Author: therawinformant

The Qantas Airways Limited (ASX: QAN) share price is up 22% over the last month. And this during a month where Victoria remains in lockdown, most states maintain strict border controls, and international travel is all but off the agenda.

As you’d expect, the Qantas share price was savaged by the measures put in place to control COVID-19, alongside the panic selling that gripped the wider market earlier this year.

From 20 February through to its low on 19 March, Qantas’ share price dropped a gut-wrenching 68%. Long-term investors who kept the faith – or lucky punters who bought shares on 19 March – have enjoyed an 85% share price leap since that low.

Still, Qantas’ share price remains depressed, down 45% year-to-date. For comparison the S&P/ASX 200 Index (ASX: XJO) is down 9%.

What does Qantas do?

Qantas was founded in Queensland in 1920, making it the world’s second oldest airline. Today the company is Australia’s largest airline for both regional, domestic and international travel. Qantas launched the low-cost carrier Jetstar in Australia in 2004 in answer to Virgin Australia’s low-cost offerings. Jetstar-branded airlines now operate across Asia Pacific.

The company’s subsidiary businesses include Qantas Freight Enterprises, Qantas Frequent Flyer and Qantas Loyalty. Qantas shares began trading on the ASX in 1999.

Why is the Qantas share price up 22% over the past month?

The high-flying Qantas share price over the past month has nothing to do with a return to business as normal. Rather it has a lot more to do with forward-looking investors eyeing that eventual return to normal, alongside Qantas’ own cost-cutting strategies.

On 25 August, in the company’s latest attempt to slash its budget so it can emerge from hibernation in viable shape, Qantas announced it planned to outsource its ground staff. The plan would eliminate more than 2,400 jobs, which Qantas estimates would save $100 million in operating costs annually. The impacted employees have until 9 October to put together their own bid if they wish to keep their positions.

At the moment, Qantas has already stood down 20,000 of its staff due to the impacts of COVID-19. At some stage, hopefully soon, most of those staff will return to their posts, joined by new colleagues as Australia’s biggest airline returns to the skies.

Australia is a vast and geographically isolated nation, after all. No one is going to drive from Perth to Sydney for business and most rarely for pleasure. And business and tourist travel in and out of Australia will resume once the virus is controlled or eradicated.

The Qantas share price closed up 0.3% today.

More reading

• How to build a recession-beating ASX share portfolio
• Why I think the AMP share price is finally looking good enough to buy
• ASX 200 rises 0.8%, investors bet on SkyCity
• New to investing? 3 top ASX shares to kickstart your portfolio
• Why I would buy and hold Altium and these top ASX 200 shares

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.

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The AMP Limited (ASX: AMP) share price seems like one of the highest risk stocks to buy on the S&P/ASX 200 Index (Index:^AXJO). But the scandal-plagued company could provide a good payoff for the brave.

I initially refused to touch this ASX stock as it jumped from one crisis to another, but decided last week it was time to after chairman David Murray resigned.

AMP has been a real dog with the stock trading close to $6 in 2016 to around $1.66 today. The bad taste from the Banking Royal Commission that claimed Murray’s predecessor Catherine Brenner had barely left our mouths when the Boe Pahari controversy erupted.

AMP will become the quintessential case study on how NOT to manage a crisis.

Deal breaker

If I have one firm rule when it comes to investing, it’s never to touch stocks with governance or accounting issues. History taught me that I always get burnt by seemingly “cheap” stocks being sold on either of these interconnected blemishes.

I am happy to stomach other business risks, such as technology or market risks, as I can made an educated assessment on such threats. But there’s a thick cloud of uncertainty when it comes to governance that will always blind investors.

As far as I am concerned, you are rolling the dice if you buy such stocks. The same can be said for accounting issues as I see the two as often being interlinked.

When to start looking at ASX dogs again

The only time I become interested again is after a big cleanout, like what just happened at AMP. Real change can only happen under new leadership.

This isn’t reason enough to buy the AMP share price, but it at least means I am not wasting my time working out its fair valuation.

And AMP share price looks cheap given the amount of bad news priced into the stock and considering the strategic value of its brand.

Strategic value

Remember that this was once an attractive takeover target, just ask National Australia Bank Ltd. (ASX: NAB). Things have radically changed since 2003 and AMP is a much easier target now.

This is why it didn’t surprise me that its newest chairperson Debra Hazelton confirmed AMP was approached by several parties.

The question is how much AMP might be worth under a break-up.

How much is a broken up AMP worth?

The analysts at JPMorgan tries to answer this question by considering two probable scenarios, according to the Australian Financial Review.

In the first instance, the broker assumed that AMP’s wealth management business (the biggest prize bidders are after) is sold on the same 16 times post-tax earnings multiple that IOOF Holdings Limited (ASX: IFL) is paying NAB for MLC.

On that basis, AMP’s shares are worth $1.94 a share.

Less optimistic scenario still delivers good returns

In the second scenario, JPMorgan assumed AMP’s wealth division would be valued using MLC’s funds under management margin as a proxy.

Under this assumption, AMP’s valuation will come in at $1.81 a share. This implies a 15% upside to the stock but doesn’t include the 10 cents a share special dividend.

Don’t forget your special dividend

This dividend represents one part of a capital return to shareholders following the sale of AMP Life. Management is also undertaking an up to $200 million on-market share buyback over the next 12 months.

AMP is still a higher risk proposition, but I think the risk-reward has not looked this attractive in the last three years, if not longer.

More reading

• Why the Qantas share price has lifted 22% in the past month
• ASX 200 rises 0.8%, investors bet on SkyCity
• New to investing? 3 top ASX shares to kickstart your portfolio
• Why I would buy and hold Altium and these top ASX 200 shares
• What exactly is the ASX 200 telling us today about 2020?

Motley Fool contributor Brendon Lau owns shares of AMP Limited and National Australia Bank Limited. Connect with me on Twitter @brenlau.

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 S&P/ASX 200 Index (ASX: XJO) went up by 0.81% today to 6,113 points.

Investors bet on SKYCITY Entertainment Group Limited (ASX: SKC)

SkyCity released its FY20 result today for the 12 months ending 30 June 2020.

Casino operators like SkyCity announce both reported numbers and normalised numbers.

SkyCity said that reported revenue rose 36.8% to $1.125 billion. Reported earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 16.9% to $348.3 million. Reported net profit after tax (NPAT) rose by 62.8% to $235.4 million and reported earnings per share (EPS) increased by 65.5% to 35.4 cents.

Normalised revenue (including gaming GST) fell by 24.3% to $779.5 million. Normalised EBITDA declined 37.7% to $200.7 million and normalised NPAT dropped by 59.7% to $66.3 million. The normalised EPS fell by 59% to 10 cents.

The ASX 200 casino operator didn’t declare a final dividend for FY20.

SkyCity said that the normalised EBITDA of $200.7 million and NPAT of $66.3 million was at the top end of its guidance provided at the time of its equity raising in June 2020. Its reported results were up significantly because of the NZICC fire accounting and the gain from the Auckland car park concession sale. However, this was offset by a $150 million impairment of the SkyCity Adelaide casino licence.

Looking ahead to FY21, its New Zealand businesses recovered more quickly than anticipated for the period from 1 June 2020 to 11 August 2020, though the Auckland facility was closed from 12 August to 30 August 2020. Hamilton and Queenstown continued to trade ahead of expectations.

The business said that the EBITDA and cashflow was materially ahead of expectations. SkyCity Adelaide is EBITDA and cashflow positive since re-opening and the NZ online casino business has been EBITDA positive for every month since April 2020.

The Skycity share price rose by 8% and it was the best performer within the ASX 200.  

WiseTech Global Ltd (ASX: WTC) founder share selldown

It was revealed today that WiseTech founder and CEO Mr Richard White as well as co-founder and executive director Ms Maree Isaacs have sold shares.

Mr White said that the shares were sold as part of a trading program which will continue until 31 December 2020, subject to no material, non-public information arising during this period. The trading program has limits on daily trade volumes so it doesn’t impact the market.

WiseTech told investors that Mr White intends to sell down a small portion of his shares to facilitate liquidity of WiseTech’s shares and enable diversification of assets.

After the completion of the trading program Mr White expects to have voting control of more than 45% of issued capital. In the last share sale he sold approximately 0.83% of WiseTech’s total shares. The other sale since listing was in December 2017 when he sold less than 2% of the ASX 200 company’s shares.

Mr White assured investors he remains committed to WiseTech. He intends to remain a substantial, long-term shareholder. Directors and employees of WiseTech still own approximately 59% of the business.

The ASX 200 business included some words from Mr White in the ASX announcement. One section said: “I am excited about WiseTech’s future global growth opportunities and continue to be as committed and driven as ever, on achieving our global growth ambitions. We are gaining momentum in driving revenue growth, with four new global customer signed up in the first seven months of calendar 2020 and a strong pipeline of further global deals.”

The WiseTech share price rose 1.1% today, despite initially being down.

Other notable share price movements

The worst performer in the ASX 200 today was the Spark Infrastructure Group (ASX: SKI) share price which dropped 6%.

One business to make the news today was Bubs Australia Ltd (ASX: BUB). The infant formula business announced its capital raising was being done at a price of $0.80 per share. Its share price dropped almost 5% in reaction.

More reading

• Why the Qantas share price has lifted 22% in the past month
• Why I think the AMP share price is finally looking good enough to buy
• New to investing? 3 top ASX shares to kickstart your portfolio
• Why I would buy and hold Altium and these top ASX 200 shares
• What exactly is the ASX 200 telling us today about 2020?

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of BUBS AUST FPO and WiseTech Global. The Motley Fool Australia has recommended BUBS AUST FPO and Sky City Entertainment Group 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.

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The Clean TeQ Holdings Limited (ASX: CLQ) share price jumped 8.33% to close at 20 cents today. This follows a company announcement that it will start platinum zone drilling in the coming weeks.

What did Clean TeQ announce?

Clean TeQ reported that a new high-grade platinum zone had been outlined. It’s part of an existing 1 million ounce platinum resource at the company’s Sunrise project in NSW. The company said significant historic downhole intersections had yet to be tested with drilling to start in the coming weeks.

Significant downhole intersections from earlier drilling campaigns near the surface include 12 metres at 8 grams per tonne platinum, .55% nickel .08% cobalt and 23 parts per million scandium, along with 13 metres at 7.1 grams per tonne platinum and 6 metres at 15.1 grams per tonne platinum, .95% nickel, .16% cobalt and 170 parts per million scandium.

The company said despite extensive drilling in previous decades, not many holes had been drilled beneath the sunrise laterite. However, significant historic intersections at a greater depth have included 4 metres at 7.4 grams per tonne platinum,  .13% nickel and .01% cobalt along with 1 metre at 6.5 grams per tonne platinum, .15% nickel and .01% cobalt and 1 metre at 4.2 grams per tonne platinum, .15% nickel and .01% cobalt.

Clean TeQ said that given the high grades of platinum near the surface and historic intercepts beneath the laterite, work had started on testing the structural geology of the zone and to establish a platinum resource. The company said the platinum resource would either integrate with the development of the Sunrise nickel-cobalt-scandium mine or be developed as a stand-alone operation.

Clean TeQ co-chair Robert Friedland said: 

As I’ve said for years, despite being an incredibly valuable base metals resource, Sunrise is one of the best walk-up precious metal drill targets on the planet. It is astounding what little work has been done to test geological interpretations under the blanket of this laterite, despite very encouraging results from historic drilling.

About the Clean TeQ share price

Clean TeQ is a minerals development company that also holds patented technology which can be used for water purification and resource extraction. It has been listed on the ASX since 2007.

In August, Clean TeQ announced it had completed construction of a water processing plant for mine waste water at the Fosterville gold mine in Victoria.

Also in August, Clean TeQ provided an update on the electric car market it plans to supply with metals, saying growth in that market had continued. It also said it would release a project execution plan for its Sunrise project at the end of September 2020.

The Clean TeQ share price is up 100% from its 52-week low of 10 cents. However, it is down 10% since the beginning of the year. The Clean TeQ share price is down 42.86% since this time last year

More reading

• 2 solid ASX dividend shares for income in 2020
• New to investing? 3 top ASX shares to kickstart your portfolio
• The Mesoblast share price rocketed 40% higher in August: Is it too late to invest?
• Myer’s share price is rocketing up. Here’s why.
• Why I would buy and hold Altium and these top ASX 200 shares

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Dividends… It’s been a rough year. ASX dividend shares have seen one of the biggest decouplings in ASX share market history in 2020 so far. If you told a dividend investor back in 2018 that 2020 would see ASX bank dividends practically dry up, Transurban Group (ASX: TCL)  and Sydney Airport Holdings Pty Ltd (ASX: SYD) slash their payouts and Ramsay Health Care Limited (ASX: RHC) break its 20-year streak of dividend raises, you probably would have been laughed out of the room.

Yet that is the reality all dividend income investors now face in this strange and turbulent year.

So here are 2 ASX dividend shares that I think ASX investors can comfortably turn to instead.

ASX dividend share 1) Rural Funds Group (ASX: RFF)

Rural Funds Group is an agriculturally-focused real estate investment trust (REIT). It owns productive land that is used to grow all manner of crops, from macadamias to wine grapes and beef cattle. Rural Funds rents out this land to various clients and in turn, receives rental income.

These rental agreements are useful to Rural Funds, as most include automatic inflation-linked annual increases. That’s precisely why I like this company an income investment. We all need to eat and a coronavirus pandemic isn’t getting in the way of that fact. Thus, in a year where ASX dividend shares have been slashing their payouts, Rural Funds has been able to grow its distribution by 4%. On current prices, this gives Rural Funds an unfranked trailing yield of 3.77%. Not bad in my view.

2) Coles Group Ltd (ASX: COL)

Coles is another top income share to consider today. Its defensive supermarkets and bottleshop businesses have proved especially useful to investors in 2020 as panic buying earlier in the year helped insulate Coles from rising coronavirus-related costs.

Similarly to Rural Funds, Coles is inherently useful as a dividend share because we all need to buy food and other household essentials regardless of what is happening in the economy. And it’s highly likely that a large chunk of Australians will continue to use Coles to that end. Speaking of dividends, Coles was able to increase its dividend by a hefty 14.6% in its FY2020 earnings report that was released last month. That gives Coles shares a trailing yield of 3.24%, or 4.63% grossed-up with the company’s full franking credits.

Foolish takeaway

I think both Coles and Rural Funds are top ASX shares to consider in 2020 for ASX dividend income. They don’t offer any kind of eye-dropping yields. But then again, many of the company’s that used to offer 5% or 6% dividends are offering nothing today. I think in the search for income in 2020, beggars can’t exactly be choosers!

More reading

• New to investing? 3 top ASX shares to kickstart your portfolio
• Where I would invest my BHP dividends in September
• 2 quality ASX dividend shares for income investors to buy today
• 2 high quality and growing ASX dividend shares
• Top ASX Stock Picks for September 2020

Motley Fool contributor Sebastian Bowen owns shares of Ramsay Health Care Limited. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Transurban Group. The Motley Fool Australia has recommended Ramsay Health Care 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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Choosing ASX shares to buy can be a daunting task for new investors looking to kickstart their portfolio. The ASX has a huge selection of companies out there, and with so many choices available, one might not know where to start.

Below, I have selected my best 3 ASX shares to buy for any new investor who is seeking a diversified portfolio of safe but growing companies that also offer reliable dividends.

Washington H. Soul Pattinson and Co. Limited (ASX: SOL)

Listed for more than 107 years, Soul Patts (as it is commonly referred to) is the second oldest company on the ASX. The Australian investment house has a portfolio of ASX shares in industries such pharmaceuticals, mining, building materials, property investment, telecommunications, financial services and other equity investments.

Major share holdings include TPG Telecom Limited (ASX: TPG), Brickworks Limited (ASX: BKW), and New Hope Corporation Limited (ASX: NHC).

Soul Patts’ broad asset diversification has made it resilient to economic crises. The company has consistently paid dividends to shareholders for the last 40 years and has increased its dividend payout policy since 2000.

The Soul Patts share price is trading for (at the time of writing) $21.35, and is 8.5% below its 52-week high. I think that Soul Patts is an excellent choice for first-time investors as it has a solid track record of outperforming the S&P/ASX 200 Index (ASX: XJO).

Appen Ltd (ASX: APX)

Appen is a global leader focused on collecting and labelling data for machine learning and artificial intelligence (AI) systems. In layman’s terms, the company breaks down language barriers using its annotation platform for developing client’s products and services. This includes digital assistants and chat boxes, recommenders on search engines, and fraud protection systems.

Some of Appen’s customers include Apple, Amazon, Google, Microsoft, as well as government agencies.

Demand for AI is expected to grow strongly over the next few years, with forecasts of $97.9 billion by 2023. The addressable market is potentially enormous for Appen’s future revenues.

Last week, Appen released its half-year results and although it delivered solid earnings, shareholders were not satisfied. The Appen share price has since fallen from an all-time high of $43.66 to (at the time of writing) $34.90. I believe this 20% drop has created a buying opportunity for new investors who want exposure to a quality growth share.

Coles Group Ltd (ASX: COL)

Last but not least in my pick of the best ASX shares is Coles. The leading Australian retailer has over 2,500 retail outlets nationally and services over 21 million customers each week.

The supermarket giant has performed well since its demerger from Wesfarmers Ltd (ASX: WES) in late 2018. The Coles share price has been on an upward trend, debuting at $12.49 to (at the time of writing) now sit at $17.78, up 42%.

A part of Coles’ recent share price rise was attributed to the pantry stocking during COVID-19. However, the company boasts defensive qualities through its strong market position – no matter how bad the economic climate is, people still need to buy food.

Last month, Coles released its FY20 results, reporting bumper profits and increasing its final dividend to by 14.6% to 27.5 cents. In the company’s first 6 weeks of FY21, supermarket sales were comparable with the levels achieved in the second half.

I think Coles is good company to have in your portfolio. Its large store network and online platforms provide accessibility for all consumers, and thus support stability for strong revenues going forward. In light of this, I would recommend Coles to ‘mum and dad’ investors.

More reading

• 2 solid ASX dividend shares for income in 2020
• Why I would buy and hold Altium and these top ASX 200 shares
• What exactly is the ASX 200 telling us today about 2020?
• The Appen share price is down 20% in a week: Is it time to buy?
• How household savings could boost these ASX share prices

Motley Fool contributor Aaron Teboneras owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of Appen Ltd and COLESGROUP DEF SET. 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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One of the best performers on the S&P/ASX 200 Index (ASX: XJO) in August was the Mesoblast limited (ASX: MSB) share price.

The biotechnology company’s shares recorded a stunning 40.5% gain during the month.

Why did the Mesoblast share price rocket 40% higher in August?

Investors were scrambling to buy the biotechnology company’s shares in August due to positive developments relating to its remestemcel-L product candidate.

Remestemcel-L, also known as RYONCIL, is being developed as a treatment for paediatric steroid-resistance acute graft versus host disease (paediatric SR-aGvHD).

SR-aGvHD is an area of extreme need, particularly in vulnerable children under 12 years old where there is no approved therapy. It occurs in approximately 50% of patients who receive an allogeneic bone marrow transplant (BMT) and has a very high mortality rate.

Remestemcel-L is an investigational therapy comprising culture-expanded mesenchymal stem cells derived from the bone marrow of an unrelated donor.

It is administered to patients in a series of intravenous infusions and is believed to have immunomodulatory properties to counteract the inflammatory processes that are implicated in SR-aGvHD. This is by down-regulating the production of pro-inflammatory cytokines, increasing production of anti-inflammatory cytokines, and enabling recruitment of naturally occurring anti-inflammatory cells to involved tissues.

What was the positive development?

In August the company had its meeting with the Oncologic Drugs Advisory Committee (ODAC) of the U.S. FDA to discuss remestemcel-L as a potential treatment for paediatric SR-aGvHD.

The good news was that after some initial doubts, the ODAC was supportive of remestemcel-L and gave it the thumbs up.

While this doesn’t necessarily guarantee that the U.S. FDA will approve it on 30 September, its opinions have a big sway on product approvals for cancer drugs. In light of this, the odds are certainly in Mesoblast’s favour later this month.

Should you invest?

I think Mesoblast is an exciting company and well worth keeping a close eye on.

However, due to its current valuation, I would class it as a hold and would sooner be a buyer of CSL Limited (ASX: CSL) shares.

I think they are trading at a more attractive level after a recent pullback.

More reading

• Mesoblast share price flat on Australian phase 3 COVID-19 trial news
• These were the best performing ASX 200 shares in August
• Up 38% in August, is the Mesoblast share price a buy?
• Bulls versus bears – two experts face off on where share prices are going
• Mesoblast share price on the rise after delivering promising FY20 results

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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The Myer Holdings Ltd (ASX: MYR) share price is up 14.89% in afternoon trading after announcing a partnership with Amazon Australia. That puts Myer’s share price up 165% from its March 20 low.

Today’s share price moves will come as unwelcome news to the host of investors betting against Myer. Myer is the second most shorted share on the ASX, with 11.3% of shares held by short-sellers.

The huge rebound since March hasn’t been enough to see Myer’s share price recover from the thrashing it took during the wider COVID-19 market rout though, which saw shares crash 81% from 15 January through 20 March.

Year-to-date shares are down 46%.

What does Myer Holdings do?

Myer operates 60 department stores across Australia. The company is also expanding its online retail footprint via myer.com.au, which now represents its largest store by sales.  Myer’s merchandise includes clothing, cosmetics, household and electrical goods, toys and general merchandise. Outside of its Australian operations, the company has sourcing offices in China and Hong Kong.

Myer is part of the S&P/ASX 300 Index (ASX: XKO).

What are Myer and Amazon going to collaborate on?

This morning Myer announced the launch of Amazon Hub, starting on 9 September. The Amazon parcel pickup points will be located at Myer’s Click & Collect counters in 21 Myer stores.

The partnership gives Amazon customers the option to have their parcels delivered to a secure Myer Hub, where they’ll also have access to Myer’s in store retail items and customer service team.

Addressing the new partnership, Myer’s chief customer officer Geoff Ikin said:

It’s solution led thinking for time poor customers, who can access Myer’s great range of services and brands that we believe Amazon customers will take advantage of when collecting their parcel. So for the customer, for Myer and for Amazon it’s a win-win scenario…

This will mean more customers coming into store, more regularly, to collect their Amazon parcel, or Myer purchases, and whilst there taking advantage of in-store services, such as beauty services and cafés– truly offering a one-stop-shop that integrates the online and offline worlds.

Amazon Australia’s operations director Craig Fuller added, “Not only does it provide our customers with more control, but it enables them to enjoy a quick and simple pickup experience at Myer’s network of conveniently located stores.”

With this new partnership, and Aussie households saving at near record rates during the pandemic lockdowns, Myer’s share price will be one to watch as the nation’s retailers emerge from the viral slowdown.

More reading

• These are the 10 most shorted ASX shares
• Why Australian Ethical Investment’s share price has slid 32% in August
• Opthea share price bounces with Nasdaq listing on the cards
• These are the 10 most shorted shares on the ASX
• What’s driving Arena REIT’s huge weekly share price gain?

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.

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The S&P/ASX 200 Index (ASX: XJO) is home to a large number of shares which I believe can beat the market over the 2020s.

Three quality ASX 200 shares that I would buy are listed below. Here’s why I think they are top investment options:

Altium Limited (ASX: ALU)

The first ASX 200 share to look at is Altium. It is an electronic design software platform provider. Over the last decade Altium has carved out a leading position in its market, which I feel has positioned it perfectly for the future. Not least given the explosion of electronic devices due to the emergence of artificial intelligence and the internet of things. I expect this to drive the Altium share price notably higher over the 2020s.

Nanosonics Ltd (ASX: NAN)

Another ASX 200 share to consider buying is Nanosonics. It is the infection prevention company behind the industry-leading trophon EPR disinfection system for ultrasound probes. While the pandemic has hit its sales hard, I expect a swift rebound once trading conditions recovery. Especially considering the growing importance of infection prevention following the spread of COVID-19 globally. And while further delays in relation to the launch of new products has been a big disappointment and hit the credibility of management, I think it is worth sticking with the company for now.

REA Group Limited (ASX: REA)

Finally, I think this property listings company is an ASX 200 share to buy. Although REA Group will be battling with tough trading conditions for at least the next couple of quarters because of the pandemic, I expect a big rebound once the crisis passes. Especially given its leadership position, growing global operations, new revenue streams, potential price increases, and cost cutting. Overall, I think this make REA Group a great buy and hold option for investors.

More reading

• What exactly is the ASX 200 telling us today about 2020?
• How household savings could boost these ASX share prices
• ASX 200 up 1%: Big four banks charge higher, SKYCITY impresses, Xero tumbles
• Why a recession shouldn’t matter for the ASX share market
• 5 things to watch on the ASX 200 on Thursday

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 and recommends Altium. The Motley Fool Australia owns shares of and has recommended Nanosonics Limited. The Motley Fool Australia has recommended REA 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.

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The S&P/ASX 200 Index (ASX: XJO) is today (at the time of writing anyway) sitting at 6,117.2 points, up 0.95% so far in today’s trading.

Since bottoming out at 4,546 points on 23 March, the ASX 200 is now up more than 34% off those lows where it sits today. For the year so far, it remains down 8.6%. The last time the ASX 200 was at these levels, it was back in February 2019 — a time that now seems a blissful, pandemic-free utopia in hindsight.

So what exactly is the ASX 200 telling us? Markets are supposed to be forward-looking mechanisms, so what kind of future is being priced in today?

I think this is a pertinent question.

Yesterday, we found out that the Australian economy just had its worst quarter (ending 30 June) since records began. Gross domestic product (GDP) slumped by 7% in just the quarter. We are now firmly in recession for the first time in three decades. Notes from this month’s Reserve Bank of Australia (RBA) meeting suggest that it will take years for the economy to return to ‘normal’. Unemployment is expected to be high for years, and inflation low. That’s partly why interest rates are at a record low of 0.25% (which is virtually zero).

And yet, the share market is apparently telling us that things are just as good as they were in February last year.

A strange new world for the ASX 200 and US markets

Over in the United States, things are even stranger. The American economy is unquestionably in a worse state than Australia’s. According to reporting in the Australian Financial Review (AFR), US GDP fell by a painful 9.1% in the quarter ending June 30. And the previous quarterly result (ending March 31) was also worse than Australia’s, falling by 1.3% against Australia’s 0.3%.

And yet the US markets are doing even better than Australia’s. Both of the US’s flagship market indices — the Nasdaq Composite and the S&P 500 — are at record highs as of today. As in, they-have-never-been-higher-in-history record highs.

So what can we assume the markets are telling us? Well, only one thing really, in my view. That this economic crisis will be either V-shaped, or else a very steep U-shaped one. That things will return to normal very soon. That there’s nothing to worry about with these record-breaking GDP numbers. That the monetary stimulus from central banks around the world is enough to mask anything the world throws at it.

I don’t mean to be a pessimist, but I don’t buy it.

I’m not selling everything and going to cash of course. But I am looking hard at my portfolio and weeding out investments that I don’t think are being priced fairly. I’m also building up a cash buffer, in case the markets do realise that things aren’t back to February 2019, that central banks can’t solve every problem under the sun. And if I’m wrong, hey, I’m still mostly invested in (I hope) good quality shares.

More reading

• Why I would buy and hold Altium and these top ASX 200 shares
• How household savings could boost these ASX share prices
• ASX 200 up 1%: Big four banks charge higher, SKYCITY impresses, Xero tumbles
• Why a recession shouldn’t matter for the ASX share market
• 5 things to watch on the ASX 200 on Thursday

Motley Fool contributor Sebastian Bowen 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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