Stock Pick

  • Afterpay and 2 more ASX 200 shares to watch this week

    Share investor with chess pieces deciding to buy or sell ASX shares

    Last week was another up and down week for ASX 200 shares as investors weighed up the possibility of a renewed coronavirus wave against government stimulus measures.

    The S&P/ASX 200 Index (ASX: XJO) climbed 1.6% to 5,942.60 points as the recent bull run continued to push share valuations higher.

    While many tech and consumer staple companies surged in value, ASX 200 travel and media shares were hit hard.

    Last week I had Woodside Petroleum Limited (ASX: WPL), Scentre Group (ASX: SCG) and Newcrest Mining Limited (ASX: NCM) shares on my watchlist.

    The Scentre share price slumped 3.5% last week while Newcrest and Woodside shares climbed 2.4% and 2.8% higher, respectively.

    Below are the 3 ASX 200 companies on my watchlist for this week as we prepare for what could be another good Aussie share market week.

    3 ASX 200 shares to watch this week

    One of the top shares that I’m watching this week is Transurban Group (ASX: TCL). 

    The Transurban share price climbed 3.1% higher last week to close at $15.16 per share. That means the Aussie infrastructure group’s shares have now surged 51.0% higher since 19 March.

    I think Transurban could be a dark horse ahead of the August earnings season. The nature of COVID-19 could mean more people on toll roads rather than public transport in 2020 and 2021. 

    That would be good news for the ASX 200 infrastructure group’s earnings and its share price this year.

    I always like to look at the previous week’s biggest movers as well. That means Afterpay Ltd (ASX: APT) is on my watchlist for this week after landing in the winner’s column last week.

    The Afterpay share price surged 13.2% higher last week and continues to hit new record highs. Afterpay’s market cap has now rocketed to $15.7 billion and could be heading even higher.

    Strong stimulus measures have propped up the Aussie economy in 2020. Particularly in Afterpay’s core demographics of young people, stimulus measures could mean more spending in discretionary sectors like retail.

    If bad debts remain low then Afterpay could increase its sales both in Australia and abroad in 2020. That could accelerate the ASX 200 buy now, pay later group’s share price growth heading into next year.

    My final ASX 200 share to watch this week is Southern Cross Media Group Ltd (ASX: SXL). 

    The Southern Cross share price jumped 2.6% higher on Friday to close the week the same as it started at $0.20 per share.

    The Aussie media group has been one of the most volatile ASX shares since mid-February.

    While I don’t know which way the Southern Cross share price is headed this week but it could be a good gauge of where investors think the media sector is headed in 2020.

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    Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO and Transurban Group. The Motley Fool Australia has recommended Scentre Group. 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 Afterpay and 2 more ASX 200 shares to watch this week appeared first on Motley Fool Australia.

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  • The ASX stocks worst hit by second wave COVID-19 fears

    Investors are torn between a pick-up in economic activity and fears of a second wave of COVID-19 cases.

    The resurgence in the number of coronavirus cases in Victoria is adding to worries as the US continues to struggle to contain the outbreak.

    While the S&P/ASX 200 Index (Index:^AXJO) swung between gains and losses to end flat on Monday, travel-related ASX stocks were the standout losers from today’s trade.

    About to be hit by another wave?

    It looks like state borders will be locked down for longer than most expected with Victoria reporting 16 new COVID-19 cases over the weekend, according to the Australian Financial Review.

    What’s even more worrying is that the source of the virus is unknown in a number of these cases.

    Adding to the gloom in the sector are predictions that international travel is off the agenda until sometime in 2021. It may be the later half of next year before we can travel overseas or welcome international tourists.

    ASX stocks worst hit by second wave fears

    Little wonder the Corporate Travel Management Ltd (ASX: CTD) share price is the second worst performer on the ASX 200 today with a 8% crash to $11.03.

    But its peers aren’t far behind. The Webjet Limited (ASX: WEB) share price nosedived 5% to $3.78, the Qantas Airways Limited (ASX: QAN) share price dropped 4.1% to $4.19 and the Flight Centre Travel Group Ltd (ASX: FLT) share price declined by a similar amount to $13.05.

    The Sydney Airport Holdings Pty Ltd (ASX: SYD) share price didn’t escape the sell-off with JP Morgan warning that earnings may take longer than expected to recover.

    No place to hide

    The 97% plunge in passenger numbers going through our nation’s largest airport is only part of the problem.

    The airport is likely to have to provide rent relief to its retail tenants while the fees it gets from its lucrative car parks will be nearly non-existent too.

    Don’t count on Sydney Airport paying a dividend this year either, according to the broker. JP Morgan is only tipping a dividend of 25 cents a share in 2021 and 37 cents the following year.

    The broker reckons fair value for the stock is $5.10 and that’s well below Sydney Airport’s closing price of $5.95.

    Foolish takeaway

    There’s really no reason to be buying Sydney Airport in my view with no dividend and little scope for a re-rating in the nearer-term.

    There are much better ASX shares to be looking at in this coronavirus-stricken market. The experts at the Motley Fool have picked a handful that are worth putting on your watchlist.

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    Motley Fool contributor Brendon Lau owns shares of Webjet Ltd. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited and Webjet Ltd. The Motley Fool Australia has recommended Flight Centre Travel 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 The ASX stocks worst hit by second wave COVID-19 fears appeared first on Motley Fool Australia.

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  • Why the share prices of these 3 gold miners climbed higher on Monday

    gold mining

    The share prices of the 3 major ASX gold miners below were higher on Monday following a lift in the gold price. Additionally, they were boosted by reports that the wealthy have been buying up gold, which could suggest a strong rally is coming. Lately, the gold price has also been supported by the decision of the US federal reserve to continue its quantitative easing as the world economy works through the current recession. 

    If your bullish on gold prices, gold mining companies are a great way to gain exposure. As the gold price moves higher they generally see an increase in sale prices of the precious metal. This boosts profits for shareholders.

    Newcrest Mining Limited (ASX: NCM)  

    The Newcrest Mining share price was up 3.69% on Monday. Newcrest has operations in Australia, Canada, Ecuador and Papua New Guinea. In Q3 of the 2020 financial year, Newcrest produced 519,000 ounces of gold. Its margin on this production was $742 per ounce. Since the end of March, the gold price has recovered more than 15%. This means that we can expect the margins that Newcrest receive to be significantly higher in the current period. 

    The Newcrest mining share price has recovered almost 50% from its 52 week low of $20.70. It is up 3.25% since the beginning of the year. 

    Saracen Mineral Holdings Limited (ASX: SAR)

    The Saracen Mineral Holdings share price is up 8.47% on Monday. Saracen is a reliable gold producer and has an impressive 7-year track record of meeting or beating its production guidance. Its production guidance for the 2021 financial year is 600,000 ounces or more. If higher gold prices remain this will fetch over $1.5 billion in revenue for the miner. 

    The Saracen Minerals share price is up 84% from its 52 week low of $2.81. Since June 2015, the Saracen Minerals share price has increased more than 10 fold from $0.45 cents to $5.17 on Monday. 

    St Barbara Ltd (ASX: SBM)

    The St Barbara share price was up 5.96% on Monday. This comes as investors rush into shares offering exposure to the precious metal. St Barbara has operations in Australia, Canada and Papua New Guinea. When St Barbara presented to analysts in May, it forecast that it would produce 385,000 ounces of gold in the 2020 financial year. This is lower than its usual production over the last 5 years and if the miner can boost production at a higher gold price, it could see significantly higher profits for shareholders.

     The St Barbara share price is up 98% from its 52 week low of $1.615. It has returned 17.2% since the beginning of January.

    Want to find more opportunities to make money from ASX companies? Click the link below.

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    Motley Fool contributor Chris Chitty 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 Why the share prices of these 3 gold miners climbed higher on Monday appeared first on Motley Fool Australia.

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