If you're looking for ASX value stocks to invest in, industrial company Brickworks Limited (ASX: BKW) might be a good option to look at today.

Although Brickworks is best known as an ASX dividend share, its share price has been moving sideways for some time, convincing me that it would qualify as a value stock now.

Brickworks shares have dropped by 16% since reaching an all-time high of $31.11 in March 2024. Over the past year, the company's shares have decreased by 2%, while the S&P/ASX 200 Index (ASX: XJO) has surged by 13%.

Attractive valuation compared to its book value

The prime reason that I think this is a value stock is based on its price-to-book (P/B) ratio.

Brickworks shares are valued at a P/B ratio of around 1.1x, which means the share price is approximately 10% more than its book value.

Over the last ten years, the company's P/B ratios have fluctuated between 0.85x and 1.6x. The Brickworks share price rarely falls below its book value. It has done only three times during the past decade, including the COVID-19 pandemic in 2020.

On the other hand, its book values per share (BPS) have consistently increased from $14.55 in FY19 to $22.87 in January 2024. The two factors supporting such consistent book value growth are:

• Brickworks invests in other ASX shares, including Washington H Soul Pattinson & Company Ltd (ASX: SOL)
• Brickworks is collaborating with Goodman Group (ASX: GMG) to develop a large parcel of land as industrial properties

Based on these assets, Brickworks estimates the company's net asset value is approximately $37 per share, even higher than its reported book value.

The key difference between the two figures is that "the balance sheet does not recognise the full market value of development land and its investments," the company explained.

Property development ventures

In addition to its core business of building products, Brickworks has a significant presence in property development through its two 50/50 joint ventures with Goodman Group.

These ventures focus on developing and managing industrial properties, particularly large-scale warehouses and logistics centres. With the rise of e-commerce and the increasing need for efficient logistics networks, this segment has become a strong growth driver for Brickworks.

Property trusts generate both rental income and capital gains through property value appreciation. This dual income stream provides financial flexibility, enabling reinvestment and consistent dividend payments to shareholders. In May 2024, the company explained:

Longerterm, we are confident that structural tailwinds will support customer demand and asset growth. Industry trends to online shopping has increased the demand for "last-mile" logistics and warehousing and we are seeing increasing demand for sophisticated and higher value facilities.

These structural trends, along with land supply issues, have driven up rent for prime industrial property in western Sydney by 55% in the past two years. We estimate that the current passing rent within the Industrial JV Trust of $147/m2 is now 35% below average market rent of $225/m2.

The Brickwork share price closed at $26.15 on Wednesday.

The post Looking for value shares? This ASX 200 gem looks like a no-brainer buy to me! appeared first on The Motley Fool Australia.

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Motley Fool contributor Kate Lee 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 Brickworks, Goodman Group, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Goodman Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Investors often seek stability and reliable income streams from their investments, especially in volatile market conditions. One such opportunity lies in real estate investment trusts (REITs).

HomeCo Daily Needs REIT (ASX: HDN) stands out as a prime example, offering a robust distribution yield of approximately 6% annually with quarterly payouts.

Focusing on essential retail brands

HomeCo Daily Needs focuses on a strategic portfolio of daily needs and non-discretionary retail properties across Australia.

These properties typically house essential services and retail outlets – think Woolworths, Coles, Officeworks, and Chemist Warehouse. This sector is known for its stability, as demand for these services remains relatively consistent regardless of economic cycles.

The company once again delivered resilient results for FY24, boasting 99% occupancy and nearly perfect rent collection. Its funds from operations (FFO) increased slightly from $177.1 million in FY23 to $178.1 million in FY24.

Based on its stable cash flow, the company announced a distribution of 8.3 cents per unit, implying a 6.5% yield. Even better, the company aims to increase its distribution to 8.5 cents per unit in FY25. If this is achieved, the distribution yield will rise to 6.7% on the prospective distribution.

What sets it apart is not just the high yield itself but the consistency of its quarterly payouts. For income investors, regular cash flow can be crucial for meeting financial needs and maintaining a predictable income stream.

Growth outlook

For FY25, the company aims for a 2.3% growth in its FFO to 8.8 cents per unit.

Over the long term, management seeks to grow by capital recycling and strategic positioning in metropolitan growth corridors. Commenting on growth strategy, HomeCo Daily Needs CEO Sid Sharma said:

HDN commenced on a further ~$85 million of projects in FY24, all of which were 100% precommitted and will add an incremental ~19,000 sqm of gross lettable area.

Looking ahead, there are multiple projects currently at various stages of planning and approval which could commence to achieve our targeted ~$100-120m of development starts in FY25.

Valuation merits

It's not just the high distribution yield that caught my eye. HomeCo Daily Needs is trading at a discount to its asset holdings.

HomeCo Daily Needs reported a net tangible asset (NTA) of $1.44 per unit at the end of June 2024, consistent from December 2023, despite an increasing capitalisation ratio.

This means that the REIT unit price of $1.27 is approximately 12% cheaper than the company's NTA per unit.

With stable quarterly cash distributions and trading at a discount to its asset value, HomeCo Daily Needs might be worth considering for any income-focused investor.

The post This 7% ASX dividend share pays cash every quarter appeared first on The Motley Fool Australia.

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Motley Fool contributor Kate Lee 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 Coles Group. The Motley Fool Australia has recommended HomeCo Daily Needs REIT. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The day has finally arrived! It's the Nvidia Corporation (NASDAQ: NVDA) earnings release day.

The US technology giant is scheduled to report its second-quarter (2Q FY25) earnings tonight on 28 August.

This should be an important event for many reasons. And it may be more so if you own any of the ASX exchange-traded funds (ETF) we are going to discuss.

Let's jump in to see what to expect!

What ASX ETFs have exposure to Nvidia stock?

The following ASX ETFs have a relatively large holding in Nvidia shares. So, if you own any of these, expect to see some unit price movements based on tonight's revelations.

Each ETF's holding in Nvidia shares as of 27 August are:

• Betashares Nasdaq 100 ETF (ASX: NDQ) has 9.1% of its assets invested in Nvidia
• Global X Semiconductor ETF (ASX: SEMI) has 10.9% of its assets invested in Nvidia
• Global X US 100 ETF (ASX: U100) has 11% of its assets invested in Nvidia

Street expectations

Three months ago, when the company reported its 1Q FY25 results, management guided for second-quarter revenue of US$28 billion. If achieved, this will indicate annual sales growth of 107%.

Nvidia has a history of beating its guidance. With this background, it is no surprise that Wall Street analysts predict that Nvidia's revenue and profits will be even better than the company had guided for.

Let's compare the street expectations to management guidance, as my colleague Beth highlighted.

Hints from previous big tech earnings

As the race to artificial intelligence (AI) heats up, big technology companies are increasing their capital investment in this area.

Nearly all big companies, including Microsoft, Alphabet, Meta, Amazon, and Tesla, emphasised the importance of AI and said they would increase spending on AI infrastructure, specifically data centres. It is no secret that a large chunk of these investments flow into Nvidia products.

Can Nvidia continue its dominance in this critical industry? All eyes will be on whether the company can continue beating heightened investor expectations.

The post 3 ASX ETFs to watch ahead of Nvidia earnings release tonight appeared first on The Motley Fool Australia.

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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Motley Fool contributor Kate Lee has positions in Microsoft and Nvidia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, BetaShares Nasdaq 100 ETF, Meta Platforms, Microsoft, Nvidia, and Tesla. 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 positions in and has recommended BetaShares Nasdaq 100 ETF. The Motley Fool Australia has recommended Alphabet, 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 share price of Mach7 Technologies Ltd (ASX: M7T), a medical imaging systems provider, is down 4.2% today after the ASX healthcare company reported its FY24 results.

Mach7 Technologies shares have not performed well over the past year, falling more than 22%.

Can this ASX small-cap company turn the tide here and have a chance to become the next Pro Medicus Limited (ASX: PME)?

Let's find out what the company reported for FY24.

Transition to subscription-based business continues

Key highlights from Mach7's FY24 results include:

• Sales orders increased by 52% year-on-year to $61.3 million in terms of total contract value.
• Revenue fell 3% to $21.1 million due to ongoing transition to recurring revenue.
• Annual recurring revenue (ARR) was up 29% to $21.1 million and represented 72% of the total revenue, up from 54% in FY23.
• Operating expenses increased by 13%, in line with management guidance.
• Adjusted earnings before interests, taxes, depreciation, and amortisation (EBITDA) fell from $2.5 million in FY23 to a loss of $2 million in FY24.
• Net profit after tax (NPAT) deteriorated to a loss of $8 million, compared to a $1 million loss in FY23.
• Operating cashflow turned positive to $3.5 million, in line with management guidance.

What else happened in FY24?

Mach7 continues to move towards subscription-based models, particularly in North America.

Subscription and maintenance contracts now dominate Mach7's sales orders, comprising 83% of the total, and representing a substantial increase from previous years. This transition is underscored by a decline in capital software sales, which have decreased significantly in favour of subscription models.

Renewals accounted for $37.5 million or 61% of total sales, a record high for the company, while new customers, including significant projects like the Veterans Health Administration, contributed $13.2 million or 22%.

A slight decrease in overall revenue in FY24 was primarily due to the short-term impact of the subscription transition. Recurring revenue now represents 72% of total revenue, underpinned by steady growth in ARR. This trend highlights Mach7's resilience and the stability provided by its subscription-based business model.

However, weak revenue led to weaker profits for the past financial year, reflecting the anticipated short-term financial impacts of their strategic transition.

On a positive note, the company achieved a positive operating cash flow of $3.5 million, demonstrating robust cash management and financial discipline amidst its growth initiatives.

FY25 guidance

Looking ahead, the company has a strong sales pipeline across different regions, care settings and product combinations.

The company guided for 15% to 25% revenue growth in FY25. Management expects the company's operating expenses to grow slower than revenue growth, leading to margin expansion.

Mach7 CEO Mike Lampron said:

Looking ahead to FY25, our priorities will centre around the addition of net new logos as our pipeline continues to grow and generate opportunities across multiple geographies and product combinations.

We will also undertake targeted investment in our people, processes and tools to further differentiate Mach7 from its competitors. This investment will focus on product innovation and reflect a customer-centric mindset.

Share price snapshot

Mach7 shares are down 4.54% to 56.5 cents at the time of writing.

The post Can this ASX healthcare stock, down 22% in a year, turn the tide after FY24 results? appeared first on The Motley Fool Australia.

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Motley Fool contributor Kate Lee 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 Mach7 Technologies and Pro Medicus. The Motley Fool Australia has recommended Mach7 Technologies and Pro Medicus. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Supermarket giant Coles Group Ltd (ASX: COL) shares will be on watch this morning.

This is because the ASX consumer share released robust FY24 financial results.

Over the past year, the Coles share price has risen 16%, outperforming its rival Woolworths Group Ltd (ASX: WOW), which is down nearly 6% over the same period.

Can Coles keep up its momentum? Let's find out.

Strong profit growth from supermarkets

Highlights from Coles' FY24 results include:

• Revenue increased by 5.7% on a 52-week basis to $43.6 billion
• Underlying earnings before interest and tax (EBIT) increased by 7.3% to $2,175 million
• Underlying net profit after tax (NPAT) increased by 4.1% to $1,210 million
• Earnings per share (EPS) rose 2.1% to 84.6 cents
• The company declared a final dividend of 32 cents per share, bringing the total FY24 dividends to 68 cents per share

All figures are based on continuing operations, excluding Coles Express, divested during the financial year. FY24 was a 53-week year on the Coles' retail trading calendar. All prior year comparisons are on an adjusted 52-week basis.

The Supermarkets division reported revenue growth of 4.3% to $39 billion and an impressive 10.5% growth in its underlying EBIT to $2,175 million. The company highlighted its focus on value and product availability paid off. Both the Exclusive to Coles range and eCommerce delivered strong growth.

On profitability, the Simplify and Save to Invest initiatives led to benefits of $238 million and a 44 bps improvement in loss rate in 2H FY24.

The Liquor segment's sales increased slightly by 0.5% to $3.7 billion, but underlying EBIT declined 13.9% as customers continued to reduce discretionary spending amid living cost pressures.

The company invested in the automated distribution centre (ADC) and customer fulfilment centre (CFC) programs. These facilities went operational in July 2024.

During the year, Coles acquired two automated milk processing facilities from Saputo Dairy Australia and 20 Liquor retail stores in Tasmania.

What did management say?

Commenting on the robust FY24 results, Coles Group CEO Leah Weckert said:

The financial pressures on households and families have been front of mind for us this year and we have endeavoured to deliver value across our supermarket, liquor and online offerings to help customers balance the household budget.

At the same time, we have worked hard to deliver improvements in availability and quality, made significant inroads in addressing loss, accelerated our digital offering, continued to maintain a strong focus on costs and completed the construction of our second ADC and both our CFCs.

Positive momentum to continue in FY25

In the first eight weeks of FY25, supermarket revenue grew by 3.7%, led by Winter of Sports campaigns. The company sees increasing popularity for Coles Finest range and convenience meals as consumers shift to home cooking rather than dining out.

In Liquor, sales declined by 1.4% in the first eight weeks of FY25, mainly due to the July CrowdStrike outage. Excluding this, sales were down by 0.3%.

In FY25, the company plans to open eight new supermarket stores, close five, and renew approximately 50 stores. Similarly, the company aims to open 13 new liquor stores and close 10 stores.

For the FY25 outlook, CEO Weckert commented:

As we look ahead, we are well positioned to deliver on our strategic priorities.

With our Kemps Creek ADC ramping up and our two automated CFCs in the process of transitioning orders from stores, we look forward to unlocking the full benefits of our transformation investments, including delivering further improvements in availability and efficiency through our ADCs and delivering a world-class customer experience for online orders.

With ongoing cost-of-living pressures, we will also continue responding to the needs of our customers with a focus on value through every day low prices, promotions, Flybuysand Coles Own Brand.

How expensive are Coles shares compared to peers?

Coles shares are valued at a price-to-earnings (P/E) ratio of 22x based on FY25 earnings estimates. Using S&P Capital IQ estimates:

• Woolworths Group shares are valued at a forward P/E of 25x
• IGA operator Metcash Ltd (ASX: MTS) shares are valued at a forward P/E of 13x
• Wesfarmers Ltd (ASX: WES) shares are valued at a forward P/E of 31x

Coles shares closed at $18.46 on Monday.

The post Coles shares on watch after strong FY24 results appeared first on The Motley Fool Australia.

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Motley Fool contributor Kate Lee 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 Wesfarmers. The Motley Fool Australia has positions in and has recommended Coles Group and Wesfarmers. The Motley Fool Australia has recommended Metcash. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Shares in Infomedia Limited (ASX: IFM) have surged 25% since January 2024, handily outperforming the S&P/ASX 300 Index (ASX: XKO), which rose just by 6% during the same period.

Infomedia shares are charging 2.5% higher at $1.81 at the time of writing after the ASX small-cap company reported robust FY24 results today.

Let's find out what the automotive industry software platform provider reported.

Balanced and profitable growth

Key highlights from the Infomedia's FY24 results include:

• Total revenue increased by 8% from a year ago to $140.8 million.
• Annual Recurring Revenue (ARR) at the end of June 2024 was $144.1 million, up 9% from a year ago.
• Underlying cash EBITDA (earnings before interests, taxes, depreciation, and amortisation) surged 17% to $33 million.
• Reported net profit after tax (NPAT) increased by 32% to $12.7 million.
• NPAT adjusted for non-cash amortisation costs rose 26% to $20.9 million.
• The company declared a final dividend of 2 cents per share for a total FY24 dividend of 4.2 cents per share.

Underlying free cash flow decreased by 6% to $27.2 million, largely due to income tax payment changes.

What else happened in FY24?

Infomedia's revenue increased 8% to $140.8 million, with 99% of this being recurring revenue. ARR also grew strongly at approximately 8%, reflecting resilient demand across its global product offerings.

The company also highlighted the balanced growth by region and product categories. For example, Infomedia continued to expand the number of Chinese OEM brand partners while signing the first light-commercial vehicle contracts with Isuzu and Hino. In addition, Infomedia made significant progress in mature products like Superservice and Microcat during FY24.

Operationally, Infomedia continues to expand its global footprint in the Americas, Asia-Pacific, and European regions, securing new contracts and increasing penetration in key markets.

Commenting on the FY24 results, Infomedia CEO Jens Monsees said:

In the last 2 years, we have achieved our objective to create strong profitable growth and a globally diversified business.

This is shown by our 17% increase in Cash EBITDA. Infomedia is a growing and profitable technology company with significant market opportunities in all regions and all products.

FY25 outlook

Management guides for FY25 revenue in the range of $144 million to $154 million. The company believes its profitability will remain stable, barring any unexpected swing in the global economy.

Despite some anticipated customer churn in FY25, Infomedia expects revenue growth from recent contract renewals and further investment in its product portfolio, particularly in Infodrive, which has shown double-digit growth.

Valuation comments

The Infomedia share price is up more than 2% to $1.81 today.

At this share price, Infomedia shares are valued at 25x FY25 profit estimate by S&P Capital IQ.

The company offers a fully-franked dividend yield of 2.3%.

The post Up 25% this year, can this ASX small-cap share keep rising after FY24 results? appeared first on The Motley Fool Australia.

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Motley Fool contributor Kate Lee 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 Infomedia. The Motley Fool Australia has recommended Infomedia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Understanding how your money grows over time is crucial to investing and personal finance. The Rule of 72 is one of the most straightforward and useful tools for gauging the power of compound interest.

This simple formula can help you estimate how long it will take for an investment to double in value, providing a quick snapshot of the potential impact of your financial decisions.

But what exactly is the Rule of 72, and why does it matter? Let's dive in.

What is the Rule of 72?

The Rule of 72 is a quick, mental math formula that estimates the number of years required to double an investment at a fixed annual rate of return. The formula is:

Number of Years to Double = 72 / Annual Rate of Return

For example, if you have an investment expected to grow at an annual rate of 6%, the Rule of 72 tells you that your money will take approximately 12 years (72 ÷ 6 = 12) to double.

The beauty of the Rule of 72 lies in its simplicity. Without needing a calculator, you can quickly assess the impact of different rates of return on your investments.

Let's take an example. Core Logic revealed Sydney house prices doubled in the past ten years, cited by the Australian Financial Review in January 2024. Using the Rule of 72, we can determine a compound annual growth rate (CAGR) of approximately 7%.

How can we apply this to investment decisions?

This is useful when comparing different investment opportunities.

Now, let's deepen our analysis by considering another key principle: over the long term, share prices tend to align with the companies' earnings growth rates.

By combining these two 'rules,' we can roughly estimate the growth potential of certain investments. For this exercise, I'll use examples from the top ASX shares whose values increased tenfold over the past decade, which my colleague Bernd highlighted.

The first example is Pro Medicus Ltd (ASX: PME). The medical diagnostics software provider's earnings per share (EPS) increased from 1.5 cents in FY14 to 79.1 cents in FY24, implying a CAGR of 49%. Its share price gained 13,170% or roughly 65% annually during this period.

More recently, the company's EPS grew at around 30% per year over the last three years.

Similarly, the second example is Pinnacle Investment Management Group Ltd (ASX: PNI) shares, which have gained 1,930% over the past decade, translating into a CAGR of approximately 34%.

During this period, its EPS went from 3.4 cents in FY14 to 45.5 cents in FY24, at a CAGR of 30%.

From these two examples, investors might assume the following:

• If the company can maintain the 30% annual profit growth, the invested money in these shares could double in 2.4 years.
• If the earnings growth decelerates to 20% per year, the invested money would double in 3.6 years.

This is a simplified exercise, assuming the market valuations, such as the price-to-earnings ratios, remain constant. But this is a helpful way to get a quick-and-rough estimation.

Other implications

Investors often have unrealistic expectations about how quickly their money can grow. Using the Rule of 72, you can set more realistic goals and better understand the time horizon required to achieve them.

For instance, expecting your money to double in five years would require a return of about 14.4% annually (72 ÷ 5 = 14.4%), which is quite high and not typically sustainable in most traditional investments.

Whether deciding between a high-risk, high-reward investment or a more conservative approach, the Rule of 72 can help you weigh your options.

If you're considering a stock that promises a 9% return versus a bond offering a 4% return, the Rule of 72 shows that the stock could double your investment in eight years, while the bond would take 18 years.

Foolish takeaways

The Rule of 72 is a powerful tool for anyone looking to understand the impact of compound interest on their investments.

This simple formula can guide your financial decisions and help set realistic expectations for your financial future by providing a quick estimate of how long it will take for your money to double.

Whether you're saving for retirement, planning a major purchase, or just curious about how your money can grow, the Rule of 72 is an essential concept to have in your financial toolkit.

The post What is the Rule of 72, and why does it matter? appeared first on The Motley Fool Australia.

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Motley Fool contributor Kate Lee 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 Pinnacle Investment Management Group and Pro Medicus. The Motley Fool Australia has positions in and has recommended Pinnacle Investment Management Group. The Motley Fool Australia has recommended Pro Medicus. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Today, Rural Funds Group (ASX: RFF), one of the popular ASX dividend shares, reported its FY24 results.

The Rural Funds unit price is down more than 30% from its peak of $3.18 in January 2022. More recently, the unit price has recovered approximately 7% in the past year.

As a result, Rural Funds units are trading at a historical discount to the company's net asset value (NAV).

Could this discount narrow from here?

Let's find out what the ASX agriculture company posted today.

Steady growth in its book value

Key takeaways from the company's full-year results include:

• Property revenue increased 8% to $88.4 million, led by additional rental income from macadamia developments
• Net profit after tax (NPAT) of $80.4 million, down from $94.5 million in FY23
• Total comprehensive earnings of $117.2 million, including independent property valuations
• Earnings per unit, based on total comprehensive earnings, was 30.28 cents, similar to 30.10 cents in FY23
• Adjusted funds from operations (AFFO) of $42.4 million, up slightly from $41.1 million in FY23
• AFFO per unit was 11 cents, up from 10.7 cents a year ago
• Rural Funds declared the total FY24 distribution of 11.73 cents per unit, the same as in FY23
• Adjusted NAV, including the market value of its water entitlement rights, was $3.14 per unit in June 2024, up 8% year-on-year. This NAV was higher than $3.07 per unit in December 2023

In FY24, the company engaged independent valuations on approximately 69% of its portfolio assets, leading to a net valuation gain of $97.3 million.

Portfolio updates

The highlight of the FY24 results was the company's ongoing development of a large macadamia project spanning 3,000 hectares. The second phase of the macadamia development lease, valued at $133.9 million, commenced during FY24.

Rural Funds Group expects the development, which began in 2021, will be mostly finished by the end of 2024.

Management estimates the macadamia project, which has a 40-year lease, to contribute approximately 18% of its revenue in FY25. In addition, the company sees potential for further growth as more capital expenditure is invested.

To support the macadamia project, the company invested $217 million in capital expenditures in FY24 and budgeted for an additional $70.2 million in FY25.

Rural Funds Group increased the facility limit to $867.4 million from $794.5 million in FY23. This was to provide funding for FY25 capital expenditures, including the macadamia project.

In June 2024, the company announced a lease and 50% sale of its Mayneland and Baamba Plains cropping properties for $75.7 million.

Focused on agricultural properties, Rural Funds highlighted its inflationary hedge characteristics, long leasing terms averaging 13.5 years (weighted-average lease expiry), and structural rental growth.

What's next for Rural Funds Group?

Looking forward to FY25, the company forecast a slight increase in AFFO to 11.4 cents from 11 cents in FY24. Distributions per unit are expected to be the same as in FY24 at 11.73 cents.

The company aims to continue to develop other assets within its group. For this, management is actively seeking leases and partial sales to enhance earnings, operational exposure, and financial leverage.

Valuation comment

Rural Funds units are valued at a price-to-book ratio of 0.67x against the adjusted NAV of $3.14 per unit.

The company offers a distribution yield of 5.6%, while management guided the distribution per unit will remain unchanged for FY25.

The Rural Funds unit price is up slightly by 0.5% to $2.1 this morning.

The post Can Rural Funds narrow price discount to NAV after FY24 results? appeared first on The Motley Fool Australia.

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Motley Fool contributor Kate Lee 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 Rural Funds Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

GR Engineering Services Ltd (ASX: GNG) shares are surging nearly 4% today after the ASX mining company released its FY24 results.

Over the past six months, the GR Engineering share price has dropped by nearly 20% due to weak investment sentiment in the mining sector, which has been affected by falling global commodity prices.

The decline in the GR Engineering share price continued as BHP Group Ltd (ASX: BHP) announced a temporary suspension of its West Musgrave Project in July 2024, in which GR Engineering was engaged.

Let's find out what GR Engineering reported today.

Profit growth despite weak revenue in FY24

Key financial highlights from the FY24 report included:

• Revenue decreased by 23% to $424.1 million
• Earnings before interests, taxes, depreciation, and amortisation (EBITDA) increased by 14.6% to $50.9 million
• Net profit after tax (NPAT) increased by 13.4% to $31.2 million
• Earnings per-share (EPS) for FY24 was 18.9 cents, implying a trailing price-to-earnings (P/E) ratio of 10x

GR Engineering saw its revenue drop from a year ago as contract awards were delayed, which was largely expected.

Despite lower revenue, the company maintained a solid EBITDA margin. This performance reflects strong operational results from its core business, GR Production Services and Mipac.

The company declared a final dividend of 10 cents per share, bringing the total FY24 dividends to 19 cents per share, consistent with the previous year.

This implies a trailing dividend yield of 10%. This dividend yield and its low P/E ratio indicate attractive valuations based on trailing numbers.

Management comments

Looking back on FY24, GR Engineering Managing Director MR Tony Patrizi said:

Project execution levels remain high as works continue on the Mungari Future Growth Project, Kathleen Valley Lithium Backfill Project and Kainantu Gold Project.

GR Engineering will work through a transition period with BHP with respect to the West Musgrave Project with operations to be suspended in October 2024 and handover activities to be completed by December 2024. GR Engineering will continue to support BHP during this process.

He also highlighted GR Engineering's strong project pipeline. He added:

GR Engineering's contracted and near term pipeline across the group is solid and is continuing to grow. GR Engineering is also currently involved in ongoing early contractor work and a high volume of studies across a broad range of commodities and geographies.

Based on the pipeline and the high levels of study work, GR Engineering's medium to long term visibility for project work remains high.

FY25 outlook not provided

Regarding the FY25 outlook, investors will have to wait until the company's Annual General Meeting (AGM), which will be held on 27 November 2024.

Previously, the company expected a revenue impact of up to $80 million in FY25 related to the West Musgrave Project.

Despite some uncertainties, GR Engineering shares are rising nearly 4% today on valuation merits.

The post Why is this beaten-up ASX All Ords mining share rising after FY24 results? appeared first on The Motley Fool Australia.

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Motley Fool contributor Kate Lee 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 Gr Engineering Services. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

DUG Technology Ltd (ASX: DUG) shares are soaring 9.08% to $3.19 today after the company released its FY24 results.

The ASX small-cap company specialises in analytical software development and high-performance computing (HPC). It is known for its innovative, cost-effective software products, which are focused on geoscience data analysis.

Let's find out what the ASX technology company reported today.

Headline numbers

Financial highlights from DUG Technology's FY24 financial results included:

• Sales wins of US$67.4 million, up 35% from a year ago
• Revenue from customers of US$65.5 million, up 29% from a year ago, supported by a 35% jump in its services revenue
• Earnings before interests, taxes, depreciation, and amortisation (EBITDA) of US$16.6 million, up 10% year-over-year.
• Excluding third-party compute costs of US$6.6 million, underlying EBITDA grew by 54%.
• Net profit after tax (NPAT) of US$3.3 million, down 33%, mainly due to computing outsourcing costs. These costs will not occur in FY25 as the company internalised its compute requirements.

DUG's revenue grew by 29% to US$65.5 million in FY2024, with services revenue hitting a record high of US$54.7 million, a 36% increase. Software revenue also rose by 11% to US$7.4 million, while high-performance computing (HPC) revenue declined by 16% to US$3.4 million.

The company's profitability reached a record high, with an EBITDA of US$16.6 million, up 10%, and an underlying EBITDA of US$23.2 million, a 54% increase from the previous year.

DUG ended the year with US$9.4 million in cash and gross debt of US$1.2 million, which included a US$1 million loan repaid shortly after the fiscal year ended. The company had a net debt of US$14.5 million, a significant change from the previous year's net cash position of US$5.2 million, mainly due to investments in new computing equipment through asset financing.

Operating cash inflows decreased to US$12.1 million, primarily due to higher third-party compute costs. DUG invested US$31.3 million in new capital equipment to support its services business, with US$24.4 million of this amount funded through asset lease financing.

DUG managing director Matt Lamont said:

We've had another great year, breaking a number of financial records along the way. The growth of our Services business was particularly encouraging with the increasing uptake of our Multi-parameter FWI Imaging technology. In total we secured US$67.4 million in new services projects during FY2024.

Its Multi-parameter FWI Imaging technology is the company's new product attracting high demand because of its energy efficient feature amid anticipated power shortages.

FY25 outlook

The company remains upbeat going into FY25. The Services order book grew by 31% to US$36.5 million as of 30 June 2024, supporting strong growth expectations for FY25. The company believes its timely investment in new computer hardware in FY24 will support anticipated growth in MP-FWI imaging product sales.

Commenting on FY25, Dr Lamont added:

We recently announced the signing of a significant Intellectual Property (IP) licensing agreement with Baltimore Aircoil Company (BAC) which we believe will change the data centre cooling landscape globally.

The outlook for our Services business line continues to be strong. We are excited by our new Abu Dhabi office which has been commissioned and undergoing fit out.

Share price snapshot

The DUG Technology share price is up 9% today, approaching its all-time high.

Over the past year, the DUG Technology share price more than doubled.

The post Guess which ASX small-cap share is soaring 9% on FY24 results? appeared first on The Motley Fool Australia.

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Motley Fool contributor Kate Lee 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 Dug Technology. The Motley Fool Australia has recommended Dug Technology. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This morning, medical diagnostics giant Sonic Healthcare Ltd (ASX: SHL) reported FY24 results.

As expected, the FY24 results were weak, but the normalisation of COVID-related revenue largely drove this.

Sonic, has indeed, had a couple of tough years. Its share price fell from $46.25 in December 2021 to $23.58 in June 2024. But since then, it has rebounded approximately 17%.

Today, the company guided for a 10% profit growth in the new financial year.

Can Sonic Healthcare shares pass the 'recovery test'? Let's find out!

Robust base revenue growth in FY24

Some of the highlights from the result included:

• Revenue increased by 9.8% to $8.97 billion despite normalising COVID-19-related revenue, down 87% to $62.4 million
• Base business revenue, excluding the abnormal COVID-19 impact, was up 15.9% to $8.9 billion, led by organic growth and key acquisitions
• Earnings before interests, taxes, depreciation, and amortisation (EBITDA) fell 6% to $1.6 billion, excluding the gain related to the sale of West Division USA
• Net profit after tax (NPAT) fell 25% to $511 million
• The company declared the final dividend of 63 cents per share, bringing the total FY24 dividend to $1.06 per share, up 2% year-over-year

While revenue growth faced pressure due to the absence of COVID-19-related businesses, base business revenue increased by 16% compared to last year. This growth was attributed to a 6% organic growth and strategic acquisitions.

The company's 6% organic growth in its base business revenue was impressive. The company highlighted the strong growth in Australia (10%), Germany (7%), and the UK (9%). Management believes "these levels to be in line or better than market growth." 

Sonic made several acquisitions in FY24, including Medisyn and Dr Risch in Switzerland, pathologyWatch in the USA, and the UK's Hertfordshire & West Essex contract. The company estimates a revenue impact of approximately $655 million from these acquisitions completed through FY24.  

Looking back on FY24, Sonic's CEO, Dr Colin Goldschmidt, said:

The 2024 financial year can be summarised as a transition period for Sonic Healthcare, as we moved away from the impacts o the pandemic towards business as usual

This seems to summarise the past couple of years well.

FY25 guidance

Sonic guided for FY25 EBITDA of $1.7 billion to $1.75 million, approximately 10% growth at the midpoint. The company confirmed that July 2024 EBITDA is in line with its targets.

Commenting on the FY25 outlook, Dr Goldschmidt commented:

Inflationary pressures, particularly on labour costs, have impacted our results for FY 2024 and there will be some annualisation of these effects into the first part of FY 2025.

These impacts are expected to ease going forward, with headline inflation rates in Sonic's main markets now in the range of 1.3% to 3.8%.

In managing our costs, especially labour costs, we remain mindful of the necessity to maintain the high quality of the essential healthcare services we provide, as well as to support our ongoing strong organic growth.

The Sonic Healthcare share price is up 1% today after reporting FY24 results and FY25 guidance.

The post Sonic Healthcare: Has the storm finally passed? appeared first on The Motley Fool Australia.

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

This morning, high-technology marine parts maker VEEM Ltd (ASX: VEE) is soaring 8% after releasing robust FY24 results. 

Let's jump in to see what this ASX small-cap company just reported.

FY24 headline numbers

These were some of the highlights from the result:

• Revenue increased by 35% to $80.6 million
• Earnings before interests, taxes, depreciation, and amortisation (EBITDA) increased by 48% to $14.8 million
• Net profit after tax increased by 70% to $7 million
• The company declared a final dividend of 0.77 cents per share, bringing the total FY24 dividend to 1.54 cents per share

VEEM delivered solid earnings growth despite expensing one-off costs, including $0.8 million for the Sharrow project and $0.5 million related to liver cancer treatment research. 

On this last point, it's important to note that the company has been contributing its knowledge of induction heating technology in a research project with a Perth liver surgeon for the treatment of liver cancer for several years. The company decided to amortise the total amount relating to this project, which has led to this one-off pre-tax deduction against a profit of $0.5 million.

ASX small-cap firing in all cylinders

Overall, VEEM reported strong FY24 numbers in many aspects. 

The highlight of the result was surging revenue from VEEM gyro stabilisers, the company's flagship product that innovates how ships are stabilised. The company sold 18 gyro stabilisers, generating $12.3 million in revenue, a substantial increase from $5 million in FY23.

An accelerated order from Strategic Marine largely drove the growth. In FY24, the company made VEEM's gyro stabiliser a standard feature on its fast crew boats.

In addition, VEEM's propulsion business saw strong demand, particularly for its fixed-pitch propellers. Propulsion revenue jumped by 26% to $35.3 million, with propellers alone contributing $29.1 million. The growth was supported by the installation of new machining centres. The company also automated the propeller manufacturing process.

VEEM entered into a partnership with Sharrow Engineering to design and manufacture Sharrow propellers, targeting inboard vessels up to 5 metres in diameter. The initial rollout is focused on select customers, with first deliveries and sales expected in 1H FY25. 

Management believes its strong momentum will continue into FY25, highlighting "significant barriers to entry" for its gyro stabilisers, strong global demand for VEEM's propellers, and the rollout of Sharrow-by-VEEM propellers.

ASX small-cap share price performance

The VEEM share price has nearly three-folded over the past year, but it has been going sideways since April.

The VEEM share price is up 8% this morning, approaching its all-time high of $2.02.

The post Why is this ASX small-cap jumping 8% after releasing FY24 results? appeared first on The Motley Fool Australia.

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Motley Fool contributor Kate Lee 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 Veem. The Motley Fool Australia has recommended Veem. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Pallets provider Brambles Ltd (ASX: BXB) shares hit a record high of $17.51 this morning after the company released strong FY24 numbers.

Let's jump right in to see what this ASX 100 Industrial company reported today.

Robust FY24 results and share buybacks announced

The key financial highlights from the FY24 report are as follows. It should be noted that year-on-year comparisons are based on continuing operations only.

• Revenue increased by 7% from a year ago to US$6.55 billion.
• Underlying profit surged 18% to US$1.26 billion.
• Operating profit after tax for continuing operations increased by 19% to US$779.9 million.
• Basic earnings-per-share (EPS) for continuing operations increased by 19% to US 56.1 cents.
• The final dividend per share of US 19 cents was declared, bringing the FY24 total dividends to US 34 cents per share.

The company's cash flow from operations surged by US$529.3 million from a year ago to US$1.32 billion in FY24, leading to a free cash flow of US$882.8 million.

Brambles' financial performance highlights strong free cash flow generation, driven by operating leverage and enhanced asset efficiency resulting from its "Shaping Our Future" transformation initiatives.

These initiatives have significantly contributed to asset efficiency improvements, while retailers and manufacturers continued to reduce their pallet balances as part of 'inventory optimisation' efforts.

The company highlighted that Bramble's ongoing efforts in asset efficiency helped improve pallet cycle times and loss rates for its customers.

The company's 7% revenue growth was also driven by price realisation efforts aimed at recovering costs. Volumes remained stable compared to FY23. Management expects the volume growth will continue into FY25.

On the back of strong results, the company announced share repurchases of up to US$ 500 million.

Brambles increased its target dividend payout ratio range from 45% and 60% to 50% and 70%.

What did management say?

Commenting on the solid FY24 results, Brambles CEO Graham Chipchase highlighted the company's improved customer experience and operational efficiency. He said:

We are proud of what we have achieved this year with marked improvements to the customer experience in all regions, the reinforcement of our leading sustainability credentials and financial outcomes that delivered on our investor value proposition.

Our profit and cash flow performance were ahead of guidance despite incremental costs associated with additional pallet returns as retailers and manufacturers largely completed inventory optimisation initiatives in North America and Europe.

This resilience reflects the investments we have made to increase the capacity and agility of our networkthrough automation, as well as structural reductions in the capital intensity of our business linked to our sustained focus on asset efficiency and broader improvements in supply chain dynamics.

Strong momentum to continue in FY25

Looking at FY25, Brambles provided the following guidance.

• Revenue growth of 4% to 6%,
• Underlying profit growth of 8% to 11%
• Free cash flow before dividends of US$750 million to US$850 million.

On the FY25 outlook, Chipchase added:

Our FY25 financial outlook delivers our investor value proposition. It reflects our ongoing focus on commercial discipline, pursuing new business growth in key markets and delivering further efficiencies through our transformation programme.

Share price movement

The Brambles share price has surged more than 8% to $16.94 at the time of writing and is trading 20% higher over the past year.

The post Brambles share price hits record high on strong FY24 results appeared first on The Motley Fool Australia.

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Motley Fool contributor Kate Lee 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.

Affordable accommodation provider Aspen Group Limited (ASX: APZ) reported robust results for FY24, which ended on 30 June 2024.

Aspen group shares are currently down 0.75% at $1.98.

Let's find out how this ASX small-cap company performed in the last financial year.

Double-digit growth in FY24 revenue and profits

Key highlights from the results include:

• Net rental income increased by 27% to $30.8 million, while development profits surged 39% to $8.7 million
• Underlying earnings before interest, taxes, depreciation, and amortisation (EBITDA) increased by 31% to $32.2 million
• Underlying operating earnings grew 21% to $25.3 million
• Underlying earnings per-security (EPS) increased by 15% to 13.81 cents
• The company declared a distribution of 8.5 cents per security, up 10% on FY23
• Net asset value (NAV) increased by 11% to $2.23 per security

The average selling price of Aspen Group's properties remained competitive at approximately $332,000 while delivering a 30% profit margin for its development projects.

In FY24, the company invested $52 million in acquiring properties across the country and an additional stake in Eureka Group Holdings Ltd (ASX: EGH), which Aspen now owns 36% of. Aspen also divested from 38 sites with relatively high rent for $25 million.

The company focuses on the cheaper end of the property market, which benefits from a structural supply shortage in Australia. Its average rent was just $317 weekly in FY24, even after a 15% jump from the previous year. In addition, Aspen's continuous efforts to improve operational efficiency have led to margin expansion in its rental division, which recorded a 50% operating margin.

Aspen Group aims to enhance growth opportunities through its development projects. The company is engaged in 9 active projects across different sectors and regions. Through its capital-light development model, Aspen achieved a high return on invested capital (ROIC) of 21%.

The company emphasised that it has 1,152 approved sites for future development in its pipeline, approximately 12 times FY24 revenue, indicating a long runway for growth.

The company maintained a strong balance sheet, with its financial gearing of 26% and an interest cover ratio of 3.7x.

FY25 outlook

Management is optimistic for the new financial year, with projected underlying operating EBITDA of $40 million, a 24% increase from FY24, and expected underlying EPS growth of 10% to 15.2 cents.

The company also guided for an 18% increase in its FY25 distribution to 10 cents per security.

The company continues to see high occupancy in its property offerings driven by its competitive rents.

The company also sees volume growth in rental properties driven by its property acquisitions and its 36% holding in Eureka Group.

Based on strong demand, Aspen Group estimates its current market rent for the residential portfolio is $390 per week, which is about 12% higher than FY24.

Aspen Group aims to further enhance its growth potential by recycling capital out of non-competitive and non-core assets into strategic assets.

Trading below its book value

Aspen Group securities are valued at approximately a 10% discount to its latest NAV of $2.23 per security, which appears attractive. For context, Aspen's NAV has increased by double-digit annually over the last five years from $1.13 in FY19.

Aspen Group offers a distribution yield of 5% based on its FY25 guidance.

The post Aspen Group reports a 15% growth in underlying profit appeared first on The Motley Fool Australia.

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Motley Fool contributor Kate Lee 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 Aspen Group. The Motley Fool Australia has recommended Aspen Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Telstra Group Ltd (ASX: TLS) shares are on watch today after the ASX telco giant reported its FY24 financial results.

In short, all 'underlying' numbers were in line with expectations but reported statutory profits declined significantly as the company booked a sizeable one-off cost related to its business restructuring.

Let's find out how the ASX blue-chip stock pared in the last financial year.

Telstra's underlying profits are largely in line with expectations

• Total income increased by 1% to $23.5 billion
• Reported earnings before interest, taxes, depreciation, and amortisation (EBITDA) fell 4.2% to $7.5 billion, while underlying EBITDA increased by 3.6% to $8.2 billion
• Reported net profit after tax (NPAT) dropped 12.8% to $1.8 billion, but underlying NPAT increased by 7.5% to $2.3 billion
• Underlying earnings per share (EPS) increased by 5.7% to 18.5 cents
• Dividend per share (DPS) for FY24 came in at 18 cents, up 5.9% year-over-year
• The underlying return on invested capital (ROIC) was 8.3%, which improved from 8.1% a year ago

Compared to analyst consensus by S&P Capital IQ, revenue was slightly below expectations, but underlying EBITDA was in line.

There were a number of one-off expenses booked for the year, including $311 million related to Telstra Enterprise's reset and exit and $247 million of restructuring costs associated with the organisational changes announced in May 2024.

These one-off costs were excluded from the company's underlying numbers.

What else happened during FY24 for Telstra?

Telstra's strong growth in underlying EBITDA was supported by its mobile division, which delivered a 9.2% growth to $424 million. Telstra Infrastructure division raked in $147 million of additional profit, mainly driven by Amplitel, which grew 16% from a year ago.

Cost reduction efforts continued in FY24, and the company highlighted it saved operational costs of $122 million over the last two financial years.

During the year, Telstra undertook a major restructuring in its Enterprise business to simplify its operations and improve productivity.

This included a massive job reduction, up to 2,800 positions, which the company expected to help achieve $350 million of its operating cost savings by the end of FY25.

Key takeaways from management

Commenting on the FY24 results today, Telstra CEO Vicki Brady highlighted its strong mobile business performance. She said:

Our mobiles business continues to perform very strongly, with more peopl choosing our network and average revenue per user (ARPU) growth conributing to our underlying EBITDA growth.

In addition, she reaffirmed the company's ongoing cost-saving initiatives to overcome operational challenges. She added:

While most parts of our business performed strongly, Fixed Enterprise is clearly a long way from where we need it to be.

We've also been challenged by higher-than-expected inflation and costs, which have made it tougher to meet our cost reduction ambitions.

We recognised the need to take significant action and in May we announced proposals to simplify our operations and increase productivity. These measures, along with our existing actions, are forecast to reduce $350 million of fixed core costs over FY23-25.

What's next?

Looking forward, the company provided FY25 guidance as follows.

• Underlying EBITDA of $8.5 billion to $8.7 billion, similar to the company's previous guidance of $8.4 billion to $8.7 billion
• Business-as-usual capex of $3.2 billion to $3.4 billion
• Strategic investment of $0.3 billion to $0.5 billion
• Free cash flow after lease payments before strategic investment of $3 billion to $3.4 billion

The company aims to improve its underlying ROIC by improving operating efficiency.

Telstra also plans to focus on achieving 95% population coverage on its 5G network by the end of FY25, up from 89% in FY24.

Valuation merits

Telstra shares are valued at a price-to-earnings ratio (P/E) of 20x based on S&P Capital IQ's FY25 EPS estimate. This is about the midpoint of its historical trading range of between 10x and 30x.

Using FY24 dividends declared, Telstra shares offer a fully-franked dividend yield of 4.7%.

The Telstra share price fell nearly 15% this year to a low of $3.39 in May. From there, Telstra shares rebounded to $3.86 on valuation merits and as the company increased its mobile pricing in July.

The post Telstra shares on watch after a 5.9% increase in dividend appeared first on The Motley Fool Australia.

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Motley Fool contributor Kate Lee 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 has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Technology sector investor Bailador Technology Investments Ltd (ASX: BTI) shares are up 3% at $1.20 in morning trade after the company released its FY24 results.

Let's find out what this ASX small-cap technology-focused investment company reported today!

FY24 results highlights

Key financial highlights from Bailador's FY24 reports include:

• Net profit after tax (NPAT) increased 282% from a year ago to $20.7 million.
• Net tangible asset (NTA) was up 7 cents to $1.59 at the end of June 2024.
• NTA at the end of July was $1.62.
• The company deployed and committed a total investment of $53 million in Updoc, DASH Technologies and Hapana.
• Bailador holds $52 million in net cash at the end of July 2024.
• The company declared a final dividend of 3.4 cents per share.

Bailador estimated it has delivered a 9.2% return to its shareholders, including post-tax NTA growth and dividends paid during the reporting period.

The company's total investment grew from $16 million in FY23 to $40.5 million in FY24, largely due to asset value increases in Siteminder Ltd (ASX: SMD) and Access Telehealth.

The final dividend of 3.4 cents per share is part of the company's commitment to pay 4% of pre-tax NTA per annum as dividends. The company offers 100% franking credits on its dividends and a dividend reinvestment plan (DRP) at a 2.5% discount to the average share price between 19 and 22 August.

Bailador co-founder and managing partner David Kirk had this to say:

We are pleased to have achieved another solid result for shareholders in FY24, delivering an after-tax Portfolio Return of 9.2% and declaring a Final Dividend of 3.4 cents per BTI share, which represents a grossed-up annualised yield of 7.8%.

Deploying its cash balance into new investments

While a high dividend yield wouldn't hurt, the highlight of the results was Bailador's active investment in new companies.

In May 2024, the company invested $20 million in Updoc, a digital healthcare platform. Shortly after in June 2024, Bailador announced a total investment of $20 million into DASH Technology Group, a financial advice and investment management software platform provider. 

In addition, Bailador announced a $7.7 million investment in the healthcare platform Hapana just this week.

It is encouraging to see that Bailador is deploying its ample cash balance, which has increased substantially as the company successfully exited several previous investments.

The large cash holding poses a dilemma for Bailador as holding too much cash could restrict future opportunities for asset growth.

Trading at a large discount to its asset value

The Bailador Technology share price has traded between $1.1 to $1.4 over the past year. Even with today's rise, the share price fell approximately 5% over the period.

This is a nearly 25% discount compared to the company's latest NTA of $1.62 at the end of July 2024.

As the company resumes active investment in technology companies, investors hope this large discount on its asset value will decrease.

The post This ASX small-cap stock is climbing today on 280% profit boost appeared first on The Motley Fool Australia.

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Motley Fool contributor Kate Lee 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 Bailador Technology Investments and SiteMinder. The Motley Fool Australia has positions in and has recommended SiteMinder. The Motley Fool Australia has recommended Bailador Technology Investments. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

HomeCo Daily Needs REIT (ASX: HDN) released its FY24 results and FY25 guidance. The numbers were broadly in line with management guidance.

Let's see how the real estate investment trust performed during FY24.

FY24 results are largely in line with the guidance

Key numbers from HomeCo Daily Needs REIT are as follows.

• Property net operating income (NOI) increased by $11.6 million to $272.9 million.
• Funds from operations (FFO) increased slightly from $177.1 million in FY23 to $178.1 million in FY24, equivalent to 8.6 cents per unit, in line with management guidance.
• The company announced a distribution of 8.3 cents per unit, in line with guidance.
• Net tangible assets (NTA) in June 2024 was $1.44, in line with its December 2023 value, despite a capitalisation rate increase.
• Gearing remains modest at 35.1%, within its target range of 30% to 40%.

HomeCo Daily Needs acquired $293 million of assets in FY24, focusing on high-growth metropolitan locations. The company applied a target return on invested capital (ROIC) of approximately 7% to these acquisitions.

What did management say?

CEO Sid Sharma highlighted the company's portfolio strategy, including active capital recycling, as the reason for resilient business performance in FY24. He said,

The strong set of FY24 results reflect our strategically located metropolitan assets which have limited exposure to cyclical and discretionary retail expenditure.

HDN continues to benefit from portfolio occupancy of over 99%, collect over 99% of billed rent, and maintain sector-leading positive re-leasing spreads of 6.0%.

He added that strong net operating income across the portfolio supports asset values despite a modest easing in capitalisation rates.

The company also seeks to grow its asset base. HomeCo Daily Needs fund manager Paul Doherty highlighted the company's low gearing, which he believes provides a solid platform for undertaking asset recycling and organic growth. 

2.4% growth in dividends guided for FY25

HomeCo Daily Needs anticipates stable earnings growth for the new financial year. The company guided for a 2.3% growth in its FFO to 8.8 cents per unit.

This growth will flow down to its distribution, which management aims to increase by 2.4% to 8.5 cents per unit. This indicates a distribution yield of 6.8%, which appears attractive.

HomeCo Daily Needs securities are valued at a 14% discount to its NTA.

The post HomeCo Daily Needs REIT reports resilient FY24 results appeared first on The Motley Fool Australia.

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Motley Fool contributor Kate Lee 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 HomeCo Daily Needs REIT. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Global X Semiconductor ETF (ASX: SEMI) has had a rough month, with its unit price sliding almost 15% in value. While the ETF is still up 37% from a year ago, this is one of the biggest declines in recent times.

The Global X Semiconductor ETF has been under pressure due to global market jitters and concerns about slowing demand for technology products. Additionally, there's worry that excitement about artificial intelligence (AI) has caused the prices of some AI-related shares to go up a little too much.

For investors, this sharp drop raises an important question: Is this exchange-traded fund (ETF) on the verge of a rebound?

Let's find out!

Investing in global leaders in the semiconductor industry

The Global X Semiconductor ETF aims to invest in leading companies involved in the design, manufacturing, and sale of semiconductors. These tiny chips are the backbone of modern technology, powering everything from smartphones and computers to electric vehicles (EV) and renewable energy systems.

The SEMI ASX ETF provides diversified exposure to various global semiconductor giants. This diversification helps to spread risk while allowing investors to tap into the growth potential of an industry that is crucial to the global economy.

As of 12 August, the five largest holdings of the SEMI ETF are as follows:

• Taiwan Semiconductor Manufacturing Co Ltd (TPE: 2330): 11.38% of net assets
• Broadcom Inc (NASDAQ: AVGO):10.64% of net assets
• ASML Holding (NASDAQ: ASML): 9.89% of net assets
• Nvidia Corp (NASDAQ: NVDA): 9.72% of net assets
• Advanced Micro Devices Inc (NASDAQ: AMD): 6.61% of net assets

The ETF charges management costs of 0.45% per annum. While this is higher than many other ASX ETFs, it is slightly cheaper than the Betashares Nasdaq 100 ETF (ASX: NDQ), which charges 0.48% and provides technology sector focus, similar to the SEMI ETF.

All the eyes are on Nvidia's upcoming quarterly result

Nvidia's results announcement, scheduled for 28 August, will be the next important event for investors in the semiconductor sector.

While global technology companies such as Google parent Alphabet and EV giant Tesla have reported mixed earnings so far, it's important to note that many of them emphasised their continued investment in AI infrastructure and data centres.

In addition to actual business outcomes from Nvidia, there will be many valuable comments related to the overall semiconductor and AI industry, which would help investors understand where we stand in this AI journey.

For those with an eye on the future, I think SEMI's recent dip might present a buying opportunity. The semiconductor industry is known for its cycles, and downturns often set the stage for strong recoveries. Despite short-term uncertainties, the long-term outlook for semiconductors remains strong as the AI transformation continues.

The post Down nearly 15% in a month, is this ASX ETF ready for a bounce? appeared first on The Motley Fool Australia.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Motley Fool contributor Kate Lee has positions in ASML and Nvidia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended ASML, Advanced Micro Devices, Alphabet, BetaShares Nasdaq 100 ETF, Nvidia, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Broadcom. The Motley Fool Australia has positions in and has recommended BetaShares Nasdaq 100 ETF. The Motley Fool Australia has recommended ASML, Advanced Micro Devices, Alphabet, and Nvidia. 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 Small Ordinaries Index (ASX: XSO) has fallen 5% in 7 trading days in August, erasing all its gains year-to-date.

If you're looking for ASX small-cap ideas, now may be a good time to bargain-hunt good companies.

For those wanting to have exposure to the small-cap sector without taking too much risk, companies at cheap valuations might be a good option.

It's even better if they are consistent dividend payers, as dividend-paying companies tend to have solid cash flow and balance sheets.

Here are two such ASX small caps that might be worth consideration today.

GR Engineering Services Ltd (ASX: GNG)

Founded in 2006, GR Engineering provides engineering consulting and contracting services in the mining and mineral processing sectors. Its services encompass the project life cycle, from the initial study phase to design, construction, commissioning, and operational support.

As a mining services company, GR Engineering wasn't immune to the adverse impact of global commodity price weakness, which hit the ASX mining sector. Its share price took a hit when its client, BHP Group Ltd (ASX: BHP), announced a temporary suspension of its West Musgrave Project in July 2024.

Unfortunately, this was one of the large projects GR Engineering was engaged in. Management forecasts that the project suspension will affect its projected FY25 revenue by up to $80 million.

This is nearly 20% of the company's revenue in the last 12 months, and there's no denying this is substantial. However, it is largely a one-off event that happens in a cyclical industry. Surely, upcycle will return, lifting many mining and mining services shares.

GR Engineering has a strong balance sheet with an ample cash balance of $58.4 million, equivalent to 18% of the company's current market capitalisation.

GR Engineering shares are valued at 11x its trailing 12 months' earnings-per-share (EPS), offering a dividend yield of 10%.

The GR Engineering share price closed at $1.90 on Friday.

Aspen Group Limited (ASX: APZ)

Aspen Group is a diversified property group specialising in providing affordable accommodation solutions across Australia. The company owns and operates a portfolio of residential and retirement communities, as well as holiday parks.

Unlike the mining sector discussed above, the affordable housing sector has shown resilience even during economic downturns. Aspen Group's strategic focus on affordable accommodation positions it well to benefit from the country's ongoing housing supply shortage.

Its business model focuses on generating recurring rental income from its property assets, which provides a steady income stream. In addition, Aspen Group continues to explore growth opportunities through property developments and enhancements. This proactive approach enhances the company's growth prospects.

Although the Aspen Group share price has risen 9% since the end of May 2024, the company is still valued at 0.9x its book value.

Aspen Group offers an attractive dividend yield of 4.34% today.

The Aspen Group share price closed at $1.96 on Friday.

The post 2 ASX small caps to consider for high yields and bargain prices appeared first on The Motley Fool Australia.

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Motley Fool contributor Kate Lee 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 Aspen Group. The Motley Fool Australia has recommended Aspen Group and Gr Engineering Services. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The HomeCo Daily Needs REIT (ASX: HDN) unit price has not performed well recently, rising just about 3% in the past year.

In fact, its current price is more than 5% below its initial public offering (IPO) price of $1.33 in November 2020.

This real estate investment trust (REIT) may have lost investor interest during the surge of growth shares in recent times. But as the global stock markets jitter, is now a good time to reconsider this cheap ASX REIT?

Let's find out!

Stable business

HomeCo Daily REIT invests in neighbourhood retail and large-format retail assets. Its tenants include household names like Woolworths Group Ltd (ASX: WOW), Coles Group Ltd (ASX: COL) and Wesfarmers Ltd (ASX: WES).

Having such solid tenants, the ASX property company boasts more than 99% occupancy rate and rent collection.

HomeCo Daily Needs reported robust numbers in 1H FY24, with its property net operating income (NOI) increasing 4% from a year ago to $136.1 million. Its net tangible asset (NTA) was $1.44 per unit at the end of December 2023.

More recently, in June 2024, the company reported a 2% increase in its NTA as it booked a valuation gain. It also reaffirmed FY24 guidance for distribution per unit at 8.3 cents.

HomeCo Daily Needs CEO Sid Sharma highlighted the company's resilience, saying:

The positive revaluation gains for the half reflects HDN's high exposure to defensive and non-cyclical expenditure and megatrends driving tenant and customer demand for our assets.

Whilst the existing asset base is generating strong underlying net income growth, HDN's accretive development pipeline continues to create additional value for our unitholders.

Attractive valuations

The June update implies that its NTA is now at about $1.46 per unit, up 2% from its value in December 2023. Using today's unit price, this represents a price-to-book value of 0.84.

In other words, the REIT is trading at about a 16% discount on the value of its asset holdings, which seems attractive.

Using the company's DPS guidance of 8.3 cents for FY24, HomeCo Daily Needs currently offers a distribution yield of 7%.

Morgans also noted the stability and valuation merit of HomeCo Daily Needs, as my colleague James highlighted. Analysts at Morgans said:

The portfolio has resilient cashflows and continues to be a beneficiary of accelerating click & collect trends. +80% of tenants are national and ~75% of tenants offer click & collect reinforcing the importance of assets being able to support 'last mile logistics'.

Sites are also in strategic locations with strong population growth (+80% metro). HDN offers an attractive distribution yield and the development pipeline provides growth opportunities.

I tend to agree with the statement above. HomeCo Daily Needs can be a good addition to passive-income-focused investment portfolios at current prices, in my view.

The HomeCo Daily Needs REIT unit price was up 0.4% to $1.22 at the close of trading on Thursday.

The post With a 7% dividend yield, is this ASX REIT too good to ignore? appeared first on The Motley Fool Australia.

More reading

• How much could a $50,000 ASX share portfolio pay in dividends?
• 5 ASX dividend shares I'd buy for a second income
• 3 ASX dividend shares to buy for 5.8%, 7%, and 10% yields
• The ASX dividend stocks I'd trust for long-term income
• 3 ASX dividend shares I'd buy for reliable passive income

Motley Fool contributor Kate Lee 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 HomeCo Daily Needs REIT. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.