Jun.01 — Lindsey Ford, fellow at The Brookings Institute, discusses the rising tensions between the U.S. and China, Hong Kong’s special trading status with the U.S. and the probability of sanctions against China. She speaks on “Bloomberg Markets: Asia.”
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The S&P/ASX 200 Index (Index:^AXJO) is extending its bull run today as investors continue to pile back into equities best placed in the post-coronavirus economic recovery.
While value buys are getting increasingly hard to find after the near 30% bounce in the market since the low point of the COVID-19 bear market, there’s still a good handful of ASX shares that have room to run higher.
Here are the three latest buy-ideas from top brokers.
The first is Freedom Foods Group Ltd (ASX: FNP) with Goldman Sachs reiterating its “buy” recommendation on the stock, which also happens to be on its “conviction” list.
This is despite the group’s latest warning that its second half earnings before interest, tax, depreciation and amortisation (EBITDA) would take a big hit.
A number of one-off blows from the COVID-19 pandemic is behind the bad news, including the shutdown of its OOH and Foodservice channels, a $4 million bad debt provisioning and a $5 million restructuring charge.
“We are confident the broader strategy anchored around nutritional dairy and plant based beverages remains on track,” said the broker.
“We don’t see FNP needing to raise capital in the short term despite elevated leverage…[and] expect earnings to grow significantly in FY21.”
Goldman’s price target on the stock is $5.75 a share, or a 64% upside to the current share price.
The dramatic rebound in the oil price may have put a rocket under the Santos Ltd (ASX: STO) share price recently, but Credit Suisse thinks there’s more room to zoom.
The commodity bounced from a negative US$30+ a barrel to around US$35 a barrel, and the recovery bodes well for Santos’ two growth projects Dorado and Barossa.
Credit Suisse believes the breakeven for Dorado is as low around circa US$30 a barrel and that Santos will give the final green light to start on the Barossa project.
“We see STO in the wake of COVID-19 sell-off as potentially more leveraged to an oil recovery over the coming 18 months vs peers,” said the broker.
“Most of STO’s growth should readily return as the market recovers, and STO has leverage to long-term oil price assumptions should they return to pre-COVID-19 levels.”
Credit Suisse rates the stock as “outperform” with price target of $6.61 a share.
Finally, Morgan Stanley upgraded its earnings forecasts for auto parts group Bapcor Ltd (ASX: BAP) and reiterated its “overweight” recommendation on the stock.
“During lockdown we estimate industry sales were down >25% yoy in Australia and more like 85% in NZ,” said the broker.
“Our numbers previously baked in longer duration closures and a more measured ramp up. We now essentially see that pulled forward resulting in a 32% upgrade to FY21e EPS and 10% in FY22e.”
The broker lifted its price target on Bapcor to $7.20 from $6 a share, which suggests a 23% upside for the stock.
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Motley Fool contributor Brendon Lau has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Bapcor. The Motley Fool Australia has recommended Freedom Foods 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 Top brokers are urging you to buy these ASX shares today appeared first on Motley Fool Australia.
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For the richest Australians, getting rich is only half the journey to achieving long-term wealth. The other half is maintaining and building their riches.
Australia has seen many billionaires over its history. But it’s those Australians able to keep and grow their fortunes who wind up having the biggest impact on our economy and cementing a lasting legacy.
The secrets of the rich are often hidden from us ‘ordinary people’.
But according to reporting in last week’s Australian Financial Review (AFR), it’s really not rocket science as to how the richest Australians have managed to not only keep their wealth, but increase it significantly over the past decade. In fact, the AFR reports that Australia’s top 20 richest people have collectively grown their wealth by almost 30% over the past year.
As reported in the AFR, mining baron Gina Rinehart regained the title of Australia’s richest person. Ms Rinehart clocked in with a fortune estimated at $21.2 billion, up a staggering 53% over the past 12 months. High iron ore prices have been exceedingly kind to Ms Rinehart, pushing her to the No. 1 spot for the first time since 2015.
But the second and third places went to 2 Australians who decided not to call Australia home. Mike Cannon-Brookes and Scott Farquhar are the co-founders of Atlassian Corporation PLC (NASDAQ: TEAM). Atlassian is a United States-listed company that develops software solutions for business. The company’s shares have exploded in recent months, propelling the fortunes of Cannon-Brookes and Farquhar to more than $18 billion each.
Hui Wing Mau, a Hong Kong-based property developer took out the fourth spot with a fortune of $17.8 billion.
Gina Rinehart’s fellow iron ore enthusiast Andrew ‘Twiggy’ Forrest of Fortescue Metals Group Limited (ASX: FMG) also chalked up a top year, achieving the fifth spot. His fortune is now estimated at $17.6 billion, an eye-watering 120.6% higher than this time last year.
There’s not much point dissecting the list of richest Australians out of envy. Rather, consider the list with a view to the lessons we can draw. That is, what can we learn about how the rich get and stay wealthy? And how do we apply this to our own wealth creation?
Here is a common theme that has emerged. Two of Australia’s biggest wealth creation hotspots over the past year have been in mining and tech. Our country’s iron ore is cheap and abundant. I believe those companies that can harness it will continue to benefit from emerging markets like China and India. I also feel that to dismiss mining and ASX resources shares as ‘old fashioned’ is to do so at your own peril.
Turning to tech, we can see how just one Aussie tech company can build the fortunes of our second and third richest people whilst helping put Australia on the world stage. Atlassian isn’t even a large tech company by American standards, with its market capitalisation of US$45.48 billion. Nonetheless, it has succeeded in creating serious wealth for its founders and other share holders. If one Aussie company can achieve this, hopefully many others can follow in its footsteps!
In my view, considering how and where the rich are making their money can be a very useful guide for your own investing. So don’t envy these rich Australians, instead take inspiration from them. Then perhaps one day you’ll join them!
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Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Atlassian. 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 How our richest Australians are getting richer appeared first on Motley Fool Australia.
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