Stock Pick

  • Investing $1,000 in these 3 ASX shares would be a smart move

    If you’re looking to invest $1,000 into the share market right now, then there are a lot of quality options to choose from.

    Three ASX shares that I think would be smart choices are listed below. Here’s why I like them:

    Jumbo Interactive (ASX: JIN)

    Jumbo Interactive is an online lottery ticket seller and the operator of the Oz Lotteries website. In addition to this, the company has a Software as a Service (SaaS) business, Powered by Jumbo Software. This is the most exciting part of the business in my opinion. The total addressable market for its SaaS business is significant. Last year management noted that approximately 7% of the world’s lottery tickets are sold online, which implies that 93% of a ~US$300 billion global market has yet to transition online. I suspect a greater portion of ticket sales will be made online in the future and for its SaaS business to underpin strong earnings growth over the next decade.

    REA Group Limited (ASX: REA)

    Another option for a $1,000 investment is REA Group. It is the operator of the realestate.com.au website and several international equivalents. Although the housing market is struggling at the moment, this has not stopped the company from growing its earnings. During the third quarter it delivered an 8% lift in EBITDA to $119.6 million despite dealing with a 7% decline in listings. And while listings in the fourth quarter are likely to be markedly lower, its cost cutting plan should offset some of this weakness. Looking further ahead, when conditions improve I expect REA Group’s earnings growth to accelerate and drive its share price higher.

    Zip Co Ltd (ASX: Z1P)

    A final option to consider is growing buy now pay later provider, Zip Co. There were concerns that Zip Co’s business model could struggle if trading conditions deteriorated materially. Pleasingly, this hasn’t proven to be the case. The company recently released a trading update which revealed that transaction volume jumped 86% to $181.6 million in April. But perhaps the even better news was that its net bad debts came in at just 1.99%. This is higher than previously, but at a very strong level compared to many of its peers. I’m confident its strong growth will continue over the coming years. Especially given its new verticals, international expansion, and the growing popularity of the payment method with consumers and merchants.

    And if you have some funds leftover, these five recommendations below look like potential market beaters…

    NEW! 5 Cheap Stocks With Massive Upside Potential

    Our experts at The Motley Fool have just released a FREE report detailing 5 shares you can buy now to take advantage of the much cheaper share prices on offer.

    One is a diversified conglomerate trading 40% off it’s all-time high, all while offering a fully franked dividend yield of over 3%…

    Another is a former stock market darling that is one of Australia’s most popular and iconic businesses. Trading at a <strong>significant discount</strong> to its 52-week high, not only does this stock offer massive upside potential, but it also trades on an attractive fully franked dividend yield of almost 4%.

    Plus, this free report highlights 3 more cheap bets that could position you to profit in 2020 and beyond.

    Simply click here to scoop up your FREE copy and discover the names of all 5 cheap shares.

    But you will have to hurry because the cheap share prices on offer today might not last for long.

    YES! SEND ME THE FREE REPORT!

    More reading

    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 and recommends Jumbo Interactive Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia has recommended Jumbo Interactive Limited and REA 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 Investing $1,000 in these 3 ASX shares would be a smart move appeared first on Motley Fool Australia.

    from Motley Fool Australia https://ift.tt/3g4INSg

  • These are the latest ASX shares to be downgraded by top brokers

    Warnings from some experts about overvalued share prices aren’t enough to keep our market down!

    The S&P/ASX 200 Index (Index:^AXJO) reversed its morning losses and is trading 0.4% higher as we head into the close.

    Our market may have gotten a tat too excited about the COVID-19 economic recovery, but I don’t think that in itself will send the ASX 200 into a new bear market – at least not in the shorter-term.

    But the air of optimism hasn’t stopped brokers from downgrading their recommendations on a handful of ASX stocks.

    Not ‘Appening anymore

    One stock that might be looking maxed out is tech darling Appen Ltd (ASX: APX), according to Credit Suisse.

    The broker lowered its rating on the stock to “neutral” from “outperform” despite the artificial intelligence product developer’s upbeat trading update.

    Appen highlighted a robust demand outlook, increasing use of its products across various industries and growing efficiencies in its business.

    “Our rating downgrade is primarily a function of share price rather than change in thesis,” said Credit Suisse.

    “In March APX was trading 26x consensus 12-month forward P/E vs 42x currently, and its share price is now near an all-time high.

    At these levels in our view an upgrade is required to support further share price appreciation, although in the current environment, it may be more challenging to achieve.”

    The broker’s price target on Appen is $30 a share.

    Playtime over

    Another stock that’s issued good news but is hit by a downgrade is Baby Bunting Group Ltd (ASX: BBN).

    Citigroup cut its recommendation on the baby products retailer to “hold” from “buy” after management reported strong like-for-like (LFL) sales growth.

    This may be due to shoppers stockpiling essentials, like diapers, and pre-orders from consumers worried about delays in getting products.

    But despite the good results, Citigroup thinks Baby Bunting’s margins will come under pressure from a sales shift towards skinnier margin consumable products and higher freight costs from online orders.

    “We expect outperformance relative to the broader retail sector to slow as more discretionary segments outperform as the Australian lock down is eased, and consumer stockpiling unwinds,” said the broker.

    “We see the FY21e PE of 17x, a 9% premium to peers, as fairly reflecting the rewards and risks.”

    Citi’s price target on the stock is $3.35 a share.

    Losing its shine

    A bullish outlook for the gold price isn’t enough to keep Evolution Mining Ltd (ASX: EVN) on Morgan Stanley’s buy list.

    The broker chopped its rating on the gold miner to “equal weight” (equivalent to “hold”) from “overweight”.

    While the outlook for the precious metal is positive due to the uncertain economic environment from COVID-19 and negative bond yields, Evolution is starting to look fully priced compared to its peers.

    “In the last year, our gold coverage’s average forward 12m EV/EBITDA has fallen ~13% to 6.3x, and are trading an average of 7% below three-year averages,” said Morgan Stanley.

    “If we assume our coverage returns to respective peak multiples of 7-11x, we find 30% upside for all but EVN.”

    The broker’s price target on Evolution Mining is $4.70 a share.

    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

    More reading

    Motley Fool contributor Brendon Lau owns shares of Evolution Mining Ltd. The Motley Fool Australia owns shares of Appen Ltd. 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 These are the latest ASX shares to be downgraded by top brokers appeared first on Motley Fool Australia.

    from Motley Fool Australia https://ift.tt/3bK4fIR

  • Luckin’s Stock Faces Wipeout in Rush to Sell Before Delisting

    Luckin’s Stock Faces Wipeout in Rush to Sell Before Delisting(Bloomberg) — Luckin Coffee Inc.’s battered stock faces a renewed wave of selling on Wednesday, after Nasdaq Inc. said it planned to delist the onetime market darling that shocked investors with revelations of accounting fraud last month.The Chinese coffee chain’s shares, which have been suspended since tumbling more than 80% in early April, will resume trading at 7 a.m. in New York. Luckin announced Nasdaq’s intention to delist the company in a statement on Tuesday, saying shares will remain on the exchange pending the outcome of an appeal hearing.The prospect of delisting is likely to trigger a rush for the exits by Luckin’s remaining shareholders, adding to a long list of challenges for the company as it tries to recover from its disclosure that senior executives fabricated about $310 million in sales. Banks including Credit Suisse Group AG, Morgan Stanley and Goldman Sachs Group Inc. are among those with money at stake, after the firms seized control of shares that Luckin’s chairman had pledged as collateral for loans.“I can’t see what else investors would do other than dump the stock,” said Hou Anyang, a fund manager at Frontsea Asset Management Co. in Shenzhen.Luckin’s dramatic fall from grace has made the company a poster child for concerns about Chinese corporate governance, fueling a debate in Washington over the extent to which American money and capital markets should be intertwined with a growing geopolitical rival.President Donald Trump said last week he’s “looking at” Chinese companies that don’t follow U.S. accounting rules, while his administration moved to stop a federal retirement savings fund from investing in the Asian nation’s stocks. Nasdaq is planning new rules that would make initial public offerings more difficult for some Chinese companies.Nasdaq Set to Tighten Listing Rules, Impacting Chinese IPOs Luckin Chairman Lu Zhengyao said in a statement that he’s “deeply disappointed” Nasdaq is moving to delist before the company releases final results of an internal probe into its accounting.“Luckin has reacted actively according to the initial results of the investigation, including terminating some relevant management and restructuring the board,” Lu said.“My personal style may have been too aggressive and led the companies to run too fast, which has triggered many problems,” Lu continued. “But I never lied to investors with the idea of ‘selling concepts.’ I’m working hard to make the company bigger and better to create value for society.”A Luckin representative declined to comment on the stock price. The company had a market value of about $1.1 billion based on its closing level April 6.While Luckin’s stores are still operating and the company is opening new outlets, its offices in China were raided by authorities last month as part of a multi-agency investigation into its finances. Luckin fired its chief executive officer and other senior leaders last week.Read more: Luckin Coffee Still Expanding Full Steam Despite Sales ScandalIn its letter to Luckin on the delisting plan, Nasdaq cited “public interest concerns as raised by the fabricated transactions disclosed by the Company” and “past failure to publicly disclose material information.”Car Inc., the auto-rental company founded by Lu whose stock has slumped in the wake of the Luckin scandal, dropped as much as 3.8% in Hong Kong on Wednesday. Its dollar bonds were little changed, as were Luckin’s convertible notes, according to Bloomberg-compiled prices.The anticipated selloff in Luckin shares on Wednesday may also spread to other U.S.-listed Chinese companies, though some of those losses could create buying opportunities, said Sun Jianbo, president of Beijing-based China Vision Capital.“As a Chinese firm which will cease to list on the U.S. market, Luckin will be virtually worthless to American investors,” Sun said. “It’d also be a sentiment shock to other Chinese ADRs, but may create bottom-fishing opportunities for some investors.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

    from Yahoo Finance https://ift.tt/3cNt1t1

The Latest