The S&P/ASX 50 index is home to 50 of the largest and most liquid shares listed on the ASX by float-adjusted market capitalisation.

While this doesn’t necessarily mean that they are the best shares to invest in, there are a number on this index that I believe would be safe and strong options for investors.

Three that tick a lot of boxes for me are listed below:

BHP Group Ltd (ASX: BHP)

The first ASX 50 share I would consider buying is BHP. I believe it is the highest quality option in the resources sector due to its diverse, low cost, and world class operations. In addition to this, with the prices of many of the key commodities it produces remaining favourable, I believe BHP is well-positioned to deliver strong results in both FY 2020 and FY 2021. In light of this, I think the risk/reward on offer with its shares at the current level is compelling.

Cochlear Limited (ASX: COH)

Another  ASX 50 share which I would consider buying is Cochlear. It is a hearing solutions company which specialises in cochlear implantable devices. Given that its products are among the best in their class, I believe Cochlear is well-positioned for growth over the long term due to an expected increase in demand as populations age. The WHO estimates that there will be 1.5 billion people over the aged of 65 by 2050. This will be almost triple the number of over 65s globally 2010.

Transurban Group (ASX: TCL)

A final ASX 50 share to consider is Transurban. It is a toll road operator with a number of key roads in Australia and North America. Its performance is likely to underwhelm in the immediate term due to a collapse in traffic during the pandemic. However, with things now normalising, I believe it could be a great time to consider a long term and patient investment.

More reading

• Are the Rio Tinto, Fortescue and BHP share prices a buy right now?
• ASX 200 Weekly Wrap: ASX bulls crash through 6,000 points
• 3 high quality ASX dividend shares you can buy today
• 5 things to watch on the ASX 200 on Tuesday
• 3 quality ASX 200 shares to buy and hold until at least 2030

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 Cochlear Ltd. The Motley Fool Australia owns shares of Transurban Group. The Motley Fool Australia has recommended Cochlear 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.

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The Boral Limited (ASX: BLD) share price has risen by 46.7% since the turn of the market on 22 May. It remains down year to date but could be heading higher with sales likely to benefit from the government’s ‘HomeBuilder‘ stimulus package. Boral shares are selling at a current price to earnings ratio (P/E) of 25.59, 3 points higher than their 10-year average. 

The construction materials manufacturer has seen poor performance in recent times and the sudden jump in the Boral share price has caught many investors unaware.

What’s driving the Boral share price?

With more than a 45% leap in only a couple of weeks, the Boral share price is appreciating faster than many of its S&P/ASX 200 Index (INDEXASX: XJO) peers. There are a number of factors at play here. 

Firstly, the company won a legal battle against Wagners Holding Company Ltd (ASX: WGN) in Queensland last week. Boral is Wagners’ largest cement customer and was accused of trying to force down cement contract prices. As a result of the ruling, Boral will continue to purchase cement from Wagners until 2031 at lower rates, reflecting competition in the marketplace.

This followed a snap investment by Kerry Stokes’ company Seven Group Holdings Ltd (ASX: SVW), purchasing 10% of the company. Seven Group capitalised on a shake up in the MSCI index last week, buying the Boral shares as investors off loaded them prior to the company being moved out of the index. 

I believe Seven Group is likely to push for a seat on the Boral board. It may also increase its shareholding in a bid to bolster its influence. 

What are the issues for Boral?

Boral posted a reduction in interim profit of 39% in February amidst a weak outlook for Australian sales. The Boral share price has also had a generally lacklustre performance over the past couple of years. The company is, however, currently undertaking a strategic review with Macquarie Capital and Flagstaff Partners. It is also searching for a replacement for current CEO Mike Kane.

Furthermore, talk of asset sales are swirling around the company. Some industry analysts are suggesting the US-based stone business would be easiest to divest, with Boral’s light building products being substantially harder to move. In September 2019, however, investment banker John Wylie approached Boral’s chairman suggesting a company break-up. Boral chose to reject this recommendation.  

Foolish takeaway

I believe the Seven Group position in Boral, combined with a strategic review underway, bodes well for the Boral share price. With positive market sentiment likely to continue in the short term, and action afoot to correct lagging performance, I believe we will continue to see rises in the Boral share price.

More reading

• Fund managers have been buying these ASX shares
• This embattled ASX 200 company could be the next M&A target
• These ASX shares are set to get a big boost from the next big government stimulus
• These 5 ASX 200 shares were last week’s biggest winners
• ASX 200 Weekly Wrap: Surging bank shares push ASX toward 6,000

Motley Fool contributor Daryl Mather 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.

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The S&P/ASX 200 Index (ASX: XJO) is going bananas today – there’s no other word for it (well, polite enough to publish that is).

At the time of writing, the ASX 200 is up another 2.51% to 6,149 points – smashing through the 6,000-point mark once again after last week’s dalliance.

ASX investors might now be wondering if this rally is getting a little overheated, especially if you consider the ASX 200 has added more than 12% in just the last month.

But one analyst is predicting this could just be the start of a new rally.

Dale Gillham, chief analyst of Wealth Within has just told the Australian Financial Review (AFR) that he expects the ASX 200 to continue to power ahead in the coming weeks.

The AFR quotes Mr Gillham as stating:

I expect the [Australian] market to continue to rise over the next few weeks into mid to late June, although there is a possibility it could continue to rise into July… There is some short-term resistance around 6200 points, however, I believe the market will most likely move through this to the next level of resistance at around 6600 points over the next two weeks.

This comes after markets around the world take off after their shellacking in March. The US Nasdaq index hit all-time highs overnight (yes, you read that right). Meanwhile, late last week the Dow Jones Industrial Average crashed through the 27,000 points mark for the first time since early March.

Back home on the ASX 200, we are now at levels we saw in early 2019 – and before that just prior to the global financial crisis back in 2007.

What’s next for ASX 200 shares?

If Mr Gillham is right, we look set to enjoy a fantastic few weeks on the ASX boards. An ASX 200 at 6,600 points would represent a further upside of another 7.3% for ASX shares.

Whilst this is obviously good news for investors, I am starting to get worried that the ASX 200 is becoming even further detached from reality. Yes, the threats from the coronavirus pandemic seem to be receding. But the damage the economy will sustain is still vast – and the true extent of this damage is not completely clear right now.

The ASX 200 is pricing in a rapid recovery. I think the heights of the ASX 200 might be questioned down the road if nothing short of a flawless return to a pre-coronavirus level of economic activity takes place.

But for now, let’s all enjoy the rampant bull market and keep our fingers crossed that I’m being too pessimistic!

More reading

• What 2020 has taught us about investing
• Leading brokers name 3 ASX 200 shares to buy today
• Flight Centre share price and other ASX 200 travel shares look set to continue rising
• Will ASX 200 shares hit a record high in June?
• ASX 200 jumps 2.5%: Big four banks surge higher, CSL announces an acquisition

Motley Fool contributor Sebastian Bowen 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.

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