The ASX big bank shares have staged a U-turn and are trading higher as Morgans urge investors to buy these stocks with one exception.

The turnaround by the big banks helped the S&P/ASX 200 Index (Index:^AXJO) recover from morning losses with the index gaining 0.5% during lunch time trade.

But the big banks are outperforming the market. The Australia and New Zealand Banking GrpLtd (ASX: ANZ) share price is the best performer with a 1.7% jump to $19.06 at the time of writing.

The Commonwealth Bank of Australia (ASX: CBA) share price isn’t far behind with a 1.5% increase to $69.72, while the National Australia Bank Ltd. (ASX: NAB) share price and Westpac Banking Corp (ASX: WBC) share price added just under 1% each.

Not so bad debt

The positive sentiment coincided with Morgans’ report that stated too much bad news have been factored into the sector.

The market marked down the big banks on worries about rising bad debts due to the COVID-19 shutdown of our economy.

“We believe the bad debt damage being factored into current major bank share prices is overdone with the exception of CBA, which is one of the key reasons why CBA is our least preferred major bank,” said the broker.

“WBC is the only major bank where we believe the bad debt damage being priced in is greater than that experienced during the GFC, and this is one of the key reasons why WBC remains our preferred major bank.”

ASX big banks to buy now

The remaining two big banks are also rated as “add” (equivalent to “buy”) by Morgans with ANZ Bank only just getting upgraded from “hold”.

The headwinds the sector is facing due to the pandemic isn’t as severe as those experienced during the GFC, according to the broker.

This is because the federal government and the Reserve Bank of Australia (RBA) have moved quickly to support the economy and banking sector.

“We generally describe the current credit loss provisioning of the major banks as effectively being predicated on the assumption of a ‘squeezed-U-shaped’ recovery for the Australian economy,” added Morgans.

“At this stage this continues to look justified, particularly given the easing of lockdown restrictions being experienced in Australia.”

Lost dividends

But it isn’t all good news. The broker thinks that ANZ and Westpac won’t pay their interim dividends, and the banks will announce this bad news in August.

Both banks deferred their dividend decision when they reported their first half profit results one to two months ago.

The broker also believes that CBA will defer its final dividend decision cum August, but will make this payment in November.

The other three banks are tipped to declare their final dividends in the same month.

More reading

• Top brokers are urging you to buy these 3 ASX stocks today
• Leading brokers name 3 ASX shares to buy today
• Here are 3 ASX 200 shares with dividend yields over 8%
• ASX 200 flat: Altium update disappoints, Metcash posts full year loss
• Is the Domino’s Pizza share price a good buy at $68?

Motley Fool contributor Brendon Lau owns shares of Australia & New Zealand Banking Group Limited, Commonwealth Bank of Australia, National Australia Bank Limited, and Westpac Banking. 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 Why Morgans is urging investors to buy ASX big bank stocks today appeared first on Motley Fool Australia.

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With so many shares to choose from on the ASX, it can be hard to decide which ones to buy.

The good news is that brokers across the country are doing a lot of the hard work for you.

Three top shares that leading brokers have named as buys this week are listed below. Here’s why they are bullish on them:

Adairs Ltd (ASX: ADH)

According to a note out of Goldman Sachs, its analysts have retained their buy rating and lifted the price target on this homewares retailer’s shares to $2.80. Goldman likes Adairs due to its strong online business, improving supply chain, and attractive valuation. In respect to the latter, the broker estimates that Adairs’ shares are changing hands at just 10x FY 2022 earnings. It believes this offers a compelling risk/reward. I think Goldman makes some great points and Adairs could be worth considering.

Nick Scali Limited (ASX: NCK)

A note out of Citi reveals that its analysts have retained their buy rating and lifted their price target on this furniture retailer’s shares to $8.20. It believes that its strong order book is a sign that FY 2021 will be a solid year. In addition to this, the broker feels that Nick Scali’s target demographic are less likely to lose their jobs once the JobKeeper program ends. I think Citi could be on the money with this one and Nick Scali could be worth a closer look.

Westpac Banking Corp (ASX: WBC)

Analysts at Morgans have retained their add rating and lifted the price target on this banking giant’s shares to $22.50. According to the note, the broker believes that the bad debt damage being factored into its share price is overdone. Morgans doesn’t believe the bad debt experience during the pandemic will be as severe as that experienced during the GFC. I agree with Morgans on Westpac and would be a buyer of its shares.

More reading

• Here are 3 ASX 200 shares with dividend yields over 8%
• The NAB share price has fallen 24%. Should you buy?
• ASX 200 Weekly Wrap: ASX back in the green
• Beat low interest rates with Telstra and these ASX dividend shares
• Consider these blue chip ASX shares for strong dividend yields

Motley Fool contributor James Mickleboro owns shares of Westpac Banking. 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 Leading brokers name 3 ASX shares to buy today appeared first on Motley Fool Australia.

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At the weekend I looked into how investments of $20,000 in a number of popular ASX shares fared over the last 10 years.

Given the success of these investments, I thought I would look at a few shares which I feel investors ought to consider investing $20,000 into today for the next decade.

Here why I think these three ASX shares could provide strong returns for investors:

Bravura Solutions Ltd (ASX: BVS)

I think that Bravura Solutions could be worth considering for a $20,000 investment. Bravura provides software and services to the wealth management and funds administration industries. Demand for its offering has been increasing other the last few years and has underpinned strong earnings growth. The good news is that it has added to its offering over the last 12 months through acquisitions. This has not only strengthened its portfolio, but opened up the company to new and lucrative markets.

iShares Global Healthcare ETF (ASX: IXJ)

Another option to consider investing $20,000 into is the iShares Global Healthcare ETF. I think this exchange traded fund could provide strong returns for investors over the 2020s thanks to the growing demand for healthcare services. This is expected to be driven by improvements in technologies, ageing populations, and increased chronic disease. The iShares Global Healthcare ETF gives investors exposure to the world’s biggest and best healthcare companies. This includes the likes of CSL Ltd (ASX: CSL), Johnson & Johnson, Novartis, and Pfizer.

REA Group Limited (ASX: REA)

A final option I would put $20,000 into is REA Group. It is a leading property listings company with real estate websites in Europe, Asia, the United States, and of course Australia. Although REA Group has experienced a sizeable reduction in listings during the pandemic, it has offset its weaker revenues through cost cutting. I believe this demonstrates the resilience of its business model and positions it well to accelerate its earnings growth when the headwinds it is facing ease.

More reading

• ASX 200 Weekly Wrap: ASX back in the green
• These fantastic healthcare ASX shares could make you wealthy
• How to turn $20,000 into $250,000 in 10 years with ASX shares
• How to become a millionaire in 25 years with $20 a day
• Why I’m desperate to add CSL and 2 other ASX shares to my portfolio in 2020

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 Bravura Solutions Ltd and CSL Ltd. The Motley Fool Australia has recommended Bravura Solutions Ltd and REA Group 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 $20,000 into ASX shares immediately appeared first on Motley Fool Australia.

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