Commonwealth Bank of Australia (ASX: CBA) shares are currently selling at a price-to-earnings ratio (P/E) of 12.41. This is just below the company’s 10 year P/E average of 13.7. Year-to-date the CommBank share price is still down by 14.3%. For me, this appears a relatively good entry price for a bona fide ASX blue chip. Moreover, beyond price, the company is working diligently to build value.

CBA wealth

Colonial First State has long been the CommBank’s wealth-management arm. On 15 March CommBank announced it would be selling 55% of Colonial to US private equity firm KKK for AUD$1.7 billion. This will allow the bank to simplify its business model and focus on its core business of banking.  

CommBank and KKK have both announced plans to invest significant capital into Colonial. Among these is a more rapid transition to digital channels. 

Commonwealth Bank CEO Matt Comyn said:

“We are confident that together with KKR, we can provide CFS with an increased capacity to invest in product innovation, new services and its digital capabilities. We have a shared vision for CFS to be one of the leading superannuation and investment businesses in Australia.”

Branching into buy now pay later (BNPL)

CommBank announced it was to launch Swedish private fintech, Klarna in Australia on 30 January. A plan later derailed by the COVID-19 outbreak. CommBank holds a 5.5% stake in Klarna. Increasing from its original 1.8% holding. The companies will jointly fund and have 50:50 ownership rights to Klarna’s Australian and New Zealand business.

Given the events in the BNPL sector this week this is a very big deal. Although it recently made a loss, Klarna is already one of the giants in the BNPL space. In fact, it was the original pioneer. CommBank’s 5.5% purchase provides access to an existing large customer and merchant base with an established beachhead in the USA. 

CommBank is Australia’s largest payments processor. This means its 50%-owned Klarna Australian operations will start with immediate national coverage.

CBA shares

 CommBank shares are selling at a reasonable price of $68.76 at the time of writing and it is well-positioned for future growth. Its $1.5 billion allowance for COVID-19-related damage is covered by the sale of 55% of Colonial. Furthermore, Colonial is more likely to increase earnings as part of the core business of a private equity firm. Lastly, its position in Klarna sets it up to play a dominant role in the Australian BNPL sector, as well as on the global stage. 

There are still uncertain times ahead to be sure. However, I believe that CommBank shares are a wise investment at this price over the medium to long term. It will lock in steady capital growth, as well as locking in a future dividend at a 12-month trailing average at 6.28%.  

More reading

• Ready to invest your first $2,000 in ASX shares? Do these 3 things first
• 2 ASX growth shares I’d buy before Afterpay shares
• Why today might be a good day to buy NAB and Westpac shares
• ASX 200 rises 0.8%, travel shares fly higher
• The 10 shares that significantly move the ASX 200 index

Motley Fool contributor Daryl Mather 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.

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As I mentioned here earlier this week, founder-led companies have traditionally outperformed the rest of the market. 

This is believed to be because founders are focused on the long term and building something significant, whereas some professional CEOs have a tendency to be focused on short term goals.

With that in mind, I think having exposure to founder-led companies could be a great thing for a portfolio.

Here are three more founder-led shares that I would buy for the long-term:

Goodman Group (ASX: GMG)

The first founder-led share to consider is Goodman Group. It is an integrated commercial and industrial property group. I’m a big fan of the company due to the quality and growth potential of its portfolio, which has been put together expertly by co-founder and Group Chief Executive Officer, Gregory Goodman. He has played an integral role in establishing its specialist global position in the property market through various corporate transactions. This includes takeovers, mergers, and acquisitions. This has led to its shares generating market-beating returns for investors over the last decade and I expect more of the same in the future. Especially given its exposure to industries benefiting from structural tailwinds like ecommerce.

Jumbo Interactive Ltd (ASX: JIN)

This online lottery ticket seller was founded by Mike Veverka all the way back in 1995. He remains the company’s CEO today. A lot has changed with the business since then, but all for the better. As well as operating the Oz Lotteries website, Jumbo now has its software as a service platform. This allows other lotteries to run their online operations via the platform. It also entered into the UK market last year via the acquisition of Gatherwell Limited. Combined, I feel this puts the company on a path to achieve its target of $1 billion in ticket sales on the Jumbo platform by FY 2022. This compares to its ticket sale estimates of $335 million to $341 million in FY 2020.

SEEK Limited (ASX: SEK)

Another founder-led company which I think is a great long term option for investors is SEEK. The job listings giant is still led by Andrew Bassat, who co-founded the company in 1997 along with his brother Paul Bassat and Matt Rockman. As with Jumbo, SEEK has set itself some bold growth targets for the medium term. It is targeting revenue of $5 billion later this decade, up from $1,537.3 million in FY 2019. Due to the strength of its core ANZ business and the rapidly growing Zhaopin business in China, I think SEEK has a great chance of delivering on its target.

More reading

• Why I would buy these outstanding ASX 50 shares right now
• Where to invest $2,000 in cheap shares
• These ASX 200 shares could be perfect for a retirement portfolio
• 3 high quality ASX blue chip shares to buy in June
• 3 exciting ASX growth shares for stellar long term returns

James Mickleboro owns shares of SEEK Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Jumbo Interactive Limited. The Motley Fool Australia has recommended Jumbo Interactive Limited and SEEK 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.

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Well, its official, we’re technically in a recession for the first time in almost three decades.

Well, almost official. A recession is officially defined as two or more consecutive quarters of negative economic growth. We’ve only had one so far – the quarter ending 31 March. But since it’s almost a certainty that the quarter ending 30 June will reveal a massive economic slowdown, we can pretty much say today that Australia is in a generational first of a recession.

But what does a recession really mean for S&P/ASX 200 Index (ASX: XJO) shares? And how can we survive one with our wealth intact? To this end, here are three tips:

1) Remember cash is king in a recession

The first thing you should think about as we enter this recession is the regal supremacy of cash. Not as an investment mind you – cash is still lousy at growing your wealth. But it’s more important than ever to secure your cash and cash flow. Recessions are tragically a time when many Australians will be out of work. So I think it’s imperative that we all ready our personal finances for a potential shock. All jobs are safe until they’re not, and now is the time to hope for the best, but prepare for the worst.

So before you even think about investing during a recession, make sure you have a couple of months of living expenses saved up for that rainy day. Hopefully, the skies will stay clear for us all, but you will still want to have a raincoat in case it clouds over.

2) Don’t let ASX 200 volatility get the better of you

Recessions and ASX bear markets can be a great time to invest in shares at cheap prices for the long-term. But many investors don’t get to enjoy these opportunities because they do silly things with their investments amid the volatility that recessions can bring. Selling your shares at a loss, for example, is usually not a good idea in the midst of widespread market panic.

I personally have a rule of never selling in a bear market unless absolutely necessary – and I’m usually a net buyer of shares. This means that even if I had to sell off some shares in order to buy others, I would always try to avoid doing this in a bear market. So have a mental battle plan at the ready for what you might do with your shares in a recession-induced bear market. This will hopefully save you from making emotional decisions that cost you down the road.

3) Always remember there’s light at the end of the tunnel

Although not recently, Australia and the wider global economy have gone through many recessions before. And you know what these recessions all had in common? They all eventually ran their course and were replaced by good times once again. Yes, this recession is different – we haven’t had to deal with a pandemic like this for a hundred years. But all other recessions were ‘different’ too, and we eventually saw them off. I have full confidence that this time will, in fact, be no different.

More reading

• Why Alumina and Stockland share prices could outperform in coming weeks
• 2 ASX REITs to buy with $1,000 today
• We’re in recession. What does that mean for investors?
• ASX 200 down 0.35%: UBS upgrades NAB and Westpac, Qantas soars again
• 3 of the best ASX 200 tech shares for your watchlist

Motley Fool contributor Sebastian Bowen 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.

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