In late morning trade the S&P/ASX 200 Index (ASX: XJO) is on course to snap its winning streak. The benchmark index is currently down 0.65% to 5,952.5 points.

Four shares that have fallen more than most today are listed below. Here’s why they are dropping lower:

The Air New Zealand Limited (ASX: AIZ) share price is down 4% to $1.46. This morning the airline operator released its earnings guidance for FY 2020. Although the New Zealand Government is now allowing the airline to slowly restart its domestic network, revenue and earnings will still be significantly lower than expected. The company is now expecting to report an underlying loss before significant items and tax of up to NZ$120 million.

The Carsales.Com Ltd (ASX: CAR) share price has fallen 2.5% to $17.56. This decline may have been driven by a broker note out of Macquarie this morning. According to the note, the broker has downgraded Carsales’ shares to a neutral rating with an $18.00 price target. It made the move on valuation grounds after a strong gain since April.

The Pendal Group Ltd (ASX: PDL) share price has dropped 3% to $6.03. This follows an announcement by Westpac Banking Corp (ASX: WBC) which reveals that it has offloaded its 9.5% stake in the fund manager. The banking giant has sold 31 million shares for an average of $5.98 per share. The bank also warned that it is undertaking a strategic review of its wealth businesses which could result in some or all of its $14 billion of funds under management with Pendal being withdrawn.

The Star Entertainment Group Ltd (ASX: SGR) share price is down 3.5% to $3.14. Earlier this week analysts at Morgan Stanley downgraded the casino and resort operator’s shares to an underweight rating with a $3.30 price target. It believes the Star is going to lose market share to Crown Resorts Ltd (ASX: CWN) when the new Crown Sydney casino opens later this year.

More reading

• 5 things to watch on the ASX 200 on Thursday
• Westpac share price on watch after dumping its Pendal stake
• ASX 200 finishes higher by 0.8%, Carsales share price driven up by FY20 guidance
• Is the CSL share price a buy right now?
• ASX 200 down 0.1%: Carsales update impresses, a2 Milk surges higher

Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia has recommended carsales.com Limited and Crown Resorts 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 Why Air NZ, Carsales, Pendal, & Star shares are dropping lower appeared first on Motley Fool Australia.

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It can be very hard to decide where to invest in today’s market. When there is good news, it rises, it ignores bad news, and almost anything you put money into increases your investment. Personally, I think this is a recipe for disaster. Markets like this can attract people without investing experience who “bet” on whatever the hot tip is and get burned when reality kicks in.

This irrational market could go on for a long time, or it could end with a thud tomorrow. Here are 3 ASX shares I would buy in today’s market with $5,000.

Where to invest for value

The secret to all of my investing over the years has been to find a good company, buy it at a low price, and hold onto it for years.

I think Aristocrat Leisure Limited (ASX: ALL) is one of the best value opportunities on the ASX today. Aristocrat has a great financial track record, which underlines its strong management. In particular, the company has delivered a return on equity of 28% over 10 years. This is pretty high in relation to most large cap companies on the ASX. 

Aristocrat Leisure operates in games of chance. This includes casino machines, gambling platforms, casino management systems and many other areas. It has a market presence in Asia, Australia and the USA.

I would invest at least $2,000 in Aristocrat as a medium-term investment, as I believe it is currently selling at a discount.

Where to invest for growth

Jumbo Interactive Ltd (ASX: JIN) is one of the great shares on the S&P/ASX 200 Index (ASX: XJO). It has returned 25 times the initial investment since 2010. Despite this, it had a greater leap in sales last year than in any previous years. In addition, it was forecasting another increase this financial year before the coronavirus. 

I would happily place at least $2,000 into Jumbo Interactive shares as an investment over the medium term. Although it currently has a relatively high price-to-earnings ratio of 25.5, I believe it still has a lot of growth left in it.

Where to invest for security

Vicinity Centres (ASX: VCX) is one of the largest Australian real estate investment trusts on the ASX. It specialises in ownership and management of Australian shopping centres. The company recently executed a share placement to raise capital, which added significant strength to its balance sheet. It recently reported that foot traffic was at 70% of the same period last year.

I would invest $1,000 in Vicinity Centres today. Its road back to a healthily rising share price is slightly longer. However, I believe it is still a good company, with a 12-month trailing dividend yield of 9.85% at the time of writing.

Foolish takeaway

In heated markets like today, it can be hard to work out where to invest. Moreover, it is always very tempting to “bet” on the hot share of the day. In my view, these 3 ASX shares are undervalued and are all great opportunities for stable growth over the medium term.

More reading

• Next phase of bull market could see ANZ Bank outperform Afterpay
• Are these beaten down ASX shares in the buy zone?
• Is the Macquarie share price a solid buy today?
• 5 things to watch on the ASX 200 on Thursday
• ASX 200 finishes higher by 0.8%, Carsales share price driven up by FY20 guidance

Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Jumbo Interactive Limited. The Motley Fool Australia owns shares of and has recommended Jumbo Interactive 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 Where to invest $5,000 in an irrational market appeared first on Motley Fool Australia.

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Xero Limited (ASX: XRO) shares have been performing strongly in recent years and it looks like the cloud-based accounting software company is one of the hottest ASX growth shares right now.

Personally, I think the Aussie company has strong growth potential in the next decade. Xero is still signing up large clients and I think accounting software is as in-demand as ever in the current COVID-19 climate.

However, Xero isn’t the only company that I could see becoming a cornerstone of Aussie share portfolios by the year 2030.

Below I’ll share which ASX stars I have my eye on as potential large-caps of the future.

Why Xero shares could be a cornerstone investment

There seems to be a lot of talk on whether ASX growth shares are overvalued, particularly in the tech space. In saying this, I still believe it’s worth thinking about what will be the leading companies in the future. For today, that could mean strong dividend shares like Telstra Corporation Ltd (ASX: TLS) and BHP Group Ltd (ASX: BHP).

In reality, growth shares often become dividend shares as they mature. High return on equity can’t continue forever, which means eventually these companies start returning capital to shareholders.

I think Xero shares are just one potential staple of the future. I also think NextDC Limited (ASX: NXT) could be a growth turned dividend share.

The NextDC share price has already rocketed 330.3% in the last 5 years. NextDC is an Australian data centre operator and I think it’s well-placed to capitalise on a growing market.

This ASX tech group is continuing to expand and operates data centres across the country. That diversity and economic moat around the business could be the secret to sustaining momentum over the next decade.

Of course, nothing is guaranteed with ASX growth shares like Xero or NextDC. However, the best we can do as investors is to pick high-quality companies with long-term potential.

I’d also consider putting a growing healthcare share like Polynovo Ltd (ASX: PNV) in the mix. 

Polynovo has seen strong success. Strong sales networks and extensive research and development bode well for the company’s future growth trajectory.

Given the solid technical environment, I would put Polynovo in the same basket as Xero shares in terms of long-term growth potential.

Foolish takeaway

These are just a few ASX growth shares that I think have strong growth potential.

I like the look of Polynovo, NextDC and Xero shares because all have had proven success with their business models.

Investing in high-quality ASX shares for the future is the best strategy that I can think of to build long-term wealth.

More reading

• Is the Telstra share price a buy?
• 3 ASX growth shares to buy with $3,000
• 5 ASX shares that would’ve made you a fortune in 5 years
• Why I think Xero shares are a great long-term buy
• Why I think Telstra shares are a strong buy

Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Xero. The Motley Fool Australia owns shares of and has recommended Telstra 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 Will Xero shares and these 2 other ASX companies be portfolio staples by 2030? appeared first on Motley Fool Australia.

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