Stock Pick

  • Is the BHP share price cheap right now?

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    The BHP Group Ltd (ASX: BHP) share price has had a rollercoaster start to 2020. Shares in the Aussie iron ore miner are down 9.02% in 2020 but are still managing to outperform.

    For context, the S&P/ASX 200 Index (ASX: XJO) has slumped 12.70% from where it began the year.

    The BHP share price has started to gain some momentum in recent weeks. It’s currently the largest ASX 200 share by market capitalisation and is valued at $165.5 billion.

    But with all that’s happening in the global and domestic economy, is BHP a cheap share to buy right now?

    Why the BHP share price could be cheap today

    I think it’s fair to say I’ve never been a huge resources sector investor. I am bullish on the future of renewable energy and the role that graphite, manganese and aluminium can play in that future.

    However, ASX resources shares can be tough to value. Anything that relies on commodity prices as the basis for its value is likely to be volatile.

    We’ve seen the BHP share price fall as low as $24.05 on 13 March before rebounding strongly to its current $35.41 valuation. That’s good news for shareholders who managed to buy the dip but is the current price a bargain?

    Iron ore prices are starting to rebound which is positive for BHP earnings. The group’s shares are currently yielding 6.02% but there’s no guarantees this will be maintained by the August earnings season.

    I think the potential for an infrastructure boom is a big plus. If governments around the world look to infrastructure for stimulus, I’d expect the iron ore price to surge.

    This could have a knock-on effect for the BHP share price and send it back towards its 52-week high of $42.33.

    Foolish takeaway

    There’s no such thing as a safe bet in ASX 200 shares and this is especially true at the moment. However, the BHP share price could be a solid large-cap with upside potential to help boost a diversified portfolio beyond 2020.

    For more ASX dividend shares like BHP, I wouldn’t miss this top Fool pick today!

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    Motley Fool contributor Ken Hall 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 Is the BHP share price cheap right now? appeared first on Motley Fool Australia.

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  • 3 high quality ASX blue chip shares to buy in June

    asx blue chip shares

    Are you looking to add a few ASX blue chip shares to your portfolio in June? The good news is there are plenty of quality options to choose from right now.

    To narrow things down, I’ve picked out three ASX blue chip shares which I believe offer compelling risk/rewards. They are as follows:

    Goodman Group (ASX: GMG)

    The first ASX blue chip share to consider buying is Goodman Group. I think the integrated commercial and industrial property group is a great option due to the strength and positive outlook of its portfolio. This is largely due to its exposure to industries benefiting from structural tailwinds like ecommerce. I expect these assets to be in demand for a long time to come and underpin solid earnings and distribution growth over the next decade.

    ResMed Inc. (ASX: RMD)

    ResMed is another ASX blue chip share which I would buy today. I think the medical device company is a great buy and hold option due to the proliferation of sleep apnoea. Education around this sleep disorder is increasing and looks likely to lead to greater numbers of diagnoses over next decade. This should mean that demand for ResMed’s industry-leading sleep treatment solutions continues to grow and drives strong earnings growth

    SEEK Limited (ASX: SEK)

    A final ASX blue chip share to consider buying is SEEK. I’m a big fan of the job listings company due to its market-leading ANZ business and its rapidly growing China-based Zhaopin business. While a lot of investor focus is on its ANZ business, I would argue that the real star is Zhaopin. In the first half it contributed 47.8% of total revenue. This compares to the ANZ business, which accounts for 25.6% of its revenue. Given how lucrative the China market is, I believe Zhaopin will underpin strong growth for many years to come once the crisis passes.

    Looking for more shares to invest in? Then check out the five recommendation below which look great value…

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    One is a diversified conglomerate trading over 30% 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 significant discount 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%.

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    Motley Fool contributor James Mickleboro owns shares of SEEK Limited. The Motley Fool Australia has recommended ResMed Inc. and SEEK 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 3 high quality ASX blue chip shares to buy in June appeared first on Motley Fool Australia.

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  • Tesla’s Outlook Starting to Clear up With ‘Fremont Engines Running,’ Says 5-Star Analyst

    Tesla’s Outlook Starting to Clear up With ‘Fremont Engines Running,’ Says 5-Star AnalystWhen looking at V-shaped recoveries, they hardly come more V-shaped than that of Tesla’s (TSLA). Hitting all-time highs in February, then plummeting along with the rest of the market, the EV pioneer’s fortunes appear to be speeding upwards yet again, as the swift recovery has led Tesla stock to a year-to-date gain of 115%.According to Wedbush analyst Daniel Ives, the moving parts are all falling into place for Tesla. The fact that Fremont is up and running again following the resolution of the Musk vs Alameda County quarrel combined with strong demand in China for Model 3 vehicles suggest a “solid May and June likely in the cards and clear momentum heading into 2H.”That said, it is China and the attendant opportunity that is mostly on Ives’ mind. The 5-star analyst believes the China growth story is “worth $300 per share to the stock.”In a difficult pandemic-driven environment, Chinese demand for Model 3s remains “a ray of light” for Tesla, with the Shanghai-based Giga 3 factory seemingly on the path to deliver 100,000 Model 3 units in its first fully operational year.Ives argues there is increasing demand for electric vehicles in China, and maintains “EV penetration is set to ramp significantly over the next 12 to 18 months,” with Tesla competing for market share supremacy along with several local and international rivals.Looking ahead, Ives said, “The Street will be closely monitoring demand trends across Europe and China over the coming month as the focus of investors shifts to a more normalized (depending on COVID) environment heading into year-end and 2021 and what this dynamic means for the long-term earnings trajectory going forward.”At this point, however, Ives prefers to watch this bullish story play out from the sidelines. The analyst keeps a Neutral rating on TSLA, although the price target gets a significant bump – moving up from $600 to $800. Despite the increase, the target still indicates possible downside of 9%. (To watch Ives’ track record, click here)Opinion on the Street regarding Musk & Co is almost evenly split. 9 Buys and Holds each, along with 10 Sells add up to a Hold consensus rating. However, it appears most believe Tesla has surged enough for now, as the average price target comes in at $633.14, and implies the analysts expect shares to drop by 28% over the next 12 months. (See Tesla stock analysis on TipRanks)To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

    from Yahoo Finance https://ift.tt/2zVg9CT

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