates over the past few years, it’s evident that Microsoft may not grow as fast as Alphabet, but its growth is far steadier.

MSFT Revenue (Quarterly YoY Growth) data by YCharts

This isn’t a knock against either company; it’s just the reality of the core business each is involved in. Right now, the most exciting business units for each company are their cloud computing operations. Cloud computing is seeing a huge spike in demand from artificial intelligence workloads, and each is delivering excellent results. In Q1 FY 2026, Microsoft Azure’s revenue rose 40% year over year. While Microsoft doesn’t break out how much revenue Azure actually generated, we know from previous announcements that Azure accounts for more than 50% of the Intelligent Cloud division’s revenue, which totaled $30.9 billion in Q1 FY 2026.

Google Cloud didn’t grow quite as fast in Q3 2025, with revenue rising 34% year over year, but it has made some major announcements recently. One key advantage of using Google Cloud is that it grants access to its tensor processing units (TPUs). These computing devices are an alternative to graphics processing units (GPUs) from Nvidia, and are much cheaper to run on at the cost of being less flexible. Alphabet made headlines recently when reports circulated that Meta Platforms could be purchasing TPUs from Alphabet instead of just running workloads via Google Cloud. That could open up a brand new revenue stream for Alphabet, giving it a potential leg up on Microsoft.

In terms of which business is better, it’s really more personal preference. Alphabet’s fastest-growing years will be better than Microsoft’s, but Microsoft will be steadier. However, with Alphabet potentially starting to sell its custom TPUs, I think it’s the better buy right now from a business perspective. But what about valuation?

Alphabet’s stock has soared in recent days

Alphabet’s stock has been on a monster run over the past few weeks, as Berkshire Hathaway announced a stake in Alphabet, and the news broke about Meta considering purchasing TPUs from Alphabet. This has caused Alphabet’s valuation to spike.

MSFT PE Ratio (Forward) data by YCharts

Alphabet now trades for 31 times forward earnings, which is slightly more expensive than Microsoft. However, analysts haven’t had time to model what selling TPUs could do for Alphabet’s profits, which is what the forward earnings metric relies on. As a result, Alphabet’s stock could be slightly cheaper than it appears, which I think makes it the better stock to buy right now.

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

The post Better $3 trillion AI stock to buy now: Microsoft or Alphabet 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.

More reading

• The ASX ETFs I’d buy for my kids or grandkids
• What are the 5 top artificial intelligence (AI) stocks to buy right now?
• Screaming buy? This ASX ETF has returned 54% a year since 2022
• Billionaire Peter Thiel just sold Nvidia and Tesla for these other two “Magnificent Seven” stocks
• Warren Buffett is buying artificial intelligence (AI) stocks while Michael Burry is shorting them — Who’s right?

Keithen Drury has positions in Alphabet, Meta Platforms, and Nvidia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Berkshire Hathaway, Meta Platforms, Microsoft, and Nvidia. 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, Berkshire Hathaway, 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.

Medical device company Saluda Medical Inc (ASX: SLD) is set to list on the ASX after raising $231 million in its initial public offer.

The company, founded in Sydney in 2010, describes itself as a “commercial stage” medical device company, “focused on developing treatments for chronic neurological conditions using its novel neuromodulation platform”.

The company explained further:

Saluda’s product, the FDA-approved Evoke® System, is designed to treat chronic neuropathic pain by providing SCS (spinal cord stimulation) therapy that senses and measures neural activation to optimise therapy and reduce patient and clinician burden. Unlike standard SCS devices, which only provide fixed levels of stimulation, Saluda’s system leverages evoked compound action potentials, or ECAPs, to measure the spinal cord’s response to electrical stimulation and adjust the stimulation accordingly to achieve and continuously maintain a targeted level of neural activation. This ensures the therapy remains at the patient specific prescribed level of neural activation, providing consistent and effective outcomes.

Better pain relief for patients

The company said clinical study results demonstrated “clinically superior” pain relief when tested against other methods, and Saluda would be seeking to gain a larger slice of the more than US$23 billion market for people suffering chronic pain in the US alone.

The company said in its prospectus that it had generated US$70.4 million in revenue in FY25, with that forecast to rise to US$81.9 million in the current financial year.

The company made a net loss of $123.5 million in FY25, which is expected to increase this year to $145.5 million.

To achieve its revenue growth targets, the company stated that it aims to increase the number of trained sales representatives in the US by more than 80% to 114 in the current financial year.

Saluda Chief Executive Barry Regan said the listing would be a catalyst for further growth for the company.

He said further:

Our IPO will mark an important milestone for Saluda Medical and the patients whose lives we aim to transform through objective, personalised neuromodulation. The strength of our clinical evidence, the scalability of our commercial model, and the dedication of our team positions the company well to continue to make a significant difference in our large, underpenetrated global market.

Saluda raised the new capital via the issue of Australian-listed chess depositary interests at $2.65 per share.

The company will be valued at approximately $775 million upon listing, which is scheduled for Friday, December 5. The raising was run by Bell Potter as joint lead manager, alongside Morgans, E&P, and CommSec.

The post New biotech company set to list after $231 million initial public offer appeared first on The Motley Fool Australia.

More reading

• Better $3 trillion AI stock to buy now: Microsoft or Alphabet
• After tanking 26% in a month should you buy Life360 shares now?
• Down 30% this year. Are Block shares finally a buy?
• Up 61% since April, 3 reasons to buy this ASX All Ords share today
• Here are billionaire Warren Buffett’s 5 biggest stock holdings

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

Life360 Inc (ASX: 360) shares are sliding today.

Shares in the S&P/ASX 200 Index (ASX: XJO) tech stock closed yesterday trading for $38.31. In early afternoon trade on Wednesday, shares are swapping hands for $37.54 apiece, down 2%.

For some context, the ASX 200 is up 0.1% at this same time.

Life360 shares have come under selling pressure since notching new all-time closing highs of $55.44 on 3 October. Over the past month, shares have fallen 26%.

Still, investors who bought the ASX share 12 months ago will be sitting on gains of 42% today. And early investors who bought the ASX tech share five years ago will have enjoyed an 871.8% share price rise, despite the recent sell-down.

Which brings us back to our headline question…

Are Life360 shares a good buy today?

Medallion Financial Group’s Stuart Bromley recently ran his slide rule over the ASX 200 tech share (courtesy of The Bull).

“Life360 is the leading family safety and location sharing platform across the US, UK and Australia,” Bromley said. “It operates a capital-light, highly scalable subscription model with growing ad partnerships.”

According to Bromley:

Despite recent share price weakness tied to investor concerns about its US$120 million acquisition of Nativo amid a rotation out of technology stocks into defensive companies, the business fundamentals of Life360 remain strong.

Revenue is growing at an impressive pace, subscriber numbers continue to accelerate, and management has upgraded full year guidance.

Indeed, at its third-quarter results (Q3 2025), the company reported a 34% year-on-year increase in revenue for the three months to US$124.5 million. On the bottom line, net profit of US$9.8 million was up more than 27% from Q3 2024.

Despite these strong metrics, Bromley isn’t quite ready to pull the buy trigger on Life360 shares just yet, issuing a hold recommendation.

“We view current share price levels as an attractive opportunity to at least hold or accumulate a quality growth business with a long runway ahead,” he concluded.

What’s happening with the ASX 200 tech share’s Nativo acquisition?

Life360 shares closed down 5.2% on 11 November, and tumbled another 13.1% the following day, with some investors selling the ASX share following news that the company had inked an agreement to acquire advertising technology company Nativo for US$120 million.

However, Life360 CEO Lauren Antonoff expects the acquisition to boost the company’s performance over time.

Commenting on the Nativo acquisition on the day, Antonoff said:

Acquiring Nativo is an exciting step forward as we build a durable, mission-aligned advertising business. This acquisition accelerates our roadmap, adding capabilities that typically take platforms years to develop.

It allows us to scale faster and bring high-quality, contextual advertising to market sooner, all while enhancing, not disrupting, the Life360 member experience.

The post After tanking 26% in a month should you buy Life360 shares now? appeared first on The Motley Fool Australia.

More reading

• Buy, hold, sell: Aristocrat, CBA, and Life360 shares
• After springing back to life, how far can this ASX 200 tech stock climb?
• ASX 200 tech shares fight back after 10 weeks of decline
• 3 ASX growth shares that could be future giants
• The Warren Buffett golden rule that investors can’t ignore

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 positions in and has recommended Life360. The Motley Fool Australia has positions in and has recommended Life360. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Block (ASX: XYZ) shares are in the red in Wednesday lunchtime trade. At the time of writing, the shares are down 6.6% are changing hands at $92.06 a piece. The stock has suffered a share price crash over the past month, dragging it down 18.39% for the period. Block shares are now 36.01% lower than this time last year.

What has happened to Block shares this year?

There has been no price-sensitive announcement out of the company recently to explain today’s share price decline. The downturn is likely a continuation of heavy selling, which followed the company’s September quarter results, released in early November.

The US-founded company, best known for providing payment-acquiring and related services to businesses, posted an 18% year-on-year profit increase for Q3. The company’s Cash App gross profit was up 24% and its Square gross profit was up 9%. 

The company also boosted its full-year 2025 guidance. Block is now forecasting US$10.243 billion in gross profit for 2025, up 15% from 2024.

While the results look impressive, its sales and earnings figures missed Wall Street’s forecasts. And while the company raised its forward guidance for annual gross profits, the improved target wasn’t enough to prevent investors from selling up.

Does the latest price crash make for a good buying opportunity?

Some analysts are concerned that the company has exposure to credit risk and could suffer as a result of volatility in consumer spending. 

But it’s important to note that Block’s core business is strong, and its Square business has continued to grow. 

Commenting on the company’s third-quarter results, CEO Jack Dorsey said:

Square GPV growth accelerated to 12% and we gained profitable market share through product innovation and expanded distribution. Cash App gross profit growth accelerated to 24%, and in September we hit 58 million Cash App monthly actives.

This quarter, I want to outline how Square will continue to take market share by being the best platform to help sellers grow, run, and automate their businesses.

Analysts are pretty bullish on Block shares, too. TradingView data shows 2 out of 3 analysts have a strong buy rating on the stock. The maximum target price is $267, which implies a massive potential 188.99% upside for investors at the time of writing. Even the minimum $105 target price represents a potential 13.64% upside for investors over the next 12 months.

The post Down 30% this year. Are Block shares finally a buy? appeared first on The Motley Fool Australia.

More reading

• Why Block, Collins Foods, Perseus Mining, and Robex Resources shares are falling today
• Here are the top 10 ASX 200 shares today
• Why is the Block share price crashing 14% on Friday?

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 Block. 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 All Ordinaries Index (ASX: XAO) is up 18.4% since the 7 April one-year closing lows, with this ASX All Ords share doing a lot of the heavy lifting.

The stock in question is LGI Ltd (ASX: LGI), which focuses on recovering biogas from landfills and converting it into renewable electricity.

In early afternoon trade on Wednesday, LGI shares are down 0.2%, trading for $4.17 apiece. This sees stock in the ASX All Ords share up 61% since plumbing its own one-year closing lows on 7 April.

The company’s shares have been buoyed by strong growth.

FY 2025 revenue was up 10% year on year to $33.9 million in FY25. And earnings before interest, taxes, depreciation and amortisation (EBITDA) increased by 14% to $17.4 million.

Commenting on the company’s performance and outlook at LGI’s annual general meeting (AGM) in November, Chairman Vik Bansal said:

LGI continues to grow signing six new contracts over the period, five of these contracts are for long-term landfill gas rights, which LGI will monetise to create Australian Carbon credit units. The remaining contract is for a Battery Energy Storage System (“BESS”) to be built, owned, and operated by LGI on the closed landfill at Belrose in Northern Sydney.

Should you buy this ASX All Ords share today?

The analysts at Canaccord Genuity recently reiterated their buy rating on LGI shares.

Citing three reasons to buy the ASX All Ords share, Canaccord said, “Well-supported new equity issuance, the pull-forward of a scheduled project and the unveiling of a new leg of growth have been the highlights of recent announcements by LGI.”

The broker added, “The impacts of these activities is most easily seen in our FY28 earnings estimates, which we increase materially.”

On LGI’s equity raise and project advancement, Canaccord said:

In October 2025, LGI raised $51m of new equity via an institutional placement and a further $5m from an oversubscribed SPP, at $3.85 per share. The funds will be used to bring forward development of the Nowra project (11MW), in particular which the company now projects to begin commissioning in FY27 (we previously had assumed FY29 for this asset).

As for the new leg of growth, Canaccord noted:

The main change to LGI’s base plan to reach 56MW was confirming the identity of 11MW previously described as “other projects” but now confirmed as Nowra generation capacity (3MW) and associated batteries (8MW), with the funding enabling accelerated development with commissioning targeted in FY27.

Additionally, LGI has reported an additional pipeline of more than 25MW of new projects, which would take the portfolio beyond 80MW of installed capacity.

Connecting the dots, Canaccord increased its price target on the ASX All Ords share to $4.80, up from the prior $4.30 a share.

That represents a potential upside of more than 15% for investors buying the ASX share at current levels.

The post Up 61% since April, 3 reasons to buy this ASX All Ords share today appeared first on The Motley Fool Australia.

More reading

• Morgans names ASX small-cap stock to buy after capital raise

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 recommended LGI Limited. 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.

Warren Buffett’s company, Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B), has consistently generated returns that far exceed those of the broader market over the six-plus decades that Buffett has led the company.

Between 1964 and 2024, Berkshire’s stock generated compound annual gains of 19.9% and a total return of 5,502,284%. Meanwhile, the S&P 500 index generated compound annual gains of 10.4%, including dividends, and a total return of 39,054%.

A major part of Berkshire’s success can be attributed to its massive $300 billion-plus equities portfolio. Berkshire invests the float it generates from premiums in its large insurance business into stocks that the company often likes to hold for many years, if not decades.

Buffett and Berkshire’s top five holdings

Needless to say, investors are always interested in what stocks the Oracle of Omaha and his team are investing in. Here then are Berkshire’s largest holdings at the end of the third quarter of the year, and the amount of the portfolio they represent:

1. Apple — 21%
2. American Express — 17.8%
3. Bank of America — 9.8%
4. Coca-Cola — 9.3%
5. Chevron — 5.9%

All of Berkshire’s top holdings are in world-renowned companies that have built sizable moats across various sectors. Berkshire first invested in Apple in 2016 and, at one point, had built the position to roughly 40% of Berkshire’s portfolio. Since then, however, Berkshire has sold a majority of its position, and I wouldn’t be surprised to see the large conglomerate exit Apple entirely over time.

Berkshire has owned American Express and Coca-Cola since the 1980s and 1990s, and these represent two of the company’s longest-held investments, likely hand-picked by Buffett.

Buffett and Berkshire used to own many traditional banks, but Bank of America is now one of the few remaining in the portfolio. Chevron is one of several energy stocks and assets that Berkshire owns. Buffett and his team appear to have a high level of long-term conviction in U.S. oil and gas, despite the sector’s recent struggles.

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

The post Here are billionaire Warren Buffett’s 5 biggest stock holdings 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.

More reading

• Buffett’s retirement imminent: Should you sell Berkshire Hathaway stock?
• What Warren Buffett’s farewell letter means for Berkshire Hathaway investors
• 1 reason now is a great time to buy Berkshire Hathaway stock
• Bill Gates just sold 2.4 million shares of Berkshire Hathaway — Should investors panic?
• Billionaire Warren Buffett sold 74% of Berkshire’s stake in Apple and has piled more than $4 billion into a “Magnificent” stock that’s up over 11,000% since its IPO

American Express is an advertising partner of Motley Fool Money. Bank of America is an advertising partner of Motley Fool Money. Bram Berkowitz 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 Apple, Berkshire Hathaway, and Chevron. The Motley Fool Australia has recommended Apple and Berkshire Hathaway. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Recently released figures for advertising spending show that the market continues to be tough, but that doesn’t mean money can’t be made by buying media shares.

In a research note sent to clients this week, the team at Macquarie have named their top pick in the media sector.

Even the companies Macquarie has a neutral rating on are changing hands below its price targets, meaning double-digit gains might still be on the table.

Ad spend weak in October

Macquarie said the Standard Media Index – a measure of Australian ad agency spending – showed that spending for October fell 15% compared to the same month last year, and across the first half of the year to date, spending was down 7%.

Spending in the out of home sector was down 6% for October, while free-to-air TV spending was 16% lower for the month.

Macquarie said further:

The ad market does not look to have seen the expected stabilisation during the December quarter, which generally makes up 27% of volumes. There is however some optimism into early-2026 for improvement, but without clear catalysts, noting: 1) Australia likely moving to a rate hike cycle and 2) booking visibility still short.

Macquarie said that media stocks generally underperformed when rates were rising, but it did name one company it expected to outperform, in oOh!media Ltd (ASX: OML).

For Nine Entertainment Co (ASX: NEC) and Seven West Media Ltd (ASX: SWM), the broker’s research team said they remained cautious with regard to free-to-air television advertising spending, “and the need to constantly manage costs to support earnings”.

Revenue set to increase

Positives for oOh!media included an increase in out of home spending of 9% year to date, despite the weakness in October.

Macquarie is predicting 6% year-on-year revenue growth for the company, “supported by positive 1Q26 feedback, although visibility is low, and an Australian rate hike cycle may impact growth”.

The Macquarie team have a price target of $1.45 on oOh!media shares, compared with $1.29 at the close on Tuesday.

With regard to Nine and Seven, Macquarie points out that the FTA TV market has been in structural decline for the past 10-plus years.

Looking at the fourth quarter of 2025, the expected stabilisation of total TV revenues (FTA + broadcast video on demand growth) across the industry does not seem likely as FTA declines (over 80% of volumes) continue to more than offset BVOD. During October 2025, we estimate that total volumes were down 9%-11% and November / December also looks challenging, with Nine recently commenting that ‘the total TV market remains soft and very short for the run into Christmas’.

Macquarie said for both Nine and Seven, “further cost initiatives will be paramount to protecting profitability”.

Despite not being bullish on the advertising market, Macquarie’s price targets for both shares are above current trading levels, with a target of $1.25 for Nine, against a price of $1.11 on Wednesday, and a price target of 16 cents for Seven, compared with 13.5 cents.

Seven is also currently undergoing a process to merge with Southern Cross Media Group Ltd (ASX: SXL), with the deal announced in late September.

The post Which three media companies could deliver double-digit returns? appeared first on The Motley Fool Australia.

More reading

• Time to buy? This ASX 200 media share hasn’t been this cheap in 5 years
• Are these 2 ASX 200 media stocks ready to rebound?
• Down 31% since August: This ASX All Ords media stock is tipped to rebound
• Nine Entertainment flags digital growth and more cost cuts in FY26 update
• Macquarie tips 45% upside for this ASX All Ords media stock

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

The 2025 selloff has punished plenty of ASX 200 shares, but some of the hardest-hit companies also happen to be among the highest quality on the market.

Short-term uncertainty, interest rate jitters, and tech volatility have dragged down a number of blue chip and top-tier growth names, even though their long-term outlooks remain as strong as ever.

For patient investors, this could have created a compelling opportunity to buy some of the best ASX shares out there at multi-year discounts.

CSL Ltd (ASX: CSL)

CSL is one of the highest-quality businesses ever to list on the ASX, yet its shares have sunk to some of their lowest valuation levels in over a decade.

This has been driven by concerns around US tariff risks, a slower-than-expected margin recovery at CSL Behring, and uncertainty surrounding the planned Seqirus demerger.

But the fundamental story has not changed. Plasma collection volumes continue to rise, CSL’s therapy pipeline remains deep, and the company is investing heavily in US manufacturing to mitigate any tariff impacts over the long term.

It is also worth noting that major brokers still have price targets far above current levels, with many believing the market has overreacted. One of those is UBS, which has a buy rating and $275.00 price target on its shares.

TechnologyOne Ltd (ASX: TNE)

TechnologyOne is one of the ASX 200’s most reliable compounders, delivering more than 10 consecutive years of record profits. Yet, the enterprise software provider’s shares have fallen materially from their highs, dragged down by a tech correction and recurring revenue growth that was strong but just not quite as strong as some were hoping.

Nevertheless, management remains very positive and once again reiterated its expectation for the business to double in size every five years. There are not many ASX shares out there that can boast that!

This could make now an opportune time to load up on this quality tech stock. Morgan Stanley thinks it would be a good idea. The broker recently upgraded its shares to an overweight rating with a $36.50 price target.

Xero Ltd (ASX: XRO)

Finally, Xero shares have dropped heavily from their 52-week high, despite the company delivering accelerating growth across multiple geographies.

Xero now generates NZ$2.7 billion in annualised monthly recurring revenue from 4.59 million subscribers. But if you thought that was close to peaking, think again. The company estimates that the global small-business market it serves is over 100 million businesses.

As a result, Xero’s growth runway remains enormous. So, for long-term investors, Xero at a multi-year discount could be a compelling opportunity to buy a global software leader well below fair value.

Macquarie recently put an outperform rating and $230.30 price target on the ASX 200 share.

The post 3 high-quality ASX 200 shares now trading at multi-year discounts appeared first on The Motley Fool Australia.

More reading

• 3 of the best ASX 200 shares to buy right now!
• Forget Zip shares: Here’s why Xero and WiseTech are better tech bets for 2026
• Brokers name 3 ASX dividend shares to buy in December
• Here’s the dividend forecast out to 2030 for CSL shares
• Where I’d invest $20,000 into ASX shares right now

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