Another ASX reporting season has ended, allowing investors to consider what implications might be afoot for the ASX shares on their radar or in their portfolios.
A great attribute of public companies is the level of transparency that must be maintained. Almost anyone can pick up an annual report, read a few key sections, and learn an enormous amount about a company's operations and current position.
The information can help make an informed decision about which companies are worth investing in. However, the downside is that it can take some time out of a busy schedule to flick through several corporate reports.
Fortunately, our Foolish writers have been busily reading and writing about ASX results throughout August. With fresh knowledge at the ready, we asked the team what their top ASX share picks are as we emerge from earnings season.
Here is what they told us.
7 top ASX shares for September 2024 (smallest to largest)
- Global X Semiconductor ETF (ASX: SEMI), $301.70 million
- Lovisa Holdings Ltd (ASX: LOV), $3.52 billion
- Super Retail Group Ltd (ASX: SUL), $4.06 billion
- NextDC Ltd (ASX: NXT), $9.87 billion
- Qantas Airways Limited (ASX: QAN), $11.19 billion
- Telstra Group Ltd (ASX: TLS), $45.41 billion
- BHP Group Ltd (ASX: BHP), $204.63 billion
(Market capitalisations as of market close 3 September 2024)
Why our Fool writers love these ASX stocks
Global X Semiconductor ETF
What it does: The Global X Semiconductor ETF is an exchange-traded fund that invests in a basket of global stocks that dominate the semiconductor industry around the world, whether that be by production or use.
By Sebastian Bowen: This ASX ETF caught my eye in August. Thanks to the pandemic, most of us would now be aware, if we weren't before, of the pervasiveness of semiconductor technology in everyday life. Name an electronic appliance, whether that be a television, phone, car, or refrigerator, and chances are it will have a semiconductor chip inside of it.
Whilst the global economy has been swamped by semiconductors over the past few decades, I think this industry isn't even close to reaching its full potential. This trend alone is one I'd be happy to invest in.
But bolstering my enthusiasm is this ETF's holdings, which consist of many of the best and most exciting companies in the world. The Global X Semiconductor ETF counts the likes of Taiwan Semiconductor Manufacturing Company, NVIDIA, Broadcom and AMD amongst its largest constituents.
This ASX ETF has returned close to 20% per annum over the past three years (as of 30 August). While I'm not banking on that return to continue, I wouldn't be surprised if it did.
Motley Fool contributor Sebastian Bowen owns shares of Intel Corp.
Lovisa Holdings Ltd
What it does: Lovisa is a retailer of affordable jewellery with a global store network across countries like Australia, the United States, France, and Germany.
By Tristan Harrison: The Lovisa share price has dropped more than 10% since 23 August 2024 following the FY24 result. The result included everything I wanted to see from the company for it to achieve long-term success.
It added 99 stores to its global network, reaching 900 by the end of the 2024 financial year. Revenue rose 17.1% to $698.7 million, which is a strong growth rate in my opinion. Total sales in the first eight weeks of FY25 continued to be positive, with year-over-year growth of 12.7%.
Net profit after tax (NPAT) growth of 20.9% to $82.4 million and operating cash flow growth of 27.6% to $240.4 million demonstrated the company's operating leverage, which justifies its ongoing focus on rolling out more stores worldwide.
It has recently entered several new markets, including Ireland, China, Vietnam, Ivory Coast, and the Republic of Congo. Expanding into these countries significantly expands the total addressable market and lengthens the growth runway.
As a bonus, the company increased its final dividend by 19% to 37 cents per share, showing that shareholders can receive strengthening passive income while investing significantly in store expansion, operational improvements, and its e-commerce offering.
Motley Fool contributor Tristan Harrison owns shares of Lovisa Holdings Ltd.
Super Retail Group Ltd
What it does: Home of iconic brands such as Supercheap Auto, Rebel, BCF, and Macpac, Super Retail Group is one of Australia's largest listed companies in the retail industry. Serving customers across 759 stores, Super Retail is a mainstay to millions of people for all things automotive and outdoors.
By Mitchell Lawler: The Super Retail Group share price is around its highest point ever, yet I'd argue there is still significant upside potential.
Firstly, the company wields some of Australia's most recognisable retail brands. The immense brand value behind Supercheap Auto and Rebel makes it incredibly difficult for new entrants to take share.
Secondly, Super Retail Group's FY24 results were reasonably impressive. Total sales growth of 2% and a 9% decline in statutory net profits after tax may not sound solid, but compared to the rest of the retail herd, it's quite resilient.
I anticipate this ASX-listed retailer is primed to take a bigger slice of the market if further economic weakness plays out.
Motley Fool contributor Mitchell Lawler does not own shares of Super Retail Group Ltd.
NextDC Ltd
What it does: NextDC develops, owns and operates data centres in Australia, New Zealand and Southeast Asia. The company provides physical centres, cooling, power, and security services. NextDC also offers optional technical and project management support.
By Bernd Struben: Between the growth of traditional cloud computing, cryptocurrencies and the rapid advancement of AI, demand for data centres has been soaring.
And that's likely to persist, with Moody's forecasting 100% plus growth in APAC data centre capacity by 2028.
I believe NextDC is in the sweet spot here. Having completed a $1.3 billion capital raise earlier this year, NextDC is well-funded for the accelerated development and fit-out of its core data centre assets.
The NextDC share price is up 25% in 12 months. But shares have fallen since the company reported its FY 2024 results on 28 August, despite NextDC meeting the higher end of its FY 2024 guidance, with net revenue up 10% to $307.9 million
Investors appear to have reacted negatively to the company's softer-than-expected FY 2025 guidance for net revenue ranging between $340 million and $350 million.
But this is still a growth stock we're looking at here. Given the recent share price retrace, I believe this is a top stock to buy in early September.
Motley Fool contributor Bernd Struben does not own shares of NextDC Ltd.
Qantas Airways Limited
What it does: Qantas is Australia's flag carrier airline operating through the Qantas and Jetstar brands. It also has a highly profitable Qantas Loyalty business and a freight business.
By James Mickleboro: Although Qantas' shares have been on fire this year, I still believe they are undervalued. This is because I think the market is still not fully valuing the company's structurally stronger earnings following its post-COVID transformation.
And with dividends expected to return during the new financial year for the first time since FY 2019, its shares look set to be a great source of income.
For example, Goldman Sachs believes that 30 cents per share dividends will be paid in FY 2025, FY 2026, and FY 2027. Based on the current Qantas share price of $6.87, this would mean dividend yields of 4.35%.
Goldman also sees further upside for its shares with its conviction buy rating and $8.05 price target. Combined, this will mean very attractive total returns for investors if the broker is on the money with its recommendation.
Motley Fool contributor James Mickleboro does not own shares of Qantas Airways Limited.
Telstra Group Ltd
What it does: Telstra is Australia's largest telecommunications provider. Its penetration of the mobile and telecom market is high, boasting around 23 million retail mobile customers and around 3.5 million data bundle customers. Telstra also provides critical infrastructure and bandwidth for other service providers.
By Zach Bristow: Telstra's deep customer networks and essential service lines in mobile telecommunications provide the company with recession-proof earnings, especially considering the recurring NBN payments it will receive over the coming years.
In my view, the resilience of Telstra's profits adds to the long-term appeal of its dividend, which is also a standout for the long-term investor.
For instance, Goldman Sachs likes Telsta's lower-risk earnings profile and prospective dividend growth.
Goldman says that coupled with the recurring NBN payments it will receive moving forward, the telecom giant still looks undervalued. It has a price target of $4.35 apiece on Telstra, indicating a 10% potential price return.
Goldman also expects the telco giant to pay $2.1 billion in dividends this year, or 18 cents per share, stretching to 19.5 cents per share in FY26. At the current share price, this equates to a yield of 4.5%, bringing the total shareholder return to 14.5% this financial year if Goldman's projections are correct.
Motley Fool contributor Zach Bristow does not own shares of Telstra Group Ltd.
BHP Group Ltd
What it does: BHP is the world's biggest mining company by market capitalisation. It produces iron ore, metallurgical coal, and copper and is expanding into potash.
By Bronwyn Allen: BHP is one of those quintessential blue-chip ASX 200 stocks that most long-term investors love to hold in their portfolios. But the stock price has fallen by more than 20% this year, as the iron ore price has declined due to less demand from China. However, this isn't dissuading the experts from recommending we buy BHP shares.
Goldman Sachs retained its buy rating on BHP shares after the miner released its FY24 results last month. The broker also raised its 12-month price target to $49.10, implying a potential 22% upside for investors. Goldman likes BHP's superior margins and its major, expanding exposure to copper, which will be a key commodity in the green energy transition over the coming decades.
Indeed, BHP CEO Mike Henry says they have the largest copper resources of any miner in the world. Another broker that is also bullish on BHP is Morgans. It has an add rating and a $48.30 price target.
Motley Fool contributor Bronwyn Allen owns shares of BHP Group Ltd.
