ASX Ltd (ASX)

Trading Ideas – Position Updates

We start the week with three open positions, note the stops have been raised:

Shawn’s Trade Idea: ASX Ltd (ASX) $58.00

ASX Limited (ASX: ASX) $58.30

ASX has been a poor performer over the past 4 years, down ~40%,  and much of the damage has been self-inflicted. The failed first attempt to replace CHESS, ballooning technology spend, rising costs and increased regulatory scrutiny have steadily eroded confidence in what should be one of Australia's highest-quality financial infrastructure businesses. But after years of disappointment, there are signs the worm may finally be turning.

ASX Ltd (ASX: ASX) $60.52

ASX +9.03%: delivered a better-than-expected FY26 result and an encouraging start to FY27, sending shares up as much as 13% and reversing much of the weakness following May's cost update. The key positive was broad-based revenue strength, particularly across listings and cash trading, while management highlighted its strongest listings pipeline in several years and solid early FY27 trading volumes. 

ASX Ltd (ASX:ASX) $51.03

ASX -13.23%: was smashed after outlining a materially higher cost and investment profile into FY27, with the market reacting negatively to rising compliance, technology and remediation spending following the ASIC inquiry. 

ASX Limited (ASX) $66.18

The ASX is a stock we have often thought would fit the Active Income Portfolio well. While its yield may be lower than our target, we offset that by holding some positions with a yield higher than our target, with the ASX making up for it by improving the quality and certainty of earnings.

ASX Ltd (ASX) $58.14

ASX -8.01%: the operator of the Australian exchange fell to 6-month lows today after cost and capex guidance missed expectations. The company expects costs to grow 15% in FY24, right at the top end of guidance, while capex is expected to be $135m for the year, above the midpoint of guidance at $110-140m. They also expect cost growth of 6-9% in FY25, largely in line with expectations though coming from a higher base and capex guidance for FY25 is 30% above consensus at the midpoint.

ASX Ltd (ASX) $65.12

ASX -4.00%: the operator of the domestic share market struggled as costs weighed on the 1H result. Revenue of $511.7m was up marginally on 1H23 but EBIT fell more than 10% to $291m, around 5% below consensus. The ASX has been bleeding money as they work on upgrading the ageing CHESS system, a project they finally brought consultants in to manage last year.

ASX Ltd (ASX) $57.33

Shares in the ASX slipped another -0.4% yesterday as it continues to trade around 5-year lows, not a big move in current times but another great example of the weak getting weaker with the stock now down ~40% over the last 18 months.

ASX Ltd (ASX) $60.64

We had previously written favourably about the ASX Ltd (ASX) back in March here, adding it to the Hitlist with the conclusion being that the defensive earnings & income were attractive for the Income Portfolio. While we had not pulled the trigger and bought the stock, we were gaining more confidence that the worst could be behind the market operator, which was the clear impression we got from the company’s last update (before yesterday).