Stock Pick

  • Macquarie picks the best stocks to buy for the post COVID-19 rebound

    Winners Cup Trophy

    The S&P/ASX 200 Index (Index:^AXJO) is heading for its best session this month on growing optimism that the global economy is finally on the path to recovery.

    Markets may have passed peak COVID-19  pain and investors should be reassessing their ASX share portfolio to best position themselves for the post pandemic world.

    If you are looking for clues on the stocks you should and shouldn’t hold, Macquarie Group Ltd (ASX: MQG) may have some answers as its analysts looked at stock returns in the 1990 recession.

    Doesn’t repeat but rhymes

    That was the recession we had to have where the unemployment rate jumped to over 10%. Economists expect a similar outcome for the job market during this coronavirus-inspired recession.

    “We still think the market is in a range, as valuations limit upside. But without a second wave of Covid-19 and shutdowns, the worst of the contraction may have passed, and March 23 is the low,” said the broker.

    “This puts us in Late Contraction; that part of the recession where stocks often go up even when unemployment rises above 10% as it did months later in 1990-91.”

    Go overweight on resources

    One sector that the broker is overweight on during this part of the market cycle is resources. The BHP Group Ltd (ASX: BHP) share price outperformed during the recession two decades ago and Macquarie thinks this will happen again.

    Mind you, it’s not only BHP but also the other iron ore producers that Macquarie are tipping to be big winners this time round. This means you should add Rio Tinto Limited (ASX: RIO) and Fortescue Metals Group Limited (ASX: FMG) to the list as well.

    This is because the group is expected to generate strong free cash flows that can be used to pay dividends.

    Gold standard

    Gold miners also found a place in Macquarie’s model portfolio. The broker added Evolution Mining Ltd (ASX: EVN) and Saracen Mineral Holdings Limited (ASX: SAR) to its overweight list.

    Another sector to find favour is communications as media stocks outperformed in the last recession. Macquarie is backing NEWS CORP/IDR UNRESTR (ASX: NWS) over Nine Entertainment Co Holdings Ltd (ASX: NEC), and is keeping its bullish view on Telstra Corporation Ltd (ASX: TLS) for its defensive qualities.

    Bet on consumers

    Macquarie is also encouraging investors to increase their exposure to consumer discretionary stocks as cyclical stocks tend to outperform in a recovery. Stocks highlighted by the broker are Crown Resorts Ltd (ASX: CWN), Wesfarmers Ltd (ASX: WES) and Aristocrat Leisure Limited (ASX: ALL).

    Sectors to avoid

    On the flipside, Macquarie is recommending investors go underweight on financials, healthcare and technology.

    It is also suggesting investors reduce their exposure to Australian real estate investment trusts (AREITs).

    The experts at the Motley Fool have picked other winners to back in the rebound!

    5 “Bounce Back” Stocks To Tame The Bear Market (FREE REPORT)

    Master investor Scott Phillips has sifted through the wreckage and identified the 5 stocks he thinks could bounce back the hardest once the coronavirus is contained.

    Given how far some of them have fallen, the upside potential could be enormous.

    The report is called 5 Stocks For Building Wealth after 50, and you can grab a copy for FREE for a limited time only.

    But you will have to hurry — history has shown the market could bounce significantly higher before the virus is contained, meaning the cheap prices on offer today might not last for long.

    See the 5 stocks

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    Motley Fool contributor Brendon Lau owns shares of Aristocrat Leisure Ltd., BHP Billiton Limited, Macquarie Group Limited, Rio Tinto Ltd., and Telstra Limited. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited and Telstra Limited. The Motley Fool Australia owns shares of Wesfarmers Limited. The Motley Fool Australia has recommended Crown Resorts Limited and Nine Entertainment Co. Holdings 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 picks the best stocks to buy for the post COVID-19 rebound appeared first on Motley Fool Australia.

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  • Moderna Prices $1.3B Equity Offering at $76/Share

    Moderna Prices $1.3B Equity Offering at $76/ShareModerna (MRNA) has now priced an underwritten public offering of 17,600,000 shares at a public offering price of $76 per share, before underwriting discounts and commissions.In addition, MRNA has granted the underwriters a 30-day option to purchase up to an additional 2,640,000 shares of common stock at the public offering price.Gross proceeds from the offering will be approximately $1.34 billion, says Moderna.The offering is expected to close on or about May 21, 2020, subject to customary closing conditions.Shares in Moderna pulled back 3% in Monday’s after-hours trading, following a 20% rally during the day after the biotech reported “positive” interim clinical data for its experimental coronavirus vaccine.“The interim Phase 1 data, while early, demonstrates that vaccination with mRNA-1273 elicits an immune response of the magnitude caused by natural infection,” said Tal Zaks, Chief Medical Officer at Moderna.“When combined with the success in preventing viral replication in the lungs of a pre-clinical challenge model at a dose that elicited similar levels of neutralizing antibodies, these data substantiate our belief that mRNA-1273 has the potential to prevent Covid-19 disease and advance our ability to select a dose for pivotal trials.”Shares in Moderna have now exploded over 300% on a year-to-date basis- and as a result, the $76 average analyst price target now indicates 5% downside potential from current levels. (See Moderna stock analysis on TipRanks).However the stock still shows a bullish Strong Buy consensus from the Street, with six analysts reiterating their buy ratings on Monday. That includes Needham’s Alan Carr who ramped up his price target all the way from $58 to $94.“Based on these data, we believe the vaccine is likely to be found effective for prevention of infection in a Phase 3 trial” he explained. Carr believes a Phase 3 interim analysis by the end of 2020 appears feasible, which he says could be sufficient for FDA Emergency Use Authorization.“Given collaboration with Lonza, we expect Moderna to have meaningful supply by 4Q20. We have therefore added an mRNA-1273 revenue stream to our model and are raising our price target to $94” the analyst writes.Related News: Europe Could Conditionally Approve Gilead’s Remdesivir In Next Few Days Moderna Spikes 21% Amid “Positive” Early-Stage Covid-19 Vaccine Data AstraZeneca Aiming For 30M UK Covid-19 Vaccine Doses By September More recent articles from Smarter Analyst: * Starbucks Back To Business In Japan Today * Uber Pops More Than 6% On Second Round Of Layoffs, Site Closures * Microsoft, FedEx Team Up To Make Package Delivery More Efficient * Moderna Spikes 21% Amid “Positive” Early-Stage Covid-19 Vaccine Data

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  • 3 stellar ASX growth shares to buy right now

    Man holding tablet with sharemarket chart showing growth shares

    I’m a big fan of growth shares and feel lucky to have so many to choose from on the Australian share market.

    But with so many options, it can be hard to decide which ones to buy.

    Three top ASX growth shares that I think should be considered are listed below. Here’s why I would be a buyer of these shares:

    a2 Milk Company Ltd (ASX: A2M)

    One of the best growth shares on the local market could be a2 Milk Company. Over the last few years the infant formula and fresh milk company has grown at a rapid rate thanks largely to the success of its A2-only offering with Chinese consumers. The company’s products exclude the A1 protein from cow’s milk which some people are believed to have problems consuming. Demand continues to rise for its products, leading to management recently upgrading its guidance for the full year. The top end of its guidance range implies year on year revenue growth of 34.1% and EBITDA growth of 35.4%. Given its modest market share, I believe a2 Milk Company still has a long runway for growth.

    BetaShares Asia Technology Tigers ETF (ASX: ASIA)

    If you would like to invest in growth shares outside Australia, then you could invest in some of the fastest growing tech companies in the Asia market with the BetaShares Asia Technology Tigers ETF. Through a single investment investors can gain exposure to companies that are revolutionising the lives of billions of people in the region. This includes ecommerce giant Alibaba, search engine company Baidu, and new Afterpay Ltd (ASX: APT) shareholder and WeChat owner, Tencent.

    Domino’s Pizza Enterprises Ltd (ASX: DMP)

    Another option for growth investors to consider is Domino’s Pizza. I think it could generate market beating returns for investors over the next decade thanks to its bold same store sales and store expansion targets. Over the next five years the pizza chain operator is aiming to deliver annual same store sales growth of 3% to 6% and annual organic new store additions of 7% to 9%. If it delivers on this, I expect it to underpin strong earnings growth for the foreseeable future.

    And here is a fourth option for growth investors that you might regret missing out on…

    One “All In” ASX Buy Alert, that could be one of our greatest discoveries

    Investing expert Scott Phillips has just named what he believes is the #1 Top “Buy Alert” after stumbling upon a little-owned opportunity he believes could be one of the greatest discoveries of his 25 years as a professional investor.

    This under-the-radar ASX recommendation is virtually unknown among individual investors, and no wonder.

    What it offers is an utterly unique strategy to position yourself to potentially profit alongside some of the world’s biggest and most powerful tech companies.

    Potential returns of 1X, 2X and even 3X are all in play. Best of all, you could hold onto this little-known equity for DECADES to come.

    Simply click here to see how you can find out the name of this ‘all in’ buy alert… before the next stock market rally.

    Find out the name of Scott’s ‘All in’ Buy Alert

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    Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended BetaShares Asia Technology Tigers ETF. The Motley Fool Australia owns shares of A2 Milk. The Motley Fool Australia has recommended Domino’s Pizza Enterprises 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 3 stellar ASX growth shares to buy right now appeared first on Motley Fool Australia.

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