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  • 3 long-term ASX 200 shares I’d buy right now

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    Investing for the long-term is the right way to go with S&P/ASX 200 Index (ASX: XJO) shares.

    We just don’t know what the share market is going to do next week, next month or even for the rest of the year. We can hope it’s going to go up in the short-term, but over the long-term share prices are more likely to do well if earnings rise.

    So which ASX 200 shares will produce good returns? The bigger the business is, the harder it is to grow at a good pace. The law of big numbers makes it difficult to keep up the growth rate. That’s partly why I don’t want to invest in blue chip shares like Westpac Banking Corp (ASX: WBC) and Telstra Corporation Ltd (ASX: TLS).

    But you can still find opportunities which are ASX 200 shares which are market leaders in their respective industries with good growth prospects. Here are three ideas:

    Share 1: Bapcor Ltd (ASX: BAP)

    Bapcor is the leader in automotive parts in Australia. It provides car parts and it also has a growing truck parts division. Burson and Autobarn are two of the biggest divisions. 

    The Bapcor share price was severely sold off during the COVID-19 selloff. It fell 52% between 21 February 2020 and 23 March 2020. Bapcor decided to do a capital raising to strengthen the balance sheet. The ASX 200 share is in a well-capitalised position now.

    FY20 year to date revenue to the end of February 2020 was strong with growth of 12.7% compared to the prior corresponding period. However, Bapcor said the trading performance in March was below expectations with revenue growth of 11.5% which includes the benefit of acquisitions but it was offset by the impact of COVID-19 restrictions.

    The ASX 200 company’s share price has come storming back as restrictions lift. More people are driving again and this should benefit Bapcor as parts in cars fail in more normal numbers again.

    Indeed, Bapcor could actually see more activity as people avoid public transport, using their cars to get around. New car sales are also down heavily, people are more likely to replace car parts than just buy a new car altogether.  

    I’m also very excited by the prospect of growth in Asia as more outlets are opened there.

    Share 2: Challenger Ltd (ASX: CGF)

    Challenger is the market-leader of annuities in the country, it turns a retiree’s capital into a guaranteed source of income.

    The ageing demographics of Australia is a strong tailwind for the ASX 200 share. The number of Australians over 65 is expected to increase by 32% over the next 10 years and 56% over the next 20 years.

    Australia’s superannuation system is also a very powerful factor that should drive Challenger’s future growth. Most employees get a mandatory 9.5% contribution of their wage paid into their superannuation and the long-term tax benefits encourages everyone to add to their super funds.

    Challenger currently has a grossed-up dividend yield of 9.5%. The dividend alone should produce decent returns if it’s maintained.

    Low interest rates are a problem for Challenger, but hopefully interest rates will go back up again in a few years to a more normal level.

    Share 3: Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

    Soul Patts is one of the best long-term ASX 200 shares in my opinion. It’s an investment conglomerate that invests in a variety of different businesses. It has already been going for over a century.

    Some of the shares that it’s currently invested are TPG Telecom Ltd (ASX: TPM), Brickworks Limited (ASX: BKW), Clover Corporation Limited (ASX: CLV), Milton Corporation Limited (ASX: MLT) and Bki Investment Co Ltd (ASX: BKI).

    The Soul Patts management team take a long-term, contrarian approach with the investments. I think that means it’s a lot easier to be long-term with this ASX 200 share too.

    It’s always looking out for new opportunities to invest in. It recently invested in some agriculture assets and it’s now looking to invest in regional data centres. I think these are two attractive industries. 

    Foolish takeaway

    Each of these ASX 200 shares looks good value to me. I think they have good prospects over the next five years. In 2020 Bapcor may prove to be the best investment pick at today’s prices. But for the long-term I’d prefer Soul Patts with its diversification and defensive nature.

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    Tristan Harrison owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Clover Limited. The Motley Fool Australia owns shares of and has recommended Bapcor, Brickworks, Challenger Limited, Telstra Limited, and Washington H. Soul Pattinson and Company 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 3 long-term ASX 200 shares I’d buy right now appeared first on Motley Fool Australia.

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  • Cloudflare sees a 50% increase in traffic, rise in hacking: CEO

    Cloudflare sees a 50% increase in traffic, rise in hacking: CEOCloudflare CEO and Founder Matthew Prince joins Yahoo Fiance’s Alexis Christoforous and Brian Sozzi to discuss a rise in cyberattacks amid the coronavirus pandemic, in addition to its preparation for the 2020 election and more.

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  • American Airlines Is Again the Bearer of Bad News

    American Airlines Is Again the Bearer of Bad NewsAt its current price of $16.49 per share, American Airlines (NASDAQ:AAL) stock is still relatively close to its 52-week low of $8.25. Investors may be tempted to pick up AAL stock because of an assumed impending price bump as flights ramp up.Source: GagliardiPhotography / Shutterstock.com But Main street investors like you and I first need to look at the company's past history, liquidity, and valuation before that. In a beleaguered industry, facing overcapacity for some time to come, and as a laggard with a weak balance sheet, AAL stock is one of the last trades investors should be considering. Recent news only solidifies that notion. More Bad News for American AirlinesOn May 27, American Airlines released a management note outlining their continuing priorities during the pandemic. Management listed adequate cash, a reduction of cash burn rate, and restoring confidence in air travel as the three goals.InvestorPlace – Stock Market News, Stock Advice & Trading Tips * 10 Robotics Stocks on the Technological Cutting Edge The thrust of the filing is that the company feels they have adequate liquidity. But in order to reduce expenses they will be reducing staff by 39,000 through voluntary leave and early retirement. Continued Efforts to Stop the Bleeding in AAL StockThe company is attempting to streamline operations to decrease daily cash burn. AAL will prioritize fleet optimization and restructured organizational teams. The company plans to fly 100 fewer planes by next summer and will be reducing and retiring mainly widebody planes from the fleet. The company's current fleet is roughly an 80/20 percent mix of narrow body to widebody aircraft. And American currently maintains a total fleet of 871 planes.AAL's management is prioritizing restructuring will prioritize future leaders and talent. Management and support staff is to be about 30% leaner moving forward to accommodate the reduction in operations. American stresses this decision is voluntary and that thereafter, involuntary separations will be announced in July.Needless to say, the company will have a battle on its hands in trying to incentivize workers to voluntarily quit in this employment environment. Those who American will "involuntarily separate" in July will have a union acting on their behalf. American Airlines stock will react as this plays out. I don't expect it to be a boon to the share price. Underlying Cash ProblemsManagement has also stated that it expects the company to have $11 billion (page 44) in liquidity at the end of second quarter. American Airlines forecasts that their second quarter daily cash burn will average $70 million. Further, June average daily cash burn is expected to decrease to $50 million. Utilizing some quick math, we can extrapolate that AAL will burn through $6.3 billion in Q2 (90 days in a quarter x $70 million in daily average cash burn).Such sustained losses hurt the company in the short term, surely. But American Airlines has also had to push out the maturity dates on its debt as it refinances new liquidity. So even when people resume flying, American's management will struggle with finding creative ways to pay down these newly issued debts. American faces years of reckoning. Realities Facing American's StockTwo current stakeholders are most heavily footing the bill: AAL stock shareholders, and those 39,000 employees who will find themselves jobless come July.We should consider those people who are going to lose their livelihood, certainly. They are real people which too often gets glossed over in economic discussions. At the same time, it's important to consider shareholders who might have lost significant chunks of their retirement in this disaster. They are every bit as real. And none of this bodes well for AAL stock.American Airlines stock looks primed to see lean years. The company came into this pandemic with a weak balance sheet relative to its peers. American Airlines' cash burn and new debt issuance have only compounded the situation. So, despite management's rosy assurances that its plan should bear fruit come July, things look bleak.One obvious truth is that operating revenues will be earmarked for repayment of this current liquidity issuance. Investors in AAL stock are not going to be prioritized in that environment. To expect serious price appreciation or above average revenue disbursements from the stock doesn't make much sense. Final ThoughtsThe single compelling argument to buy American Airline's stock is the vague notion that it's so beleaguered that a rebound has to occur at some point. It'd be a long wait in my eyes. Investors looking to pick up still cheap airline stock should consider Southwest Airlines (NYSE:LUV) and Delta Air Lines (NYSE:DAL), who are better managed.At the time of this writing, Alex Sirois did not hold a position in any of the aforementioned stocks. More From InvestorPlace * Why Everyone Is Investing in 5G All WRONG * Top Stock Picker Reveals His Next 1,000% Winner * The 1 Stock All Retirees Must Own * Look What America's Richest Family Is Investing in Now The post American Airlines Is Again the Bearer of Bad News appeared first on InvestorPlace.

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