Once again, a large number of broker notes hit the wires last week. Some of these notes were positive and some were bearish.

Three sell ratings that caught my eye are summarised below. Here’s why top brokers think investors ought to sell these shares next week:

Fortescue Metals Group Limited (ASX: FMG)

According to a note out of Citi, its analysts have downgraded this iron ore producer’s shares to a sell rating with an increased price target of $11.10. Citi has responded to a lift in iron ore prices by upgrading its earnings and dividends estimates for Fortescue. And while it notes that its 88 cents per share dividend estimate for FY 2021 implies a generous yield, it expects a meaningful decline in iron ore prices to lead to a sharp dividend cut in FY 2022. In light of this, it believes the company’s valuation is getting stretched now. The Fortescue share price ended the week at $13.58.

TechnologyOne Ltd (ASX: TNE)

Analysts at UBS have downgraded this enterprise software company’s shares to a sell rating but lifted the price target on them to $8.20. According to the note, TechnologyOne’s half year update fell a touch short of its expectations last week. As a result, the broker suspects it might be hard for the company to deliver on its full year expectations now. All in all, it doesn’t believe the company’s shares deserve to trade on such a high earnings multiple. TechnologyOne’s shares finished the week at $9.91.

Wagners Holding Company Ltd (ASX: WGN)

A note out of the Macquarie equities desk reveals that its analysts have retained their underperform rating and slashed the price target on this building materials company’s shares to 80 cents. The broker notes that the Supreme Court of Queensland has delivered its judgement on its pricing dispute with Boral Limited (ASX: BLD). While the orders will remain confidential for a couple of weeks, Macquarie doesn’t appear optimistic. In addition to this, Macquarie has concerns over Wagners’ outlook and thus remains bearish. The Wagners share price was trading at 82 cents at the close of play on Friday.

More reading

• Here are 2 ASX dividend shares with yields over 10%
• How to make a $50,000 passive income with ASX shares
• What to watch on the ASX 200 next week
• ASX 200 drops 1% on Friday
• ASX 200 drops 0.4%, Chinese threat to Australian iron

Motley Fool contributor James Mickleboro 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 Top brokers name 3 ASX shares to sell next week appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2LRzDKT

A $50,000 passive income sounds like a dream, but can you really achieve it with ASX shares?

How to make a $50,000 passive income with ASX shares

I think making an annual $50,000 passive income via ASX shares is very achievable, but it won’t happen overnight. $50,000 is a sizeable amount of money and it takes disciplined savings and savvy investing to deliver.

Sure, you could put all of your money into hot stocks like Altium Limited (ASX: ALU) and then sell your stake slowly, but that’s a risky strategy. If you’re going to retire and live off your investments, a diversified portfolio is the key.

Let’s assume we invest in a mix of ASX dividend shares. I like the look of Scentre Group (ASX: SCG), Fortescue Metals Group Limited (ASX: FMG) and Harvey Norman Holdings Limited (ASX: HVN) right now.

While dividend yields can be misleading at the moment, let’s assume these yields are constant for now. Scentre shares are yielding 8.46% while Fortescue and Harvey Norman are paying 7.35% and 11.22% respectively, at the time of writing.

This means an equally-weighted portfolio comprising these 3 ASX shares would deliver a yield of 9.01% per annum. Let’s say a 25-year-old investor starts with nothing and invests $10,000 per year until they’re 65.

If that 9.01% remains constant throughout their 40-year investing journey, their portfolio would be worth over $3 million by age 65. The yearly distributions would total a whopping $305,249 (before tax). That’s much more than $50,000 of passive income, but I wouldn’t necessarily bank on this. 

If you’re at or approaching retirement age, it’s unlikely you’ll want all of your money invested in ASX shares. Shares can offer great returns, but they also come with higher risk than safer investments like bonds and cash.

A blended portfolio, on the other hand, still has the potential to generate a $50,000 income from ASX shares whilst better protecting your net worth. And given we’re after $50,000, not $300,000, your real return could be much lower than 9% per annum while still achieving your goal.

Foolish takeaway

Clearly, our example investor’s scenario has been simplified down. But the fact is that compounding returns work and are the key to building a $50,000 income using ASX shares for your future retirement.

More reading

• Here are 2 ASX dividend shares with yields over 10%
• Top brokers name 3 ASX shares to sell next week
• Have $500 to invest? Then buy these 5 ASX 200 shares immediately
• How to reduce your work to part-time using ASX shares
• ASX 200 drops 1% on Friday

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Altium. The Motley Fool Australia has recommended Scentre Group. 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 How to make a $50,000 passive income with ASX shares appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3bYDXD1

If you’re looking to invest $500 into the share market, then I would suggest you think long-term.

This is because brokerage costs will eat into your profits if you are constantly buying and selling. 

But which shares should you buy with this $500? I think the five ASX 200 shares listed below would be great options:

Altium Limited (ASX: ALU)

Altium is an electronic design software provider. I believe it is one of the best long term options on the ASX due to the Internet of Things boom. The rise of connected devices is driving increasingly strong demand for its Altium Designer software and shows no signs of slowing. In addition to this, it has other businesses, such as Octopart, that are growing quickly and supporting its growth.

BHP Group Ltd (ASX: BHP)

If you’re looking for exposure to the resources sector then I would pick BHP. This is due to its diversified, world class operations and favourable commodity prices. Overall, I believe it is well-placed to deliver a bumper profit result and return significant funds to shareholders again.

CSL Limited (ASX: CSL)

Another favourite of mine is CSL. Due to the quality and strong long term growth potential of both its CSL Behring and Seqirus businesses, I think this biotherapeutics giant could be a market-beater in the 2020s. And while its shares may appear expensive, this is almost always the case. Importantly, this hasn’t stopped its shares generating significant wealth for investors over the last decade.

Nanosonics Ltd (ASX: NAN)

Another option to consider is Nanosonics. It is a leading infection control specialist behind the industry-leading trophon EPR disinfection system for ultrasound probes. This product has a sizeable global market opportunity and I expect it to underpin strong earnings growth in the future. Supporting this growth will be the upcoming launch of new products, which are understood to have similar market opportunities.

Xero Limited (ASX: XRO)

A final share to consider buying is Xero. As the business and accounting software provider is quickly becoming the platform of choice for small and medium sized businesses across the globe, I believe it is well-positioned for strong long term growth. And while subscriber growth may be subdued during the pandemic, I expect a rebound once the crisis passes.

More reading

• How to make a $50,000 passive income with ASX shares
• What to watch on the ASX 200 next week
• How to tidy up your super in just 10 minutes this weekend
• These were the worst performing ASX 200 shares last week
• Where to invest $1,000 in ASX ETFs today

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd., Nanosonics Limited, and Xero. The Motley Fool Australia owns shares of Altium. The Motley Fool Australia has recommended Nanosonics 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 Have $500 to invest? Then buy these 5 ASX 200 shares immediately appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3ehX6B5