Stock Pick

  • In your 50s? Here are the 2 best ASX 200 shares to buy now

    happy couple discussing finances

    S&P/ASX 200 Index (ASX: XJO) investors in their 50s are likely starting to think about retirement. The makeup of your investment portfolio is an important consideration. You may want to purchase more dividend-paying shares, as well as larger more stable businesses. Further, diversification is more important than ever to preserve capital.

    Investors in their 50s

    As investors we’re a motley crew. We all have motley goals, motley resources and motley risk appetite. Because of this, it is important to understand your own personal circumstances and invest accordingly. The below ASX stocks will be fantastic options for most investors in their 50s, but not for all. 

    2 best ASX 200 shares to buy now

    CSL Limited (ASX: CSL)

    The largest company in the ASX 200 is a compounding machine! Over the last 20 years CSL has provided investors with a mega 20% annualised total return. The company’s performance has been even better in recent times, returning more than 25% per annum in total returns over 5 and 10 years.

    After seeing the CSL share price fall more than 10% in May, I think now provides a nice entry point for new ASX 200 investors. Most of the drop can be attributed to profit taking and concerns over plasma collection issues resulting from COVID-19.

    Despite its vast size, CSL should continue to grow well in the future. The stock price may not appreciate as fast as in the past, but I believe that CSL can provide robust market outperformance with less volatility.

    Betashares Asia Technology Tigers ETF (ASX: ASIA)

    Most people earn their income in Australia, have their savings in Australia and invest in Australia. Australia is the lucky country, but I think ASIA is a great option for ASX 200 investors in their 50s because of its diversification.

    This ETF is a great way to diversify geographically into one of the fastest growing economies in the world. Not only that, it provides access to the technology sector, which is underweight in the ASX. 

    It can often be hard to pick the winner in new technologies. Investment trends such as e-commerce and cloud computing have enormous addressable markets. Because of this, there is likely to be more than one winner in a region. As a market capitalisation weighted ETF, you gain more and more exposure to the businesses winning in these trends over time.

    Some of the largest holdings include Alibaba Group and Tencent.

    Foolish takeaway

    Your 50s is a great time to start diversifying your portfolio and structuring it towards your income needs. Shares should make up part of a well balanced portfolio of multiple investment classes.

    Here are some other high quality stocks to help you plan for retirement.

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    Lloyd Prout owns shares in Betashares Asia Technology Tigers Ltd and expresses his own opinions. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia owns shares of and has recommended BetaShares Asia Technology Tigers ETF. 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 In your 50s? Here are the 2 best ASX 200 shares to buy now appeared first on Motley Fool Australia.

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  • SpaceX creates new era for this mid-cap ASX share

    ASX shares rise

    The integrated chip came about largely due to the first Apollo moon mission. The enabler of all of today’s advanced technologies. The SpaceX launch on the weekend ushered in a new era of space exploration, with the US Space Force on one side and private industry squarely on the other. 

    I believe one of the companies I have been watching for a while is likely to benefit greatly from any increased activity in space exploration.

    A SpaceX style startup

    Since 1983, Electro Optic Systems Hldg Ltd (ASX: EOS) has quietly gone about building high tech solutions to problems most of us are unaware of. It has an international presence across Australia, Singapore, the United States, the United Arab Emirates and Germany. It has also been in a strategic alliance with NASDAQ-listed defence giant Northrop Grumman.

    In my opinion, the SpaceX rocket could not have docked with the international space station without Electro Optic. It is developing the technology to help with over 500,000 pieces of space debris travelling at around 30,000km per hour. This represents a serious threat to satellites, the international space station and more. 

    In this area, Electro Optic has an Australian-based space situational awareness (SSA) network. This monitors and tracks orbiting space-based objects such as satellites and debris using ground-based radar and optical stations. 

    That we have a company like this astounded me.

    A strong defence company

    As with Austal Limited (ASX: ASB), Electro Optic also provides technology and equipment to the defence markets. In this area, it develops a range of remote weapons systems for use on tactical vehicles. Electro Optic offers battle-proven technology and world-leading counter-drone technology. This has been enabled by its laser rangefinder technology. 

    A well-managed company

    Companies like SpaceX are massive growth engines. Amazon.com is another such example. Growth engines are massively unprofitable until the day they are. Then they are money-making factories.

    Electro Optic, on the other hand, has always managed a very tight ship in my opinion. Over the past 10 years, it has grown its sales an average of 18% every year. In fact, it has managed to nearly double its sales in each of the past 3 years.

    Foolish takeaway

    In my opinion, the SpaceX launch and the US President announcement of Space Force, combined with heightened international tensions, are sure to increase the sales for Electro Optic in the years to come. The company has built a foundation based on excellent performance and advanced technology.

    Electro Optic shares are currently trading at a price-to-earnings ratio higher than their 8-year average. However, I still believe this company deserves a place on your watchlist.

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    John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Daryl Mather owns shares of Austal Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Amazon. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Austal Limited and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool Australia owns shares of and has recommended Electro Optic Systems Holdings Limited. The Motley Fool Australia has recommended Amazon. 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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  • We All Might Be Flying in Planes Again Soon

    We All Might Be Flying in Planes Again Soon(Bloomberg Opinion) — Covid-19 became a pandemic because airplane passengers carried the new coronavirus with them around the world. As that became clear, airlines grounded nearly all of their fleets, governments issued travel restrictions and mandatory quarantines, and tourist attractions and conferences closed down. With no reason to fly, a quick recovery for air travel seemed unlikely. Warren Buffett even dumped his airline stocks, claiming that the “world has changed.”Passengers also wouldn’t feel safe packed inside a metal tube for hours, would they?Happily for the industry, if not for the climate, the seemingly insurmountable barriers to air travel have begun to look less daunting. “We believe the worst is behind us, and we’re on the uptick,” American Airlines Group Inc.’s boss, Doug Parker, said after a surge in travel over the U.S. Memorial Day holiday weekend.Investors have taken notice. The Bloomberg Americas Airlines stocks index has rebounded by almost one-third from the mid-May low, and European carriers have made similar gains. Shares in German tour operator Tui AG have risen too.Such optimism feels jarring when airlines, American Airlines included, are poised to cut thousands of jobs. Most are still burning huge amounts of cash. Deutsche Lufthansa AG needs a 9 billion-euro ($10 billion) bailout, and Latam Airlines Group SA joined Latin American peer Avianca Holdings SA in filing for bankruptcy last week.But Parker is probably right to expect a continued recovery, at least on domestic and short-haul routes. This won’t be enough to put debt-laden airlines on a secure footing, and a full demand recovery probably won’t happen for a couple more years. But, right now, a desperate industry will take any good news it can get. The rigorous hygiene measures airlines have announced should go a long way toward restoring passenger confidence.  European budget carrier Ryanair Holdings Plc expects to operate at 40% of normal capacity from July, and the way bookings are shaping up suggests those planes will probably be at least half full. EasyJet Plc sees “encouraging” trends and notes that winter bookings are higher than usual for this time of year, although part of that may be because people have refund vouchers to use and are rebooking cancelled trips.  Ryanair’s extensive summer flight schedule had seemed premature a couple of weeks ago, but the travel restrictions that kept Europeans from moving around the continent are being relaxed. Starting in July, Spain is set to drop its requirement for international arrivals to quarantine for 14 days. Britain imposed a similar rule but is under immense pressure to abandon it. Travel between Europe and the U.S. will take longer to open up, but even here there are encouraging signs of political will to get people flying again.   A month ago, United Airlines Holdings Inc.’s chief executive officer, Scott Kirby, lamented that there wouldn’t be a recovery in flying until attractions like Disney World or the Paris museums were open again.Well, they will be soon. It’s already possible to visit the Acropolis in Athens and St Peter’s Basilica in Rome. Paris’s parks and museums are set to reopen from June. The French capital is usually swamped with tourists at this time of year, so there’s an incentive for travelers to get there first. Walt Disney World expects to reopen its Florida park from July, albeit with compulsory face masks and a ban on hugging your favorite Disney character.I’ve written before about how things like wearing masks and having to ask permission to use the toilet will make flying even less enjoyable. But these measures may make passengers feel safer. For example, while the gowns and other personal protective equipment issued to Emirates’ cabin crew are a little intimidating, they’re likely to put some nervous flyers at ease.As with SARS almost two decades ago, there are understandable concerns about catching coronavirus within the aircraft cabin, most likely from someone seated close by. The evidence isn’t comprehensive or conclusive, but so far there are surprisingly few documented cases of this happening with Covid-19. Airline industry body IATA says it knows of only one case where a person transmitted the virus to more than one person on board. Not surprisingly, plane manufacturers Airbus SE and Boeing Co. are intensively studying the subject. There are other plausible reasons why flying might be safer than you’d think: The air is filtered and frequently replenished from outside, seats act as somewhat of a barrier and passengers don’t move around the cabin much. Singing, yelling and talking loudly — contributors to so-called super-spreader infection events — are a big faux pas when you fly. Many passengers would still prefer the middle seat to be empty, but as I’ve written before, unless ticket prices rise, that would severely hamper airlines’ ability to break even.Of course, the longer someone’s on board, the greater the chance they’re exposed to potential infection. Hence, people may feel comfortable flying domestic and short-haul before they’re willing to fly halfway around the globe.Companies will probably take longer to get comfortable with the risk (and potential liability) of their employees flying for business. About half the corporate clients American Airlines surveyed still have a travel ban, though that’s down from two-thirds at the peak of the crisis. Millions of potential passengers have also lost their jobs and won’t feel able to splash out on holidays. And then there are the psychological scars from the prolonged lockdown. Being outside now feels a lot safer than being in any kind of confined space. A staycation in a local Airbnb might feel preferable to getting on a plane.For those willing to take the risk, and who can find adequate travel insurance, a rare opportunity awaits. Want to see Venice without the crowds? Now’s your chance.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Bryant is a Bloomberg Opinion columnist covering industrial companies. He previously worked for the Financial Times.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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