Author: therawinformant

China is one of the fastest-growing countries in the world, and as such, has proven to be a lucrative market to invest in for many years now. Chinese e-commerce companies like Alibaba Group (NYSE: BABA), JD.com Inc (NASDAQ: JD), Baidu Inc (NASDAQ: BIDU) and Tencent Holdings (OTCMKTS: TCEHY) have exploded in value over just the past 5 years. And with China reportedly leading the world in post-COVID-19 economic recovery, things look set to continue on this path for investors looking to China.

However, China has also increasingly provoked the ire of other countries in recent years, particularly the United States, but also Australia. We won’t go into the political sphere too much here, but I think it’s fairly safe to say that China’s handling of a number of issues, not least of which involving Hong Kong, have been controversial. As have the moves from China to impose export restrictions on a number of Australian industries, such as wine and barley.

All of this matters because we could be seeing a de-coupling of trading norms between China and both Australia and the US. The rhetoric stemming out of the US in 2020, in particular, has been alarming for anyone with investments in China or Chinese companies. It was only last year that the Trump administration was threatening to force Chinese companies like Alibaba and Tencent to de-list from US stock exchanges. And then there’s also the regulatory issues stemming from the oblique American Deposit Receipts (ADR) structures that most Chinese companies list through.

So is China still a safe place to invest?

Is China worth a look in 2020?

I think there are still sufficient reasons to consider investing in top Chinese companies today. This is still a massive growth market, and also one that is relatively uncorrelated to other share markets like the US and Australia. This can be great from a diversification standpoint. However, I do also acknowledge that some of the concerns listed above remain pertinent. We have a highly anticipated US presidential election coming up. If President Trump is reelected, we could see a resumption in the trade wars that dominated Sino-US trade relations prior to 2020. This could well lead to further deterioration between the two countries, which could end up at a point where Chinese shares are indeed ejected from the US capital markets.

Considering all of these factors, I still think investing in China or Chinese companies is a good idea. But I personally would only recommend a small allocation in a portfolio to Chinese companies, to account for the significant risks remaining. I would also stick to the ‘big names’ like Tencent and Alibaba, or otherwise with exchange-traded funds (ETFs) like the BetaShares Asia Technology Tigers ETF (ASX: ASIA) or the VanEck Vectors China New Economy ETF (ASX: CNEW).

More reading

• 2 top ETFs that would be good investments in any portfolio
• Here are 2 of the best ETFs you can buy today
• Where to invest $20,000 into ASX shares immediately
• iCandy (ASX:ICI) share price soaring on partnership with Alibaba
• Where to invest $10,000 into ASX shares right now

Sebastian Bowen owns shares of Baidu. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alibaba Group Holding Ltd. The Motley Fool Australia owns shares of and has recommended BetaShares Asia Technology Tigers ETF. 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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In afternoon trade on Wednesday the ResMed Inc. (ASX: RMD) share price is pushing higher with the market.

At the time of writing, the medical device company’s shares are up 1% to $23.83.

Despite this gain, the ResMed share price is down almost 19% from the 52-week high it reached in July.

Is this a buying opportunity?

I think the recent pullback in the ResMed share price is a buying opportunity for long term focused investors.

While its shares are still not cheap, even after this decline, I believe they offer a lot of value for investors that plan to make a buy and hold investment.

This is due to its focus on the lucrative sleep treatment market.

ResMed designs, develops, and manufactures masks to treat sleep disorders such as sleep apnoea. It also has a growing software business which provides solutions that support sufferers of sleep disorders.

Management estimates that there are currently 936 million people with sleep apnoea globally. There are also over 380 million people who suffer from chronic obstructive pulmonary disease (COPD) and more than 340 million people living with asthma.

Due to its industry-leading products and wide distribution network, I believe ResMed can win a growing slice of this market over the next decade.

Management certainly believes this to be the case. It is aiming to improve a total of 250 million lives by 2025. This compares to the 16 million lives it improved in FY 2020 by providing them with a device or complete mask system to help them breathe.

Another part of the company which I’m positive on is its software solutions business. At the end of FY 2020, ResMed’s digital health ecosystem had grown to over 12 million cloud connectable medical devices. It also had ~14 million patients enrolled in the AirView software solution.

This gives ResMed a significant amount of high quality data to perform sophisticated analytics and drive actionable insights.

Foolish Takeaway.

ResMed shares have been market beaters over the last 10 years and I believe the stage is set for them to repeat these heroics over the next decade. This could make the company one of the best buy and hold options on the ASX today.

More reading

• You could become very wealthy by investing $1,000 into these ASX shares
• Potential ASX winners from government’s $1.5bn manufacturing blueprint
• 2 must-buy ASX 200 shares I rate highly
• 3 of the best ASX healthcare shares to buy and hold
• 10 fantastic ASX shares to buy in October

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended ResMed Inc. 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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Share prices are edging higher today, with the S&P/ASX 200 Index (ASX: XJO) up 0.9% in afternoon trading.

This comes despite bearish forecasts that Australian shares would follow United States’ share markets lower after President Donald Trump torpedoed ongoing negotiations for the next big US stimulus package. These forecasts saw the ASX 200 fall 0.3% in the first 20 minutes of trading.

But the Morrison government’s own huge stimulatory budget, released last night, clearly trumps Trump’s tweet that US stimulus will have to wait until after ‘he wins’ the presidential election on 3 November.

The ASX shares not making budget related headlines

The budget Treasurer Josh Frydenberg unveiled last night is chock full of personal and business tax breaks, and numerous multi-billion-dollar spending programs targeting the manufacturing and energy sectors, among others.

The aim is to put money back into people’s and companies’ pockets and to create jobs.

Little wonder then that many analysts are citing potential share price gains in energy, financial, infrastructure and retail (particularly online retail) shares.

What you won’t see much of during these early budget analysis days is the long-term gains still offered by beaten down shares in the hospitality and travel space. That’s because no amount of fiscal stimulus is going to fully revitalise these industries until the coronavirus is truly contained.

For investors to reap the potential large gains on offer, they’ll need to be patient.

Air travel gutted

One area that’s been particularly hard hit is air travel.

The International Air Transport Association forecasts that global air traffic in 2020 will be 66% less than it was in 2019. Worse, the Association reported that domestic traffic in Australia was down 91.5% in August.

Ouch.

With those statistics in mind, the Sydney Airport Holdings Pty Ltd (ASX: SYD) share price has actually fared pretty well. After losing 48% in the February and March share market panic, the Sydney Airport share price has rebounded 31% to date.

That still leaves the share price down 32% from the 17 January peak.

And therein lies the longer-term opportunity.

For the Sydney Airport share price to return to its January levels, it will need to gain 47% from today’s price of $5.97 per share.

Now it’s not going to do that before domestic and international travel returns to pre-pandemic levels. In fact, the share price is down 0.3% today despite the broader market gains.

But if you believe, as I do, that COVID will be beaten within the next year and air traffic will return, or exceed, 2019 levels with 2 to 3 years, then Sydney Airport shares today look like an enticing bargain.

More reading

• Leading brokers name 3 ASX shares to buy today
• Sydney Airport (ASX:SYD) share price tipped to ascend 20% from here
• How to generate a passive income of $50,000 with ASX shares
• Beat the RBA rate cuts with these ASX dividend shares
• Advantage Australia — Why Morgan Stanley upgraded ASX shares to overweight

Motley Fool contributor Bernd Struben 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 One ASX share every patient investor should own appeared first on Motley Fool Australia.

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I think that some of the best ASX shares are within the S&P/ASX 200 Index (ASX: XJO), and they’re worth a spot in your portfolio.

ASX 200 blue chip shares are strong enough to be able to get through difficult periods like COVID-19. But many of the shares outside of the ASX 20 still have very good growth potential.

Here are two of the most promising ideas at the current prices in my opinion:

EML Payments Ltd (ASX: EML)

EML Payments provides payments in different ways. The ASX 200 share be used by clients for rewards, gifts, incentives and to disburse payouts. It has attractive diversification in how to reach the customer.

Before COVID-19 came along, physical gift cards were a big part of the company’s growth prospects. Obviously social distancing, store closures, consumer cautiousness and a rise of online spending has seen the demand for physical gift cards decline.

So I think this company could be a good way to invest on a shift back to normal life if COVID-19 can be eliminated in Australia or an effective vaccine is produced.

Total revenue increased by 25% to $121.6 million and group earnings before interest, tax, depreciation and amortisation (EBITDA) rose by 10% to $32.5 million.

But even if retail shopping doesn’t quite return, I still think EML Payments is a solid ASX 200 share option. The EML Payments share price is down 23% since 10 June 2020 – to me it’s a much better price. That’s despite management saying June and July trading was encouraging.

Also, the business offers things like online gift cards – this could see a significant boost coming up to Christmas, particularly in the northern hemisphere.

A2 Milk Company Ltd (ASX: A2M)

In my opinion, A2 Milk is one of the highest-quality ASX 200 shares. Selloff opportunities are a great time to buy shares of great businesses. Investing should be about multiple year timeframes, not just a single half-year or even 12-month period.

Long-term investors are being presented with an A2 Milk share price which is down 16.5% since 25 September 2020 and down 28% since 30 July 2020.

I understand why investors decided to sell. The local daigou sales channel is being heavily disrupted by COVID-19 impacts with the heavy lockdown in Victoria and the broader limit on international students and tourists caused by Australia’s border closures.

But A2 Milk can make up for this short-term disruption by continuing to build its China-based business and sell more products locally. The ASX 200 share is seeing success from its heavy investment in marketing in China. It’s gaining market share in the important mother and baby store market across China, with distribution increasing to more stores each month.

Things are also going well in the US. In its most recent trading update, the company said that its performance of the liquid milk business in America was strong. In FY20 it saw USA milk revenue growth of 91.2% with distribution expanded to 20,300 stores.

A2 Milk continues to target an earnings before interest, tax, depreciation and amortisation (EBITDA) margin of at least 30% for the longer-term which is an attractive mix of profitability and investing for growth.

Don’t forget, the company is actually still guiding for growth in FY21.  It’s expecting revenue to be between NZ$1.8 billion to NZ$1.9 billion. That would represent growth of between 4% to 10%, up from NZ$1.73 billion in FY20.

But it’s the growth beyond FY21 that makes me think it’s a long-term buy today, particularly with the North American growth. The A2 Milk share price is currently trading at 22x FY23’s estimated earnings.

More reading

• ASX 200 up 0.4%: Big four banks push higher, Westpac upgraded, ARB impresses
• Why a2 Milk, Afterpay, ARB, & SEEK shares are pushing higher today
• Could this ASX growth share be in for a turnaround in 2021?
• Why you may not need ASX REITs for dividends
• How the federal budget will impact on your ASX stock portfolio

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended A2 Milk and Emerchants 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.

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It certainly has been a disappointing year for the Telstra Corporation Ltd (ASX: TLS) share price.

Despite the telco giant hitting its guidance in FY 2020, its shares are down a sizeable 22% since the start of the year.

Here are three reasons I think the Telstra share price weakness is a buying opportunity.

Valuation.

At the current level, I estimate that Telstra’s shares are changing hands at approximately 20x FY 2021 earnings. I think this is good value for a blue chip company which has a strong market position and defensive qualities. Furthermore, it looks good value in comparison to some of its peers. For example, at present the TPG Telecom Ltd (ASX: TPG) share price is trading at 40x forward earnings and the Vocus Group Ltd (ASX: VOC) share price is commanding 23x forward earnings.

Attractive dividend yield.

The market appears incredibly divided on what dividend Telstra will pay in FY 2021. This is due to its guidance for the year ahead, which was softer than expected due to weaker roaming revenues. Based on its guidance, a dividend cut to somewhere in the region of 12 cents per share would be necessary given its current policy. However, it is worth noting that Telstra’s free cash flows are now greater than its accounting earnings. As a result, a shift to a free cash flow-based dividend policy would give it sufficient funds to maintain its 16 cents per share dividend. I’m optimistic that this shift will take place this year. If this happens, based on the current Telstra share price, it will provide investors with a fully franked 5.7% dividend yield.

5G internet.

Another reason I’m positive on Telstra is the arrival of 5G internet. Although it has been here for a little while, it hasn’t yet truly taken off. However, next week Apple will be holding its iPhone event and has hinted that its new phone will be 5G compatible. I believe this launch will be the catalyst for 5G to go mainstream in Australia, which should underpin improving mobile revenues in the coming years. Combined with the easing NBN headwind and its rampant cost cutting, I believe a return to earnings and dividend growth won’t be too far away for the company. This could make now an opportune time to make a patient investment.

More reading

• 2 quality ASX dividend shares to buy before the RBA meeting
• How to generate a passive income of $50,000 with ASX shares
• Meet the ASX 200 stock with a dividend yield that’ll hit ~14% in FY22
• The Telstra (ASX:TLS) share price is at a new 52-week low
• 2 high yield ASX dividend shares to solve your income needs

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra 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.

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Buying ASX dividend shares for income used to be a lot easier than it is today. With the coronavirus pandemic still ongoing, it’s been an especially challenging year for many ASX dividend shares to cough up their usual streams of income. Luckily, this hasn’t affected every dividend payer on the ASX, so here are 3 ASX dividend shares that I would happily buy today for income:

Coles Group Ltd (ASX: COL)

Coles is my first income pick. It’s a business we’d probably all be familiar with as Australia’s second-largest grocer and supermarket. I particularly like Coles’ defensive nature in this light – as we all saw back in March, companies that sell household essentials do just fine in all kinds of economic weather. That in turn lends great stability and reliability to Coles’ dividend in my view. Although it’s not the largest yield you can get on the ASX today, Coles’ fully franked, trailing yield of 3.26% on current prices isn’t a bad deal. Especially if you consider that interest rates are at virtually zero.

Fortescue Metals Group Limited (ASX: FMG)

Fortescue is another dividend payer that I think is worthy of consideration today. Iron ore miners like Fortescue (in contrast to Coles) are not normally the steadiest dividend payers due to the cyclicality of the iron price over time. Even so, I think Fortescue runs so tight a ship that it is able to pay out generous dividends under most pricing scenarios.

And since iron ore has been relatively expensive in 2020 so far (holding well over US$100 a tonne for most of the year), Fortescue shares aren’t a bad option today, even at their relatively high price. On current pricing, Fortescue is offering up a whopping trailing dividend yield of 10.51%, which also comes fully franked. Even if Fortescue cuts this dividend in half next year, it’s still a worthwhile income stock. As such, I think this company is a buy today for income investors.

Vanguard Australian Shares High Yield ETF (ASX: VHY)

Our final dividend share today is actually an exchange-traded fund (ETF). VHY aims to hold a basket of the ASX’s best and most robust dividend-paying shares. You’ll find BHP Group Ltd (ASX: BHP), Wesfarmers Ltd (ASX: WES) and the big four banks in its top holdings, as well as Coles and Fortescue incidentally. What’s great about an ETF like VHY is that it periodically rebalances its holdings to reflect the dividend environment of the time.

As such, you can easily buy this ETF and ‘put it in the bottom drawer’, knowing that it will automatically weed out dividend underperformers. VHY offers a trailing dividend yield of 5% on current prices. Unlike most ASX shares, it also pays out its distributions quarterly – an attractive quality for many investors.

More reading

• Top brokers name 3 ASX shares to buy today
• Why you may not need ASX REITs for dividends
• Buy Fortescue (ASX:FMG) and this ASX dividend share for income
• My 3 favourite ASX dividend shares to buy this year
• Why the Coles Group (ASX:COL) share price just got upgraded to “buy”

Motley Fool contributor Sebastian Bowen owns shares of Vanguard Australian Shares High Yield Etf. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Wesfarmers 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.

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With interest rates at record lows and potentially still going lower in November, I continue to believe that investors would be better off putting any excess funds into the share market rather than leaving them to gather only paltry interest in a savings account.

But where should you invest these funds? Here are two unstoppable ASX shares I would invest $5,000 into right now:

Appen Ltd (ASX: APX)

The first option for investors to consider investing $5,000 into is Appen. I’m a big fan of the company because of its position as the global leader in the development of high-quality, human annotated datasets for machine learning and artificial intelligence (AI). Appen has achieved this thanks to its global crowd of more than 1 million skilled contractors, an expertise in more than 180 languages, and the industry’s most advanced AI-assisted data annotation platform.

With such a strong pedigree, it is no surprise that Appen provides solutions to the many of the global leaders in technology, automotive, financial services, retail, manufacturing, and government. The good news is that spending on machine learning and AI is expected to increase materially over the next decade, putting Appen in a perfect position to continue growing its earnings at a strong rate for many years to come.

Pushpay Holdings Group Ltd (ASX: PPH)

Another option to consider for that $5,000 investment is Pushpay. It is a donor management and community engagement platform provider with a focus on the church market. Pushpay has been a very strong performer in recent years and has carved out a big slice of the lucrative U.S. market. This has underpinned very strong revenue growth and, thanks to the benefits of scale, even stronger operating earnings growth.

Pleasingly, Pushpay appears well-positioned to gain further market share in the coming years thanks to the quality of its platform, the shift to a cashless society, and the digitisation of the church. Another positive is last year’s US$87.5 million acquisition of church management system provider Church Community Builder. This acquisition has strengthened its offering significantly and is expected to support further margin expansion. Overall, I believe Pushpay can be a market-beater over the 2020s, making it a great place to invest today.

More reading

• 3 ASX shares to buy in a US election selloff
• The Appen (ASX:APX) share price is up 55% in 2020: Too late to buy?
• Why this ASX tech share could be better than BNPL stocks 
• You could become very wealthy by investing $1,000 into these ASX shares
• 4 stellar ASX growth shares to buy right now

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 PUSHPAY FPO NZX. The Motley Fool Australia owns shares of Appen Ltd. The Motley Fool Australia has recommended PUSHPAY FPO NZX. 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 Weebit Nano Ltd (ASX: WBT) share price has rocketed following the release of a company update. The share price surged 17% to 88 cents this morning before falling back to 84 cents at the time of writing.

Let’s take a look at the company does and see why the Weebit Nano share price is soaring higher today.

What does Weebit Nano do?

Weebit Nano develops next generation computer memory technology. The Israeli company addresses the growing need for data storage through its resistive random-access-memory (ReRAM) technology. Weebit states that ReRAM is more than 1000 faster and uses 1000 times less power than traditional storage options like flash.

Milestone achievement

Weebit announced it had successfully completed the technology stabilisation process for its ReRAM product. The final stabilisation stage was completed with Leti, a research and development institute that specialises in nanotechnologies.

The stabilisation process saw reduced cell-to-cell and die-to-die non-uniformity, thus increasing the level of functional cells and batch-to-batch repeatability. Weebit noted the improvements to its silicon oxide ReRAM technology as an important milestone on the path to commercialisation.

The company advised the next phase will see the transfer of its technology to a semiconductor fabrication plant. In addition, Weebit is working towards a module IP design for the embedded market, standalone memory for mass storage, and production in a foundry.

What did the CEO say?

Chief executive officer Coby Hanoch validated the hard work done by the company. He said:

The successful completion of the stabilisation process follows four years of extensive research and development by the joint Weebit and Leti engineering teams, which has created a unique and highly competitive ReRAM technology.

Our close collaboration with Leti will continue, as we constantly strive to improve and further optimise the technical parameters of our silicon oxide ReRAM.

Hanock went on to say:

In parallel to completing the stabilisation process which has reinforced the capabilities of our technology, we are moving closer to commercialisation, engaging in discussions with a production partner and working towards transferring our IP and achieving technology qualification in the partner’s fab.

About the Weebit share price

Weebit shares were almost static before strongly performing since late August. A major catalyst for this could be from the investor hype in the sector. Brainchip Holdings Ltd (ASX: BRN) and 4DS Memory Ltd (ASX: 4DS) have both seen their share price rise to astronomical levels.

The Weebit share price was trading around 30 cents region, until it reached a 52-week high of $1.04 in September. Sitting 16% below, the Weebit share price is in reach of creating new multi-year high.

More reading

• Which ASX share may benefit from the jobs-led recovery Budget?
• “Incredible surge” in Pointsbet (ASX:PBH) share price appears justified according to one of the country’s best performing funds
• Top brokers name 3 ASX shares to buy today
• 3 ASX shares to buy in a US election selloff
• ASX 200 up 0.4%: Big four banks push higher, Westpac upgraded, ARB impresses

Motley Fool contributor Aaron Teboneras 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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Partisan politics continue to hamstring new stimulus measures in the United States. But here in Australia – with the real (inflation adjusted) rate of interest the government pays to borrow essentially zero – it looks likely that Labor will back the Federal Government’s massive new Budget proposal.

The Budget Treasurer Josh Frydenberg detailed last night will unleash record stimulus into the economy, with a focus on job creation. That spells good news for people currently unemployed as well as for Aussie workers on all levels of income. With stage 2 tax cuts brought forward and backdated to July, it means workers will be handing over less of their hard-earned money to the Australian Tax Office, leaving them more to spend and invest.

The Budget is even better news for most Aussie companies, as the Government leans on the business sector to help drive job growth and an economic recovery. A range of multi-billion-dollar business tax cuts and new spending packages should offer a welcome tailwind to many ASX share prices.

Here’s what Morgan Stanley has to say about it in the Australian Financial Review:

For financial markets, the highlight of the budget was the strong support given to business. Immediate capital write offs (in full) for businesses with less than $5 billion turnover on depreciable goods will remain in place until June 2022 (cost $27 billion) and be used in combination with tax loss carry-back.

Manufacturing, R&D incentives and energy also feature in business-friendly initiatives. This combined with previously announced deregulation of lending guidelines should allow for animal spirits to rise, and help the clear focus of a business-led recovery.

We’ll get back to those rising animal spirits, and one ASX share I believe investors should consider adding to their portfolio today, in a tick.

But first…

Trump’s trademark backflip

Like it or not, in today’s world politics has a greater influence on share markets than ever before.

To illustrate the point, the following two headlines come from the Sydney Morning Herald.

This one was published yesterday: ‘ASX set for more gains as Wall Street bounces higher on Trump, stimulus’.

And this headline was published this morning: ‘Wall Street dives as Trump orders halt to stimulus talks until after election’.

If you’re prone to motion sickness, you may want to reach for the Dramamine. With the last 3 years as a guide, President Donald Trump’s policy backflips have a penchant for repeating themselves.

Just this weekend, he urged Republicans and Democrats to bridge their differences and pass the next round of US stimulus spending, tweeting, “WORK TOGETHER AND GET IT DONE.”

Yesterday, he had a change of mind, tweeting, “I have instructed my representatives to stop negotiating until after the election when, immediately after I win, we will pass a major Stimulus Bill that focuses on hardworking Americans and Small Business.”

The Democrats are still pushing for a US$2.2 trillion (AU$3.1 trillion) spending package while the Republicans have drawn the line at US$1.6 trillion.

Now if you’re day-trading shares (which we don’t recommend), there are a lot of ways to make or lose money trying to guess when the US government finally opts to ‘work together and get it done’.

But if you’re a long-term investor you can simply keep your eyes on the calming horizon. Because whether it happens this week, next month or even further down the track, I’m happy to go out on a very sturdy limb here and say that the next round of massive US stimulus spending is inevitable.

And share markets will rally.

Back in the lucky country

While Australians have escaped the widespread coronavirus infections and high death tolls witnessed across much of the world, the measures taken to contain the virus have put many out of work.

The Government now expects unemployment to hit a high of 8% towards the end of 2020. That’s the highest it’s been since 1998 following the Asian financial crisis.

But last night Frydenberg made it clear that creating jobs was the Government’s top priority and core focus of the new Budget. He said:

There is great uncertainty, unprecedented uncertainty in the economic environment not just here in Australia but globally right now. What we have sought to do is create a series of incentives and make a series of investments that are designed to create more jobs. There is a record amount of spending but also important supply side structural reforms…

There is no economic recovery without a job’s recovery. There is no budget recovery without a job’s recovery. This budget is all about jobs.

Which brings us to one ASX share that should continue to benefit from the new jobs push, SEEK Limited (ASX: SEK).

The online job advertising giant, with a market cap of $7.8 billion, reports that job ads on its platform in the fortnight through to 27 September reached 80% of pre-COVID levels.

Victoria still lags with only 56% of the jobs listings the state had before the virus struck. But a number of states now have more job postings on SEEK than they did in February.

SEEK ANZ managing director Kendra Banks said:

South Australia and Western Australia have joined Tasmania and Northern Territory as having a higher number of jobs listed on seek.com.au than in February, surpassing pre-COVID levels…

As our recent data has shown when restrictions ease and economies stabilise this leads to an improvement in job ads.

As job ads increase, so too does SEEK’s core revenue base.

The SEEK share price fell more than 50% from 29 January’s record high through to the 23 March trough. Since that low it’s rebounded 86%. That leaves the share price down 7% from its all-time highs.

With the Government driving a job’s led recovery, and new listings already exceeding pre-pandemic levels in some states, I expect the SEEK share price will soon be back in record high territory.

More reading

• Why a2 Milk, Afterpay, ARB, & SEEK shares are pushing higher today
• 2 blue chip ASX shares to buy and hold until 2030
• 3 outstanding blue chip ASX shares to buy in October
• Where to invest $10,000 into ASX shares immediately
• ASX 200 rises 1%, SEEK (ASX:SEK) jumps 9%

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has recommended SEEK 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.

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In late August, the Pointsbet Holdings Ltd (ASX: PBH) share price soared 87% higher in a single trading day after the online betting company signed a transformational marketing deal with NBC Universal Media (NBC), making it the Official Sports Betting Partner of NBC Sports in the US.

The partnership will deliver the largest sports audience of any US media company, with 184 million viewers across 120 million households. NBC’s portfolio of sports rights includes NFL, PGA Golf, NHL, Nascar and Premier League football.

The US sports betting market is still in its infancy, with some estimates projecting it will be a $US30 billion addressable market at maturity.

As part of the partnership with NBC, Pointsbet has committed to a marketing spend of $US393 million to be allocated progressively in increasing amounts over the five-year media partnership.

Despite the massive jump in the Pointsbet share price, the Saville Capital Emerging Companies Fund remains invested in the company.

Writing in the August 2020 monthly update, fund manager Jonathan Collett said he sees the deal as taking Pointsbet’s position in the US sports betting market from a potential niche player to a likely key long-term player. As such, he said the “incredible surge” in Pointsbet shares in response to the announcement “would appear to be justified.”

The Saville Capital Emerging Companies Funds has an outstanding track record, generating returns of 44.9% per annum since inception in February 2017. The fund runs a very concentrated portfolio, with around 90% of its capital invested in 17 stocks. Other portfolio holdings include Redbubble Ltd (ASX: RBL) shares and Class Ltd (ASX: CL1) shares.

More reading

• Why Flight Centre, OneVue, Paradigm, & PointsBet shares are charging higher
• PointsBet (ASX:PBH) share price in focus after U.S. update
• Is it too late to buy the PointsBet (ASX:PBH) share price? 
• PointsBet (ASX:PBH) share price higher on U.S. expansion news
• Should you buy the PointsBet (ASX:PBH) share price after its capital raising? 

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Pointsbet Holdings Ltd. The Motley Fool Australia owns shares of Class Limited. The Motley Fool Australia has recommended Pointsbet Holdings Ltd. 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 “Incredible surge” in Pointsbet (ASX:PBH) share price appears justified according to one of the country’s best performing funds appeared first on Motley Fool Australia.

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