Stock Pick

  • Is it time to buy BHP shares right now?

    model construction workers working on increasing pile of coins, asx 200 building shares, boral share price

    The BHP Group Ltd (ASX: BHP) share price climbed 1% yesterday while the S&P/ASX 200 Index (ASX: XJO) edged 0.03% higher to 5,944.50 points.

    While the S&P/ASX 200 Materials (+1.68%) sector shares like BHP provided some strong gains, this was largely offset by a soft performance from the S&P/ASX 200 Info Tech (-1.76%) and S&P/ASX 200 Industrials (-2.35%) sectors.

    One good day doesn’t necessarily make BHP a good investment, but is it worth another look at its current price?

    Is it time to buy BHP shares?

    I think BHP is an interesting company to look at buying right now. It’s currently the largest ASX share by market capitalisation and the Aussie miner is worth an incredible $167.6 billion.

    The BHP share price has fallen 9.2% in 2020 but is starting to gain some momentum. BHP hit a new 52-week low of $24.05 in mid-March before nearly doubling to its current $35.36 valuation.

    That means that many of the potential gains have been snapped up by brave investors in the recent bear market.

    I think a lot of the potential BHP share price growth lies with fiscal policy in 2020 and 2021. If the government turns to infrastructure to fast-track an economic recovery that could be good news for BHP.

    More construction means more steel, which means more demand for key inputs like iron ore. Government work is about as reliable as it gets, which means BHP shares could climb higher if we see some serious new investment.

    The BHP share price is up 24% in the last 5 years, and I don’t think BHP is super cheap at $35.36 right now. However, with a company as old and large as BHP, you also have to account for dividends.

    BHP is currently yielding a tidy 6% dividend, which is handy income for any retiree or even young investors looking to re-invest their gains for long-term growth.

    Foolish takeaway

    If you like reliable dividends then I think BHP shares could be a solid addition to a well-diversified portfolio.

    The short-term outlook for iron ore prices is strong and the Aussie miner has been a blue-chip dividend share for decades.

    Of course, nothing is guaranteed and it’s wise to only buy if you’re willing to hold on a long-term investment horizon.

    For more investment options at a good price, check out these 5 ASX shares today!

    5 stocks under $5

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    Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

    The post Is it time to buy BHP shares right now? appeared first on Motley Fool Australia.

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  • Coronavirus second wave potential drives investment portfolio changes

    lady walking through empty airport to travel

    Over the past few days, it has dawned on me that the coronavirus situation is unlikely to change anytime soon. Like most other people I thought we would find ourselves opening up our own borders. Then opening up to New Zealand, and then slowly to the rest of the world.

    However, judging by Victoria, things are not looking like they will play out this way. If we are going to continue managing this in a conservative manner then we may be taking 2 steps forward and 1 step back potentially for a very long time.

    While none of us can really do anything about that, we can definitely shape our investment portfolios to match our circumstances. 

    Local travel

    I think that Alliance Aviation Services Ltd (ASX: AQZ) is going to be the only airline to make anywhere near decent earnings over the short term. Coronavirus makes it seem unlikely we will open all our borders and keep them open. Big carriers like Qantas Airways Limited (ASX: QAN) carry overheads that are designed for a much larger operation.

    The other likely beneficiary of local travel is likely to be Bapcor Ltd (ASX: BAP), a distributor of car parts and services. 

    Discretionary items

    The likelihood of large venues opening and staying open until coronavirus has been defeated is also small I feel. This rules out a lot of the fast fashion purchases from Lovisa Holdings Ltd (ASX: LOV). Even though I think its sales will increase compared with April and May.

    I think we will continue to see good sales volumes through shops like Bunnings and Officeworks; businesses owned by Wesfarmers Ltd (ASX: WES). Wesfarmers also owns Catch, an online marketplace it recently purchased. Catch has increased its sales turnover by 68.7% in H2 FY20 so far against the previous corresponding period.

    Payment processing

    Depending on your investment horizon it may still be too soon to invest in shares like the Commonwealth Bank of Australia (ASX: CBA). In fact, I would be cautious of any share requiring long-term credit commitments of the general public.

    However, short term credit organisations like Afterpay Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P) will likely continue to do well. Payment processing companies like Tyro Payments Ltd (ASX: TYR) will also continue to do well. None of these companies operate in a market that requires a total economic reopening. 

    Foolish takeaway

    The recent surge of coronavirus infections in Victoria has forced us to temper our expectations of how quickly we can open up the economy and our borders. I would consider focussing your investment portfolios on companies that have thrived over the past few months, rather than on companies that need a flawless return to normality. This isn’t meant to be negative, the market always throws us opportunities.

    If you are more interested in shares likely to see explosive growth, make sure to check out our free report.

    3 “Double Down” stocks to ride the bull market higher

    Motley Fool resident tech stock expert Dr. Anirban Mahanti has identified three stocks he thinks can ride the bull market even higher, potentially supercharging your wealth in 2020 and beyond.

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    Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Tyro Payments and ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended Bapcor. The Motley Fool Australia owns shares of AFTERPAY T FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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  • Macquarie and 2 other ASX shares you’re missing out on

    shares high

    Macquarie Group Ltd (ASX: MQG) is one of several ASX shares gaining in value in recent times.

    The Macquarie share price has rocketed 9.7% higher in June but remains down 12.5% for the year. That is the sweet spot that I’m focusing on at the moment: ASX shares with positive momentum that could still be undervalued.

    Here’s why Macquarie and a couple of others could be the secret gainers you’re missing out on right now.

    3 ASX 200 shares gainers you’re missing out on today

     Of course, it’s not as simple as just buying shares that have fallen lower in 2020. There have to be some fundamentals behind a decision to buy or sell an investment. I think this exists with Macquarie.

    The Macquarie share price has been climbing higher in recent months. While I don’t have a crystal ball, I do think Macquarie’s status as an investment bank could pay dividends this year.

    Macquarie has several investment arms including Macquarie Capital and Macquarie Investment Management.

    Those divisions could prove to be a double-edged sword. But I think recent market volatility could be a good thing for Macquarie’s investment teams to outperform.

    That means the ASX 200 share could be a dark horse to announce a strong half-year result in October or November.

    However, I’ve got my eye on more than just Macquarie right now. I’m also looking at the DEXUS Property Group (ASX: DXS) share price after its recent bullish run.

    The DEXUS share price is up 10.2% in June but remains down 13.1% for the year. Dexus owns and operates a significant portfolio of Australian property with a strong focus in office and industrial real estate.

    There could be some tough times ahead for office real estate with many companies still operating on a work from home model. That could drive down demand (and rent) which is bad news for ASX 200 REIT shareholders.

    However, if we see a quicker bounce back to office culture, DEXUS could be a strong buy. Investors have been buying up DEXUS shares in recent months but it could prove to be a cheap income share at its current price.

    Bendigo and Adelaide Bank Ltd (ASX: BEN) is another ASX 200 share that could be in the buy zone. The Bendigo Bank share price has rocketed 17.1% higher in June but is down 26.4% from where it started in 2020.

    While changing office dynamics might be a headwind for the DEXUS share price, it could be good for Bendigo. More Aussies could look to move rural if office working arrangements become more flexible.

    That could be good news for the ASX 200 bank share if regional centres see an uptick in growth. These things are far from certain right now but I’d be watching the Bendigo Bank share price closely in the second half of the year.

    If you’re looking for cheap shares right now, have a read of our recent report below.

    5 ASX stocks under $5

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    Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

    The post Macquarie and 2 other ASX shares you’re missing out on appeared first on Motley Fool Australia.

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