Tag: Stock pick

Markets have been choppy lately, with investors nervous about talk of an emerging AI bubble.

When volatility spikes like this, it is easy to worry about whether a bigger downturn is coming next. But for long-term investors, the most important thing isn’t predicting the next crash, it is having a clear plan ready for when it inevitably happens.

History shows that the Australian share market has always recovered from every correction, crisis, and crash to reach new highs. The investors who come out on top aren’t the ones who panic at the bottom, but the ones who stay calm, stay rational, and use the moment to buy quality ASX shares at far better prices.

Here’s how I plan to approach the next significant downturn.

Staying focused when the noise gets loud

The first part of my strategy is to ignore the emotional noise that surrounds a crash. When markets fall sharply, the headlines turn dramatic and it can feel like the rules of investing have changed overnight. But the long-term trend of the market has never changed. Every slump has been followed by a recovery, and the strongest ASX share gains often occur when fear is at its peak.

During a crash, my goal is not to react to short-term panic but to zoom out, keep perspective, and remind myself that volatility is the cost of being a long-term investor.

Buy the highest-quality ASX shares

A downturn is the best time to upgrade the quality of your portfolio. Rather than speculating on risky ideas, I would use a market selloff to buy outstanding businesses that rarely trade at attractive prices.

If the ASX fell sharply, I would be looking closely at shares such as ResMed Inc. (ASX: RMD), Goodman Group (ASX: GMG), Macquarie Group Ltd (ASX: MQG), and Life360 Inc. (ASX: 360). These companies have strong competitive advantages, solid balance sheets, and long growth runways that extend well beyond whatever short-term issues are causing the crash.

ResMed remains a global leader in sleep apnoea treatment with a market measured in hundreds of millions of patients. Goodman continues to benefit from demand for logistics hubs and data centres. Macquarie has proven its ability to thrive in volatile markets thanks to its diversified global earnings base. And Life360 has become one of the most widely used family technology platforms in the world with rapid subscription growth.

If their prices fell materially in a downturn, I would be eager to add them to my holdings.

Looking internationally

If the selloff extended beyond Australia and global markets also fell, I would turn my attention to international ETFs.

Three stand outs for long-term buying are the BetaShares Nasdaq 100 ETF (ASX: NDQ), the iShares S&P 500 ETF (ASX: IVV), and the BetaShares Asia Technology Tigers ETF (ASX: ASIA).

The BetaShares Nasdaq 100 ETF provides exposure to America’s biggest technology innovators, the iShares S&P 500 ETF offers access to the world’s top 500 companies, and the BetaShares Asia Technology Tigers ETF taps into the fast-growing tech giants of Asia.

If global markets experienced a major shock, these ETFs would provide diversified exposure to world-

Foolish takeaway

Market crashes feel uncomfortable, but they are also when the best long-term opportunities appear. My plan is to stay calm, ignore the noise, and use the volatility to buy high-quality ASX shares and ETFs at a discount.

The post My plan of attack for the next share market crash appeared first on The Motley Fool Australia.

More reading

• Up 65% this year: Are Charter Hall Group shares still a buy?
• Why are ASX 200 tech stocks getting smashed on Friday?
• Does Macquarie rate a2 Milk shares a buy, hold, or sell?
• What is Bell Potter’s view on REITs?
• 3 fantastic ASX ETFs to build long-term wealth

Motley Fool contributor James Mickleboro has positions in BetaShares Nasdaq 100 ETF, Betashares Capital – Asia Technology Tigers Etf, Goodman Group, Life360, and ResMed. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended BetaShares Nasdaq 100 ETF, Goodman Group, Life360, Macquarie Group, ResMed, and iShares S&P 500 ETF. The Motley Fool Australia has positions in and has recommended BetaShares Nasdaq 100 ETF, Life360, Macquarie Group, and ResMed. The Motley Fool Australia has recommended Goodman Group 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.

More reading

• Moody’s upgrades Bendigo and Adelaide Bank credit rating: what investors need to know
• Genesis Minerals signs key rail deals to unlock Tower Hill mine
• 3 ASX 200 stocks storming higher in this week’s sinking market
• Brokers name 3 ASX shares to buy today
• Why Gentrack, Kogan, Webjet, and WiseTech shares are pushing higher today

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 Catapult Sports, HMC Capital, and WiseTech Global. The Motley Fool Australia has positions in and has recommended Catapult Sports and WiseTech Global. The Motley Fool Australia has recommended Gqg Partners and HMC Capital. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Bendigo and Adelaide Bank Ltd (ASX: BEN) is in focus today after Moody’s upgraded the bank’s long-term issuer credit rating, reflecting strong asset quality and a robust funding profile.

What did Bendigo and Adelaide Bank report?

• Moody’s upgraded BEN’s long-term issuer credit rating to A3 from Baa1
• Baseline Credit Assessment improved to a3 from baa1
• Subordinated debt rating also lifted to Baa1 from Baa2
• Short-term rating remains at P-2
• Credit outlook moved to ‘Stable’ from ‘Positive’

What else do investors need to know?

Moody’s cited “very strong asset quality, very strong funding profile and strong liquidity” as reasons for the upgrade. The announcement signals confidence in Bendigo and Adelaide Bank’s balance sheet strength and risk settings.

These changes are effective immediately and could help the bank with funding costs and market confidence. Investors may watch for any flow-on impacts to the bank’s future borrowing and operational flexibility.

What’s next for Bendigo and Adelaide Bank?

Looking ahead, management will likely focus on maintaining asset quality and liquidity, aiming to further strengthen the bank’s market position. Investors may also pay attention to how the credit rating upgrade affects BEN’s cost of capital and strategic initiatives.

Continuous improvement in risk management and a stable funding environment could support the bank’s long-term growth and sustainability.

Bendigo and Adelaide Bank share price snapshot

Over the past 12 months, Bendigo and Adelaide Bank shares have declined 19%, trailing the S&P/ASX 200 Index (ASX: XJO) which has risen 1% over the same period.

View Original Announcement

The post Moody’s upgrades Bendigo and Adelaide Bank credit rating: what investors need to know appeared first on The Motley Fool Australia.

More reading

• Genesis Minerals signs key rail deals to unlock Tower Hill mine
• Reece 1Q FY26: Revenue growth, profit margin pressures, and a $365m buyback
• Sims holds AGM following a strong FY25 earnings report
• Lovisa holds AGM; provides a positive trading update
• 3 ASX 200 shares that could be top buys for growth

Motley Fool contributor Laura Stewart 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 Bendigo And Adelaide Bank. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial summary of the company announcement. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.

The Genesis Minerals Ltd (ASX: GEM) share price is in focus today as the company announced it has signed important rail agreements paving the way for development of the Tower Hill open pit gold mine, which holds a 1 million ounce Reserve and is targeting mine development by FY27.

What did Genesis Minerals report?

• Binding agreements signed with Public Transport Authority, Arc Infrastructure, and Aurizon to shorten Leonora rail line for Tower Hill development
• Tower Hill Reserve of 1Moz at 2g/t, with an operating strip ratio of 9:1 (waste:ore)
• FY26 rail project costs expected to total approximately A$27 million
• Total cash and non-cash consideration for rail shortening expected at ~A$80 million, funded through cash flow and reserves
• Market capitalisation at A$7.53 billion (share price A$6.28); cash and equivalents A$363 million; bank debt A$100 million (as at 30 September)

What else do investors need to know?

The shortening of the Leonora rail line is a significant milestone for Genesis, unlocking vital space for the expansion of the Leonora mill and enabling the full development of the Tower Hill open pit. The new rail agreements will also see construction of a replacement terminal southeast of Leonora, reducing rail and heavy vehicle traffic through town and improving safety for the community.

Extensive drilling at Tower Hill has revealed multiple high-grade intercepts (over 200 gram-metres), and while the deposit has only been drilled to about 450 metres deep, an underground transition study is currently underway. Planning is advancing for early mine site works and infrastructure, with further updates expected in Genesis’ long-term plan due by June 2026.

What did Genesis Minerals management say?

Raleigh Finlayson, Managing Director said:

These agreements will deliver immense benefits for all stakeholders. They are a testament to what can be achieved through strong partnerships and a shared vision… This will deliver significant benefits not only for Genesis with Tower Hill but also for the Leonora community. These include reducing heavy vehicle movements through the town, improving safety and helping to unlock the town centre. Earlier construction of the new rail terminal and resultant shortening of the railway line also opens up opportunities for an optimised, lower capital cost Leonora mill expansion project to be fast tracked in line with the timing of Tower Hill.

What’s next for Genesis Minerals?

Genesis plans to keep Tower Hill development progressing, with first ore targeted for FY28 and Stage 2 of mining expected about two years after Stage 1. The company is managing project costs through operating cash flows and reserves, while the earlier completion of the rail terminal could bring opportunities for optimising and accelerating the Leonora mill expansion.

Operational readiness activities are well underway, including environmental management, road and infrastructure planning, and early site establishment. The company will provide further details in its upcoming updated long-term plan due in mid-2026.

Genesis Minerals share price snapshot

Over the past 12 months, the Genesis Minerals share price has risen 148%, outperforming the S&P/ASX 200 Index (ASX: XJO) which has risen 1% over the same period.

View Original Announcement

The post Genesis Minerals signs key rail deals to unlock Tower Hill mine appeared first on The Motley Fool Australia.

More reading

• Moody’s upgrades Bendigo and Adelaide Bank credit rating: what investors need to know
• Reece 1Q FY26: Revenue growth, profit margin pressures, and a $365m buyback
• Sims holds AGM following a strong FY25 earnings report
• Lovisa holds AGM; provides a positive trading update
• 3 ASX 200 shares that could be top buys for growth

Motley Fool contributor Laura Stewart 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 prepared with the assistance of Large Language Model (LLM) tools for the initial summary of the company announcement. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.

I am, unfortunately (or perhaps fortunately, depending on your outlook), a long way off retirement, or at least the traditional retirement age. However, I am hoping that by investing in ASX dividend stocks, I can bring that date closer.

One of the stocks I am using for this endeavour is the Vanguard Australian Shares Index ETF (ASX: VAS). I view this index fund as a valuable investment that will help me achieve an early retirement. But also as a safety net for my income once I have put away the writer’s pen for good.

This exchange-traded fund (ETF) is structured in a way that gives me confidence that it will perform both of these functions admirably.

How? Well, unlike most dividend stocks, this index fund is designed to ensure my capital is always invested in the best and most successful businesses on our stock market. Like most index funds, the Vanguard Australian Shares ETF tracks an underlying index that is weighted by market capitalisation.

In its case, the index that it tracks, the ASX 300, holds the largest 300 stocks listed on our share market at any given time. That’s everything from Commonwealth Bank of Australia (ASX: CBA) and Telstra Group Ltd (ASX: TLS) to JB Hi-Fi Ltd (ASX: JBH) and Ampol Ltd (ASX: ALD).

VAS has the ability to pass on any dividends received from this collection of Australian shares as well. This does vary from year to year. And from quarter to quarter. Its four most recent payouts give this index fund a decent trailing yield of about 3.3% (at current pricing).

An ASX dividend stock to hold for decades

However, the largest 300 stocks aren’t static. Share prices, and thus the valuations of public Australian companies, change daily while the market is open. One day, Westpac Banking Corp (ASX: WBC) might be more valuable than National Australia Bank Ltd (ASX: NAB). The next day, investors might decide that NAB is worthy of a higher market cap.

To reflect these changes and ensure that the index fund always reflects the current state of affairs, the Vanguard  Australian Shares ETF readjusts its holdings every three months. This is what’s known as a ‘rebalancing’. As such, the more successful companies are added over time. The ones that fall out of favour with the market are pruned. Some are even given the boot entirely and replaced with a new up-and-comer. This all occurs without the investor, myself, having to lift a finger or expend any mental energy whatsoever.

The nature of this index fund means that VAS will consistently deliver the ‘average’ return of the sharemarket to my portfolio. Whatever that may be. Historically, this has come in at around 9.4% per annum.

By holding onto this fund, I am confident that it will continue to build my wealth and ensure a comfortable retirement when the time comes.

The post This 3.3% ASX dividend stock is my retirement safety net appeared first on The Motley Fool Australia.

More reading

• 3 ASX ETFs every beginner investor should know about
• What type of ASX stock has become a ‘mainstay’ of Aussie portfolios?
• The Vanguard Australian Shares ETF (VAS) now has its first real ASX rival
• The 3-ETF portfolio that could last a lifetime
• How to make your first $10,000 in the ASX share market

Motley Fool contributor Sebastian Bowen has positions in National Australia Bank and Vanguard Australian Shares Index ETF. 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 has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Gaming is a booming business. Aristocrat Leisure Ltd (ASX: ALL) and Light & Wonder Inc (ASX: LNW) shares both benefit significantly from continued growth, particularly in the US casino industry.  

In the past month, Aristocrat’s share price gained over 9%, while rival Light & Wonder went 24% higher.

Bright long-term outlook

Macquarie Group Ltd (ASX: MQG) just released its report on North America iGaming revenue trends. The broker reports that gaming revenues in the US & Canada were around US$3.3 billion in the September quarter, 30% higher than in the same quarter the year before.

Analysts of the broker paint an even brighter long-term outlook:

We expect North American iGaming volumes to exceed US$18bn by 2030 without assuming any new jurisdictional openings, which is a +80% uplift from 2024 (US$10.1bn).

Duopoly in slot machines

Light & Wonder and Aristocrat Leisure have a duopoly in the slot machine sector. As a result, they are well-positioned to take advantage of the growing US market.

Aristocrat, which has a market value of $36 billion, is a global leader in the poker machine field. Light & Wonder has a smaller global footprint and market cap ($11 billion), but is more diversified across physical, digital, and online casinos.  

And the winner is?

Macquarie has an outperform rating on the two gaming stocks, both listed on the S&P/ASX 100 Index (ASX: XTO).  

The broker has a target price of $75 for Aristocrat shares, representing a potential 27% upside at the time of writing.

The broker notes:

Aristocrat can continue to win market share supported by industry leading design & development spend, which is seen as offensive and defensive, and supports content and hardware commercialisation across the three channels (land based, social casino and iGaming). Legalisation of iGaming and iLottery expands Aristocrat’s TAM, and trajectory to generate US$1bn Interactive revenues in FY29,

For Light & Wonder shares, Macquarie has maintained its $170 target price. That’s a potential 21% upside for investors over the next 12 months.

In its recent note, Macquarie lists a court case between Aristocrat and Light & Wonder as a company risk for the latter. Light & Wonder has been taken to court by Aristocrat over the development of the Dragon Train game. Aristocrat has alleged that, amongst other things, it infringes its intellectual property.

A recent court ruling granted Aristocrat the right to “obtain discovery of math models” from Light & Wonder. Macquarie qualifies this as a ‘downside’ in its report.

Litigation with Aristocrat is ongoing and likely not be resolved until either an out of jury settlement (likely 1H26) or a jury decision (likely 2H26).

The post Which gaming share does Macquarie prefer: Aristocrat Leisure or Light & Wonder? appeared first on The Motley Fool Australia.

More reading

• Up 65% this year: Are Charter Hall Group shares still a buy?
• Does Macquarie rate a2 Milk shares a buy, hold, or sell?
• Invested in ASX mining shares? Expert recommends diversity over iron ore concentration
• Why Macquarie expects this fast-rising ASX 200 dividend stock to keep outperforming in 2026
• Top Australian stocks to buy right now with $5,000

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

Flight Centre Travel Group Ltd (ASX: FLT) shares are enjoying a welcome day of outperformance.

Shares in the S&P/ASX 200 Index (ASX: XJO) travel stock closed yesterday trading for $12. In early afternoon trade on Friday, shares are changing hands for $12.03 apiece, up 0.3%.

For some context, the ASX 200 is down 1.4% at this same time, following heavy selling in US stock markets overnight.

Longer term, Flight Centre shares have lagged the benchmark index, down 29% in a year compared to the 1.3% 12-month gains delivered by the ASX 200.

Though that’s not including the 40 cents per share in fully franked dividends the travel company paid eligible stockholders over the full year. At the current price, this sees Flight Centre stock trading on a fully franked trailing dividend yield of 3.3%.

And looking to the months ahead, Matthew Nicholas, deputy portfolio manager of 1851 Capital’s emerging companies fund, expects a much stronger performance from the stock (courtesy of The Australian Financial Review).

Flight Centre shares tipped for material turnaround

Asked which stock his fund owns that he believes has the most near-term upside, Nicholas pointed to Flight Centre shares.

“Flight Centre is a standout to us,” he said. “It’s trading near its COVID-19 lows from 2020, compared to the Small Ords, which have more than doubled over the same timeframe.”

Nicholas noted, “The stock trades on 12 times PE, is virtually debt-free and yet is the seventh most shorted stock on the ASX.”

Indeed, Flight Centre shares kicked off the week with a short interest of 11%. But according to Nicholas, traders betting against the ASX 200 travel stock could be about to get burned.

He said:

The business has faced a litany of headwinds in the past five years from pandemics to soft consumer confidence. Whilst the leisure business has borne the brunt of these challenges, in the background Flight Centre has grown what’s now a very robust corporate travel business and the key earnings driver of the group.

We see a combination of new contract wins in the corporate business and easing macro headwinds for the leisure division driving earnings across the group.

Nicholas concluded, “Importantly, market expectations are very low, which is always a good ingredient for outperformance.”

What’s the latest from the ASX 200 travel stock?

The last price-sensitive news for Flight Centre shares was released on 12 November.

The trading update came during the company’s annual general meeting (AGM).

Among the core financial metrics grabbing ASX investor interest, management forecasts FY 2026 underlying profit before tax will be in the range of $305 million to $340 million. That’s 5.5% to 17.6% above FY 2024 profit levels.

“FY26 is off to a positive start, with first-quarter results and preliminary October trading data confirming momentum across both corporate and leisure segments,” Flight Centre’s managing director Graham Turner said at the AGM.

The post Why this leading fundie forecasts a big uplift for Flight Centre shares appeared first on The Motley Fool Australia.

More reading

• These are the 10 most shorted ASX shares
• How high can Flight Centre shares fly? This prediction might be a pleasant surprise
• Here are the top 10 ASX 200 shares today
• Flight Centre shares tipped to fly 35% higher
• Why Breville, Flight Centre, Navigator Global, and Regis Resources shares are racing higher

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

Shares in DroneShield Ltd (ASX: DRO) have spent another day deep in the red after the technology company abruptly cancelled an investor call scheduled for Friday.

The stock fell as much as 12.2% to $1.66 on Friday before recovering to be changing hands for $1.74, down 7.8%, and well below the close last Friday of $2.33.

The shares are now trading at levels last seen in June, after hitting a high of $6.70 in October on strong news flow from the anti-drone technology company.

News flow turns sour

But the news in recent weeks has arguably been bad, confusing, and negative, with the company releasing a statement about contract wins which had already been released to the market, followed by the news that three of its directors had sold $70 million worth of shares. The company also this week announced its US Chief Executive was leaving the company.

The Australian Financial Review reported on Friday that Bell Potter, which the AFR pointed out had helped DroneShield raise $220 million last year, had organised a broker call, asking investors on Thursday to submit questions ahead of time.

The call was then cancelled on Friday morning, the AFR said.

Shares sales explained

DroneShield published a lengthy explanation to the ASX on Thursday regarding the share sales by its directors, which included Chief Executive Officer Oleg Vornik selling down a 14.81 million share stake.   

The company said that on 4 November, the vesting conditions for more than 44.4 million options had been met, and on 5 November, 31.2 million of these options were exercised.

The company said that investors in the company could have foreseen the share sales.

As it said:

The market was fully informed that the three directors had exercised performance options and were able to sell the DroneShield shares received on exercise. It is DroneShield’s belief that persons who commonly invest in securities would understand that the exercise of the performance options would crystallise the sale of a material proportion of the shares issued in order to meet the tax liability for each of the three directors and other employees arising from the exercise.

The company said it was not aware of any agreement between the three directors to sell their shares at the same time.

The company added:

DroneShield has been informed by the directors that they did not have an agreement to dispose of all (or any part) of their DroneShield shares, and that the shares were sold on-market, in the ordinary course of trading, and in accordance with programmed trading parameters agreed by each director with their broker.

DroneShield’s market capitalisation has fallen from a level greater than $6 billion last month to $1.71 billion at the close of trade on Thursday.

The post DroneShield shares tank again as investor call abruptly cancelled appeared first on The Motley Fool Australia.

More reading

• Why Accent, DroneShield, Lovisa, and Pilbara Minerals shares are sinking today
• 3 ASX 200 shares I’m avoiding next week
• Why DroneShield, GQG Partners, Origin Energy, and Worley shares are falling today
• DroneShield directors’ share sales and contract error: What investors need to know
• Why Ausgold, DroneShield, EML, and TPG shares are falling today

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 DroneShield. 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.

I have long written about my love of Washington H. Soul Pattinson and Co Ltd (ASX: SOL), or Soul Patts for short, shares, and how this ASX 200 investing house is one of my largest ASX investments. 

Soul Patts is a rather unique company in that it functions more as an investment vehicle than a traditional business that sells goods or services. It owns and manages a vast underlying portfolio of investments on behalf of its shareholders. These investments range from strategic and broad-based stakes in a range of other ASX shares to private equity and property assets.

The company has a formidable track record when it comes to these investments, with long-term shareholders enjoying market-beating returns for many years.

An important component of those returns is the dividends that Soul Patts has paid out. This company has the best income track record on the ASX, bar none, delivering an annual dividend pay rise every single year since 1998. 

As such, you can understand the love I have for this company as an investment, and why it is one of my largest ASX positions.

Despite this love, I haven’t made any major investments in the company for about two years, disregarding some small top-ups earlier this year.

Even so, I was thrilled to make a large purchase of Soul Patts stock back in late 2023, at a price of just under $32 a share. Given the company has been as high as $45.14 a share (hit in September 2025), this has fortunately paid off quite well so far.

Are Soul Patts shares a buy today?

Today, however, the company is well off that record high. In fact, it has taken quite the tumble since early September. At the current price of $36.57 (at the time of writing), Soul Patts is down about 18% from that high watermark from just ten weeks ago. 

So does that make the company a buy?

Well, Soul Patts is certainly a lot cheaper than it was back in September. However, I don’t think it’s really cheap just yet. This company attracted a rush of new buyers and investor optimism when it announced the plans to merge with Brickworks back in early June.

The merger went off without a hitch in September, but ever since, the air has been coming out of the brief share price inflation that the merger seemed to spark.

So yes, Soul Patts shares are down 18% from their September peak, but they are still above where they were back in May.

For me to pick up more shares, the company would have to get to at least $35.50, but probably a bit lower. That would put Soul Patts’ dividend yield, by my calculations anyway, above its long-term average. I’ve got my fingers crossed that this company’s shares keep on dropping accordingly.

The post I’m thrilled I bought Soul Patts shares 2 years ago. Would I buy them today? appeared first on The Motley Fool Australia.

More reading

• 3 ASX dividend shares raising dividends like clockwork
• These 2 ASX dividend shares are great buys right now
• How to make yearly passive income of $70,000 from ASX shares
• Unlock the Australian average salary by investing for passive income
• How to prepare for a share market crash… before it’s too late

Motley Fool contributor Sebastian Bowen has positions in Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The S&P/ASX 200 Index (ASX: XJO) is down 1.37% on Friday at 8,435.6 points, which is 7.5% off the record high set last month.

Despite the drop, Blackwattle Investment Partners says the ASX 200 is still expensive.

The ASX 200 is trading on a 21x forward price-to-earnings (P/E) ratio compared to its 10-year average of about 16x.

Excitement over the artificial intelligence (AI) revolution has certainly helped drive up global markets this year, including the ASX 200.

Are we headed for bubble trouble?

Is AI a bubble?

At the time of writing, the market is down 2.3% this week due to worldwide concern over high technology valuations and continuing economic uncertainty, particularly in the US, where speculation on the next move with interest rates changes daily.

This uncertainty hit ASX 200 tech stocks hard this week, with the sector down 3.62%. Financials are also down 2.85% so far this week.

Some investors feel worried that the hype around AI is creating a bubble.

US tech stock valuations remain very high, and just a few companies comprise a very large portion of the S&P 500 Index (SP: .INX).

Investors are worried about how much money the big tech giants are spending on AI, and whether this investment will truly bear fruit.

Outside the tech sector, many businesses are investing in AI to raise productivity, but we’re yet to see this translate to earnings growth.

It’s simply too early in the AI revolution for productivity gains in non-tech businesses to show up in their financials.

AI revolution versus dot-com bust

Many analysts and investors have acute memories of the dot-com bust in the early 2000s.

The Nasdaq Composite Index (NASDAQ: .IXIC) crumbled 60% over two years after hitting its peak in March 2000.

That is a shivers-up-your-spine market collapse that no investor wants to risk going through again.

However, many analysts say things with AI are very different to the market dynamics that produced the dot-com crash.

They point out that the major US tech companies leading the AI revolution are well-established, well-run businesses, whereas many company failures during the dot-com bust were start-ups that did not effectively harness the internet to grow profitable businesses.

The US tech giants also have substantial cash reserves, which means they do not have to rely on debt to fund their massive AI investments.

The world’s largest investment asset manager, BlackRock says:

In our view, parallels to the dot-com bubble fall short: tech earnings quality and capital efficiency are stronger today…

And unlike the dot-com era, robust earnings support today’s mega-cap valuations.

This week, the latest quarterly report from AI chip giant Nvidia Corp (NASDAQ: NVDA) was seen as a litmus test for how the AI revolution is tracking.

A positive report would reassure the market, while a disappointing one would enhance fears of a bubble.

Here’s what happened.

Nvidia delivers record revenue

Investors’ nerves were settled after Nvidia announced another quarterly revenue record.

Nvidia achieved $57 billion in sales, up 62% on the prior corresponding period.

The company’s gross margin was a staggering 73.4%. Net income of $31.9 billion represented a 65% increase on last year.

Nvidia CEO Jensen Huang said:

The AI ecosystem is scaling fast — with more new foundation model makers, more AI start-ups, across more industries, and in more countries.

AI is going everywhere, doing everything, all at once.

Joe Koh and Elan Miller, portfolio managers of Blackwattle’s Large Cap Quality Fund, said their clients were constantly asking about AI.

In their latest update, the managers said:

Some commentators have suggested that the high valuation multiples seen in equity markets such as Australia’s can be justified by the emerging benefits of AI.

And speaking to the management teams of many listed companies, there is reason to be optimistic about the potential for AI efficiencies.

However, history would suggest that it’s not the extent of efficiencies that matter to shareholders, as much as the ability of companies to retain those benefits rather than passing them on to their customers.

Koh and Miller point to the airline industry as a case in point:

… despite huge advances in aviation technology over the last few decades, the returns of many airlines have been below their cost of capital.

The benefits essentially accrued to travellers in the form of lower airfares, rather than to shareholders…

The managers said higher-quality companies would likely benefit disproportionately from AI compared to poorer-quality businesses.

They explained:

… stronger market positions enable them to retain more of the benefits for shareholders, rather than passing it all on to customers; better data from superior systems, scale or history enable better AI training; and better capacity (financial or human) enables faster, smoother or more reliable AI implementation.

As always, quality wins out in the end (even if it has a rough month or two).

Eric Sheridan from Goldman Sachs Research does not think there’s an AI bubble.

He says the Magnificent 7 companies are still generating large free cash flows, conducting buybacks, and paying dividends.

The post Does the AI revolution justify today’s high ASX 200 valuation? appeared first on The Motley Fool Australia.

More reading

• Nvidia stock in an AI bubble? The AI giant’s fantastic Q3 results and guidance should put that concern to rest
• Bitcoin price collapse leads US$1 trillion crypto crash
• Why are ASX 200 tech stocks getting smashed on Friday?
• AI bubble worries are rising. Nvidia’s $31.9 billion profit says otherwise.
• Where will Nvidia stock be in 3 years?

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