Question 1: Our son is establishing a share portfolio of stocks and asked which of these two stocks you would add now, Woodside (WDS) or Coles (COL)?
Answer: I wouldn’t compare a supermarket chain (Coles) to an energy stock (Woodside) as they have totally different drivers. In terms of establishing a portfolio, it really depends on how much money he has to spend and the other stocks in the portfolio. Putting these questions to one side, if the driver is long-term growth and he is not going to be too concerned about volatility, at these prices, I would go for Woodside. If the driver is income and limited volatility, I would go for Coles.
On broker targets, they see more potential upside with Woodside (target price of $33.80, which is approximately 34% higher than the last ASX price of $27.24), compared to Coles with just 1.1% upside (target price $17.53 compared with the last ASX price of $17.35). But there is more risk with Woodside.
Question 2: What is your forecast for Arcadium Lithium (LTM)?. I’m holding it but it is down 36% of my buy price.
Answer: The brokers remain bullish on Arcadium Lithium (LTM), with a consensus target price of $9.43, approx. 86% higher than the last ASX price of $5.06. The range of targets according to FN Arena is tight – from a low of $9.40 through to a high of $9.50.
Obviously, there are quite diverging views about the lithium market, and short positions in some of the lithium stocks are very high. In Arcadium’s case, there is reportedly a short seller’s report in the public arena that is attracting attention.
I prefer Pilbara Minerals (PLS) to Arcadium, but both are speculative.
Question 3: I read your recent article about the government’s super co-contribution (see https://switzerreport.com.au/5-super-actions-to-take-before-the-end-of-the-financial-year-3/). If I put in $1,000 into my grandson’s super account as a non-concessional contribution, will he automatically get the $500 co-contribution from the Government?
Answer: Yes, the co-contribution is automatic. It is paid by the Government (via the ATO) to the super fund after the lodgement of your grandson’s tax return and the super fund accounts. The thing to remember is that your grandson’s total income must be less $43,445 and critically, at least 10% of this must be from an employment source (i.e. wages for working).
Question 4: ZIP Co (ZIP) has risen nicely over the past week to $1.44. What are your thoughts going forward on this stock?
Answer: ZIP has had a really nice run, up 124% in calendar year 2024. At $1.44, it is getting close to the broker target price of $1.50 (range according to FN Arena is a low of $1.40 through to a high of $1.55). While Zip is a potential takeover target, I don’t personally see a big future for BNPL stocks and think if I had purchased Zip at lower prices, I might be inclined to take some profits.
