On Tuesday the Coles Group Ltd (ASX: COL) share price climbed 0.5% higher to $16.67.

This latest gain means the supermarket giant’s shares have now risen a sizeable 11% since the start of the year.

This means Coles’ shares are vastly outperforming the S&P/ASX 200 Index (ASX: XJO), which is down 11% over the same period.

Is it too late to buy Coles’ shares?

I don’t believe it is too late to invest in Coles. Although its shares have been strong performers this year, I believe they are still good value. Especially in comparison to its arch rival Woolworths Group Ltd (ASX: WOW).

At present, I estimate that the Coles share price is trading at a little over 21x FY 2021 earnings, whereas Woolies is trading closer to 26x FY 2021 earnings.

Another reason to be positive on Coles is its dividend. I expect Coles to provide investors with a fully franked 3.9% dividend yield next year. For Woolworths, I’m expecting a fully franked 2.9% dividend yield in FY 2021.

I’m not the only one that is positive on Coles. After looking through recent updates by Woolworths and Metcash Limited (ASX: MTS), this morning analysts at Goldman Sachs reiterated their conviction buy rating and $18.60 price target on its shares.

This price target implies potential upside of 11.6% for its shares over the next 12 months or 15.5% including dividends.

What did Goldman Sachs say?

Goldman appears confident that Coles will finish FY 2020 strongly and has revised its sales forecasts higher. And while it does have concerns over margin pressures, it feels Coles is better positioned to limit the damage.

The broker commented: “While the sales trends remain strong across the industry, margins have underwhelmed but the outlook for margins over the remainder of CY20 look supportive. We revise 4Q20 LFL growth for the Food division to +8.5% and for the Liquor division to +8%, reflecting the stronger than expected industry growth trends.”

“Over 2H20, we anticipate COL’s cost out program and earlier timing of EBA implementation will limit the downside to margins compared to that anticipated by WOW’s update. We have revised 2H20 Food EBIT margins from 4.2% to 4.0% (+10bps on pcp). Overall, FY20 Food EBIT has been reduced by -1.6% and Group EBIT by -1.5%. We revise pre-AASB16 FY20 EPS to A$0.71, -1.5%,” it concluded.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• ASX supermarket shares on the radar
• ASX 200 Weekly Wrap: ASX back in the green
• 3 high quality ASX dividend shares for income investors to buy
• These 3 ASX ETFs are yet to recover from the market crash

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Woolworths 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 Leading broker tips the Coles share price to storm higher from here appeared first on Motley Fool Australia.

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

Volatility is a funny word. When we hear it we don’t think of our portfolio dropping by, say, 40%. Yet if you can withstand swings like this then there are some great investment opportunities available to you. I believe these are the best shares to buy for growth in today’s market.

Although $4,000 sounds like a lot when you are starting out, it is about the limit that I would dedicate to higher-risk activities like investing in growth shares. I would invest $4,000 evenly among the 5 shares below. 

The roaring fintechs

Australia has a fantastic fintech economy. In fact, Afterpay Ltd (ASX: APT) and Xero Limited (ASX: XRO) are 2 world-class fintechs. Within this sector, I think the following 2 companies are the best shares to buy.

Sezzle Inc (ASX: SZL) is a great share with a fantastic sales track record. In addition, this buy now pay later company has a great strategy to target millenials and Gen Z, customers.  It is also a native of the USA, the world’s largest potential buy now pay later retail market at US$5 trillion. I would place $1,000 into Sezzle.

Pushpay Holdings Ltd (ASX: PPH) runs donor management systems for faith-based, non-profit and education organisations. They are already across Australia, Canada and the USA. As with Sezzle, if you are going to build donor management systems for faith-based communities, then the US is the market to be in. I would invest $1,000 in Pushpay.

Best shares to buy in tech

If you are investing purely for growth then these 2 shares are ones I would look at very seriously.

Electro Optic Systems Hldg Ltd (ASX: EOS) is a technology company based in the defence and space industries. It is quite an amazing company and I had no idea that we had anything like this. Its primary focus is in sensor technology. It’s developing the technology to help with over 500,000 pieces of space debris travelling at around 30,000 km per hour. The company also develops weapons systems. 

Altium Limited (ASX: ALU) is the PCB design software manufacturer that is domiciled in the USA. It is a proven market player and has been able to grow sales, on average, around 16% every single year for the past 10 years. I believe that it is still growing into the market space and the share price is likely to continue to see decent growth.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• Afterpay share price on watch after reaching 1 million UK customers
• Invest like Warren Buffett by buying and holding these ASX 200 shares
• Where to invest $500 into ASX shares right now
• Afterpay share price up 550% since February. Is it too late to buy?

Daryl Mather owns shares of Electro Optic Systems Holdings Limited and Sezzle Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Altium, Electro Optic Systems Holdings Limited, and Xero. The Motley Fool Australia owns shares of and has recommended PUSHPAY FPO NZX. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Electro Optic Systems Holdings Limited and Sezzle Inc. 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 Best growth shares to buy with $4,000 appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3hX6VHm