The Newcrest Mining Limited (ASX: NCM) share price has edged 4.10% higher in 2020, but is the ASX gold share in the buy zone?

Why the Newcrest Mining share price has outperformed in 2020

It’s been a reasonably good year for investors in ASX gold shares. The coronavirus pandemic has spooked investors and hurt the global economy. That means shares in Aussie gold miners like Newcrest have managed to outperform the S&P/ASX 200 Index (ASX: XJO).

The index is down nearly 13% this year despite climbing 1.10% higher yesterday. That means the Newcrest Mining share price has outperformed the ASX 200 benchmark by around 17%.

Those are some pretty handy numbers given the current market. As the global gold price continues to climb, so too does Newcrest’s value.

The Aussie gold miner now boasts a $25.1 billion market capitalisation. That means it is well entrenched inside the ASX 50 and could be climbing higher. 

But is now a good time to buy the ASX gold miner?

I personally think Newcrest shares are a touch overvalued right now. Investors are willing to pay a premium for safety, which has pushed Newcrest’s price-to-earnings (P/E) ratio to 28.45. 

With a dividend yield of 1.05%, Newcrest does offer some portfolio income while other ASX shares are slashing distributions. However, I still think there is a bit of panic buying surrounding ASX gold shares right now.

The ASX Resources sector could well outperform in 2020. There is a strong technical environment despite some question marks over exports and our relationship with China.

However, overall commodity prices are high, which is good for the Aussie economy. If the Aussie gold miner can continue production and post good sales numbers in August, the Newcrest Mining share price may be a bargain at $31.09 per share.

Foolish takeaway

The Newcrest Mining share price has managed to edge higher and significantly outperform in 2020. I think whether or not that trend continues is the big question.

In my mind, where the Aussie dollar goes and how geopolitical tensions play out in the coming months will be key.

More reading

• Is the NAB share price cheap today?
• Here are all the ASX 200 companies that announced capital raisings in May
• The big oil price recovery and bounce in ASX oil stocks are bringing out the bears
• 2 ASX 200 shares to watch on Tuesday
• Where to invest $5,000 into ASX 200 shares immediately

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.

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National Australia Bank Ltd. (ASX: NAB) shares have had a bumpy start to the year. The Aussie bank is trading at $18.07 per share at the time of writing. This is down 26.63% from where it started 2020 at $24.63.

So with all that’s happening on the ASX right now, is the NAB share price in the buy zone?

Why the NAB share price has slumped lower in 2020

The S&P/ASX 200 Index (ASX: XJO) is down 12.92% this year which means NAB shares are underperforming the index by quite a margin.

It’s not the only ASX bank share doing it tough right now. However, NAB has a large business banking segment that could be weighing on shareholders’ minds.

The coronavirus pandemic has spooked investors and raised question marks about global economic growth. Closer to home, many are wondering about loan performance in a downturn and the NAB share price has been sinking as a result.

NAB recently announced $807 million worth of pandemic-related provisions in its half-year earnings. The government stimulus programs are helping to prop up the economy but they won’t last forever.

However, there are signs that things are improving. Even the ‘best case’ forecasts have been bettered here in Australia and the economy is starting to re-open.

That could be good news for the NAB share price and investors. If businesses can start generating cash flow sooner than expected, loan impairments and lost earnings may be mitigated.

I think ASX bank shares can continue to be strong dividend shares in the future. That’s despite recent dividend cuts which will affect short-term portfolio earnings.

There are some who believe the neobanks will rise up and overtake the Big 4 in the coming decade. Even if that is the case, NAB has a stake in that game through its ownership of UBank.

Foolish takeaway

If you’re a buy and hold investor, I feel the NAB share price could represent a bargain at $18.07.

ASX bank shares could be in for a bumpy ride in 2020 but I still think the long-term picture is positive.

More reading

• Is the Newcrest Mining share price a buy?
• The big oil price recovery and bounce in ASX oil stocks are bringing out the bears
• 2 ASX 200 shares to watch on Tuesday
• How to value the big four ASX banks
• Where to invest $5,000 into ASX 200 shares immediately

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.

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The Australia and New Zealand Banking GrpLtd (ASX: ANZ) share price has been a positive performer on Tuesday.

In morning trade the banking giant’s shares climbed 1.5% to $18.31. This follows the release of an announcement relating to an asset sale today.

What did ANZ announce?

This morning ANZ announced that it has agreed to sell its New Zealand asset finance business, UDC Finance, for NZ$762 million to Japan’s Shinsei Bank.

This sale follows a strategic review of the UDC Finance business. It is also in line with its strategy to simplify its business.

According to the release, the sale will provide ~A$439 million (~10bps) of Level 2 Group CET1 capital at settlement.

It will also release more than NZ$2 billion of funding provided by ANZ New Zealand, further strengthening its balance sheet position.

ANZ Bank New Zealand’s CEO, Antonia Watson, was pleased with the asset sale and believes it is a significant vote of confidence for the New Zealand economy.

She said: “With a strong outlook for infrastructure and agriculture projects as the New Zealand economy rebuilds post-Covid-19, there is a significant role for UDC Finance to play. As such, it needs an owner that can invest in and grow the business.”

“Shinsei Bank intends to preserve UDC’s operations, retain UDC employees and provide long term capital to maintain and grow customer lending in New Zealand. The sale will also mean UDC Finance will continue to operate as an independent finance company and enhance competition in the asset finance market,” Ms Watson added.

Is the ANZ share price in the buy zone?

The ANZ share price may have charged notably higher over the last couple of weeks, but I don’t think it is too late to invest.

Although it isn’t my top pick in the sector, I think it remains a great option at the current level. Especially given its improving balance sheet and the quicker than expected reopening of the Australian economy.

More reading

• The big oil price recovery and bounce in ASX oil stocks are bringing out the bears
• How to value the big four ASX banks
• How bankable are the big four ASX bank shares in 2020?
• 5 ASX 200 winners and 3 losers from last week
• ASX 200 Weekly Wrap: Surging bank shares push ASX toward 6,000

Motley Fool contributor James Mickleboro 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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