As we head into August 2024, several ASX stocks are garnering attention for their promising outlooks and upcoming projects. This list highlights companies with ongoing developments and potential positive news, such as clinical trial results. While not exhaustive, these selections represent stocks with strong growth potential, making them worthwhile considerations for patient investors.
- Universal Store (ASX: UNI)
Year-to-Date: 36.5%; Market Capitalization: $444.98 million
Universal Store, a chain of casual clothing stores, targets Millennial and Gen Z consumers, or people in their 18–35 age range. With 79 locations throughout Australia, most of which are found at large malls, Universal Store also has about 20 stores that are dedicated to carrying specific brands, such as Perfect Stranger. Approximately 14% of the company's sales are made online. In-house sales occur for both proprietary brand products and carefully chosen third-party products, even as the former is more common.
Although it is a solid business, the notion that its clients will reduce their spending due to the impact of the cost of living problem has hurt its bottom line. The items spent by them (reported to have cost over $60 million at the concerts alone) and the recent performances by Taylor Swift and Beyonce, in our opinion, demonstrate that they are willing to spend money when they see the value.
While like-for-like sales increased by just 1.2% in FY23, overall sales increased by $263.1 million, or 26.5%. It produced a net profit tax of $23.6 million, up 15%, and underlying earnings before interest and tax (EBIT) of $40.4 million, up 24%. Not too terrible considering the growing interest rate landscape. This resulted from the company's improved ability to control inventory and reduce operating expenses. In the upcoming year, as the Stage 3 Tax Cuts take effect, we anticipate continued growth. Customers of Universal Store will have more money in their pockets thanks to the updated bundle and this could support the share price over the long run.
- Capricorn Metals (ASX: CMM)
Year-To-Date: 16.23%; Market Capitalization: $2 billion
It would be impossible for us to compile a list of the top ASX stocks for June 2024 without mentioning a gold stock. With one gold mine already in production and one on the verge of becoming even greater, Capricorn Metals is in a unique position in the gold industry. The Karlawinda Gold Mine, located in the Pilbara region of Western Australia, produces more than 100,000 ounces annually. And within the next few years, the Mt. Gibson project will go into production. In particular, Capricorn hopes to start production in less than a year after finishing the recently started permitting process.
The business has estimated that it has 1.45 million metric tons of ore reserves, with an NPV of A$828 million and a free cash flow of A$1.2 billion. For the first seven and a half years of the mine's ten-year lifespan, an average of 152 kozpa is projected. All of the development's funding, A$258 million, is secured through December 2023. This allows them to focus on what is important and supporting shareholder returns over the long run.
- Metals Acquisition (ASX: MAC)
Year-To-Date: 7.7%; Market Capitalization: 1.5 billion
Let's now examine Metals Acquisition, a copper miner. The company is not just any copper miner; rather, it is the owner of one of Australia's most well-known copper mines. Specifically, it purchased the Cornish, Scottish, and Australian (CSA) copper mine from Glencore in June 2023. The first owners' nationalities inspired the name of the mine. For nearly 60 years, CSA has been producing high-grade copper. It is located 11 km northwest of the NSW town of Cobar. 38–43,000 t in 2024, 43–48,000 t in 2025, and 48–53,000 t in 2026 are the company's projections.
The project's short estimated lifespan of 2029 was one of its drawbacks. That is, until it made an upgrade to its Resource last month, allowing for a 2034 life extension. It possesses 8Mt of copper at 5.2% for 413,000t. Measured and indicated at 4.9% for 229kt of copper is 4.7Mt. Although there hasn't been much research done away from established deposits, the business has said it might go down this path. While the price of copper has fluctuated since the start of the year, it is now at levels it hasn't been in two years and is predicted to be crucial to the decarbonization process. It is also not surprising that this corporation may purchase further assets, possibly even neighboring Aurelia (ASX: AMI).
- Breville (ASX: BRG)
Year-to-Date: 3.5%; Market Capitalization: 4.1 billion
This company shares a list of the top ASX stocks to purchase in June with Universal Store, which is one of the reasons it is included. Specifically, the Stage 3 tax cuts may cause discretionary spending to rise over the medium term, boosting its share price further after rising by 8% in the last three months. Because of the earnings of financial year sales, it might even reap a windfall in June before July. Breville, distributes high-end kitchen equipment to middle-class and upper-class consumers, bringing in around $1.5 billion in sales annually in more than 100 countries. Breville has given investors only a range of expectations for FY24 guidance but earnings before interest and tax is set to increase from 5 to 7.5%.
While many ASX stocks have had strong performances in recent months, the companies highlighted here show particular promise for continued growth and revenue increases. With favourable market conditions and strategic initiatives in place, these stocks could offer attractive opportunities for investors looking to capitalise on their potential in the medium term. As always, thorough research and consideration of individual risk tolerance are essential when making investment decisions.
