Stock Pick

Author: therawinformant

  • Why I would buy and hold CSL and these ASX healthcare shares

    healthcare shares

    Due to favourable long term industry tailwinds, I’m particularly positive on the healthcare industry.

    But with so many top shares to choose from in the industry, it can be difficult to decide which ones to buy.

    To narrow things down I have picked out three ASX healthcare shares that I believe would be fantastic long term options for investors. They are as follows:

    CSL Limited (ASX: CSL)

    The first healthcare share I would buy is CSL. It is one of the world’s leading biotherapeutics companies and has a portfolio of life-saving therapies and vaccines. Pleasingly, the company isn’t resting on its laurels and is investing heavily in its research and development. This year I expect CSL to invest somewhere in the region of ~US$900 million into these activities. These annual investments mean the company has a large number of therapies in its pipeline that have the potential to generates significant sales over the next decade. Overall, I believe CSL is well-positioned to continue growing its earnings at a solid rate for the foreseeable future.

    iShares Global Healthcare ETF (ASX: IXJ)

    Another healthcare option for investors to consider is the iShares Global Healthcare ETF. It provides investors with exposure to companies across a range of sectors including biotechnology, pharmaceutical, and medical devices. This includes many of the world’s biggest healthcare companies such as CSL, Johnson & Johnson, Novartis, and Pfizer. Given the increasing demand for healthcare services globally, I believe this group of companies could outperform the market over the long term. This could make it a quality option for investors.

    Ramsay Health Care Limited (ASX: RHC)

    Ramsay Health Care has been battling with tough trading conditions for a couple of years and things are unlikely to get easier in the immediate term. However, I believe this is already factored into the Ramsay share price. As a result, I think now is the time to focus on the long term. Which I believe looks very positive due to the expected increase in demand for healthcare services and its global footprint. In addition to this, Ramsay has a long history of growing through acquisitions. I suspect there could be more coming in the not so distant future, expanding the company’s operations into new geographies.

    5 stocks under $5

    We hear it over and over from investors, “I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I’d be sitting on a gold mine!” And it’s true.

    And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!

    See the 5 stocks

    *Extreme Opportunities returns as of June 5th 2020

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    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 CSL Ltd. 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.

    The post Why I would buy and hold CSL and these ASX healthcare shares appeared first on Motley Fool Australia.

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  • Is the Wesfarmers or Rural Funds share price a buy for dividend income?

    giving, cash, dividends, bonus, reward, money, gift, return

    Is the share price of Wesfarmers Ltd (ASX: WES) or Rural Funds Group (ASX: RFF) a buy for dividend income?

    I think they could be two of the best dividend shares within the ASX 300.

    We have seen the dividends dramatically cut from businesses like National Australia Bank Ltd (ASX: NAB) and Sydney Airport Holdings Pty Ltd (ASX: SYD).

    But some businesses could be much better dividend options for a few different reasons:

    Earnings reliability

    I think both Wesfarmers and Rural Funds have shown they have resilient earnings during this difficult period.

    Resilient earnings should mean more resilient share prices for Rural Funds and Wesfarmers.

    Wesfarmers boasted of a strong performance during FY20. In the second half of FY20 Bunnings sales were up 19.2%, Officeworks sales were up 27.8%, Catch’s gross transaction value was up 68.7%, Kmart sales were up 4.1% and Target sales were down 1.8%.

    A business which generates solid revenue should translate into solid profit and the board can decide to pay a good dividend.

    Agricultural real estate investment trust (REIT) Rural Funds reaffirmed its guidance of adjusted funds from operations (its cash net rental) of 13.5 cents per share. I think having no change to your earnings guidance definitely counts as being resilient. It also helps that it has a diverse farming portfolio. 

    I think it’s no surprise that the Wesfarmers and Rural Funds share prices are trading at close to their pre-COVID-19 levels.

    Growth plans

    Shares aren’t term deposits that deliver a flat return year after year. If a business isn’t growing then I think it’s in danger of going backwards and becoming a dud share with a dropping share price.

    I like the direction that Wesfarmers is going. It’s trying to diversify its operations with lithium mining and online retail. I like that Bunnings has a national online retail presence. The Catch acquisition was a great buy considering how much ecommerce has exploded due to COVID-19.

    For the Wesfarmers and Rural Funds share prices to rise over time, they must grow their profit and business values.

    Rural Funds has actually announced some acquisition news today. It’s buying 5,409 ha of sugar cane farms with the associated plant and equipment as well as 8,060 ML of water entitlements for $81.1 million.

    The REIT plans to turn approximately 2,200 ha of that into macadamia orchards and a substantial portion of the remaining area able to be used for cropping. This deal will be funded from an increase of the debt facility.

    Commitment to shareholder returns

    Rural Funds still plans to pay a FY21 distribution per unit of 11.28 cents. Wesfarmers is projected to pay $1.50 of dividends per share in FY21.

    Both of these businesses are committed to paying out good levels of profit each year to shareholders.

    Rural Funds tries to increase its distribution by 4% each year whilst also retaining some of the cash rental profit each year to invest in growth. Wesfarmers doesn’t have such a specific dividend growth target, but as its earnings grow over time it can fund a higher dividend.

    Current dividend yields

    Based on the above FY21 dividend expectations, at the current share price Wesfarmers currently has a forward grossed-up dividend yield of 4.7%. At today’s Rural Funds share price it offers a forward distribution yield of 5.6%.

    These are not big yields, but considering the RBA interest rate is now just 0.25%, I think those starting yields are pretty good. Don’t forget, those dividends will hopefully grow over time. So the FY21 yield is just the starting yield on cost.

    Foolish takeaway

    I like both of these ASX shares as potential long-term investments. However, I think the resurgence of COVID-19 may cause a short-term hit to Wesfarmers. Whereas, hopefully, Rural Funds will be largely unaffected. So at the current share prices I think I’d go for Rural Funds first.

    Where to invest $1,000 right now

    When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

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    *Returns as of June 30th

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    Motley Fool contributor Tristan Harrison owns shares of RURALFUNDS STAPLED. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED. 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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  • Viva Energy share price surges 5% following business update

    Energy shares higher

    The Viva Energy Group Ltd (ASX: VEA) share price is up by 5.59% to $1.70 at the time of writing, following a business update by the company.

    What was in the announcement?

    Viva Energy announced that total petrol and diesel sales in Victoria for the month of July 2020 were in line with sales in July 2019. This outcome was achieved despite coronavirus lockdowns in Victoria, with the company citing strong agricultural demand as a driver of sales. Victorian petrol sales alone were down 25% compared to the same period last year. 

    The company reported that petrol sales across Australia without the inclusion of Victoria were down 11% in July compared to the same period last year. 

    The announcement referred to stage 4 coronavirus lock downs in Victoria, stating: “The company is closely monitoring the situation and assessing any further potential impacts on Victorian fuel sales and refining production as a result of these additional measures.”

    About the Viva Energy share price

    Viva Energy is the operator of the Geelong Refinery in Victoria. It supplies more than 1,260 service stations in Australia with liquid fuels and lubricants. The company also supplies aviation fuels, marine fuels, bulk fuels and chemicals.

    Viva Energy recently bought back 1.93 billion ordinary shares for $4.84 billion. 

    For the first half of 2020, Viva Energy released unaudited underlying net profit after tax guidance of $20 million to $50 million. This compared to underlying net profit after tax of $50.9 million in the first half of 2019.

    The company sold 833 mega litres of fuel in April and 922 mega litres in May, down from 1,219 mega litres in March.

    In the 2019 financial year, Viva Energy had earnings before interest tax depreciation and amortisation of $644.5 million. That financial year saw a record operational performance by the company’s refinery asset.

    The Viva Energy share price is up 51.79% from its 52-week low of $1.12, however, it is down 11.46% since the beginning of the year. The Viva Energy share price is down 28% since this time last year.

    Where to invest $1,000 right now

    When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

    See The 5 Stocks

    *Returns as of June 30th

    More reading

    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 Viva Energy share price surges 5% following business update appeared first on Motley Fool Australia.

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  • Stocks retain gains as tech takes off

    Stocks retain gains as tech takes offStocks remain on the upside this Friday afternoon as investors continue to ride the rally in tech and also after mixed data.

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  • TikTok Could Become Microsoft’s Deal of the Decade

    TikTok Could Become Microsoft's Deal of the Decade(Bloomberg Opinion) — Let’s get something clear upfront: Microsoft Corp.’s purchase of TikTok isn’t worth $50 billion. That’s my opinion. But then again, it’s not my money.(2) Some investors in its parent company, ByteDance Ltd., think it’s worth that much, according to a Reuters report last week. Good for them. We’ll soon find out its true value, and more importantly, that of Microsoft’s chief executive officer.After a weekend of speculation, the American software giant came out Monday morning, Beijing time, to confirm talks to buy the short-video sensation that boasts more than 100 million users in the U.S. alone.The opening line of the blog statement notably said: “Following a conversation between Microsoft CEO Satya Nadella and President Donald J. Trump.” This came after after  Trump had suggested that he may ban TikTok from the U.S. altogether.ByteDance, TikTok’s Beijing-based owner, wasn’t mentioned until the third paragraph. I don’t want to downplay the importance of founder Zhang Yiming or his executive team, who have done a fabulous job of building a powerhouse of an internet company, but this deal already transcends them.Nadella is the kingmaker now.The architect of Microsoft’s transformation from PC operating systems to cloud computing, he’s already overseen some big deals. Within a year of taking over as CEO in 2014, he bought the Swedish games company behind Minecraft; later, he closed the $24 billion purchase of professional-network site LinkedIn Corp.An earlier idea to have TikTok, or at least the U.S. operations, spun off and bought by existing ByteDance investors looked good on paper. But it likely wouldn’t have allayed U.S. concerns about data privacy and Chinese control given how opaque the ownership structure would be afterward.As my colleague Tae Kim wrote, a TikTok-Microsoft deal makes sense because it could allay antitrust concerns just days after four other tech CEOs were grilled by members of Congress. I also think it might solve the issue of data transparency by putting the U.S. operations of TikTok in the hands of a trusted, publicly listed American company. Microsoft thinks so, too, outlining how it would transfer and protect user data. The company "would ensure that all private data of TikTok’s American users is transferred to and remains in the United States,” it said. Any such data currently stored outside the U.S. would be deleted from servers overseas, it continued.But first, Microsoft will need to convince the U.S. administration. The company indicated which buttons it’s pushing, mentioning in its statement — before it even named ByteDance — both the U.S. Treasury Department and the Committee on Foreign Investment in the United States.Some U.S. lawmakers are already on board. “Win-win,” Senator Lindsey Graham wrote on Twitter. His fellow Republican John Cornyn and others looked ready to sign off, too.It’s not really up to Congress, but their support adds important political momentum to the deal. Democrat Senator Richard Blumenthal is among those more cautious, noting that such a transaction “should not distract us from the need to crack down on insidious spying & surveillance” by Chinese companies.It’s quite likely other names will pop up as potential suitors, leaked by bankers or ByteDance insiders in the hope of building the illusion of a bidding war. But Microsoft has the credibility and strategy to get a deal past the real gatekeepers in Washington, leaving ByteDance with few other options.The onus is on Nadella to get it done, and quickly. Microsoft said it will complete discussions by Sept. 15.Now let’s look at what’s for sale.ByteDance itself had revenue of $17 billion last year with profits of $3 billion. But that’s the entire company, with a stable of at least 20 apps — including Douyin (the local version of TikTok) and news feed Toutiao. According to The Information, TikTok’s revenue last year was around $300 million globally — that’s less than 2% of an entire company which CB Insights lists as the world’s top unicorn at $140 billion in value. This year, TikTok is aiming for $500 million in sales in the U.S., The Information reports.According to Microsoft, it’s looking to buy operations in the U.S., Canada, Australia and New Zealand. Throw in a little extra for the three smaller markets and some upside, and we’re looking at maybe $700 million in annual revenue this year, $1 billion if we’re lucky. India and the U.K. were not mentioned. These are crucial omissions, given that Britain is also a key Five Eyes security partner and far larger than both New Zealand and Australia, while India is TikTok's largest potential market but was banned after a recent border clash.Facebook Inc. shares trade at 9.6 times sales and Twitter Inc. at 8.5 times sales. Sure, TikTok is growing more quickly, but so was Snap Inc., that once-hip social media app which had an initial public offering in 2017 and posted 590% revenue growth the year before it listed. Snap now trades at 16.5 times sales, and has yet to post an annual profit. The idea that TikTok — without the U.K., India or dozens of other emerging markets — is worth $50 billion today is fanciful. ByteDance’s leadership can be sure that Nadella knows it, too. He has a fiduciary duty to his own shareholders to squeeze TikTok’s owners as hard as possible.After finessing regulators and stroking egos to get this deal done, Microsoft will rightfully expect a big discount. The size of which will prove Nadella’s worth and make this the deal of the decade.(1) For the record: I think the business Microsoft is bidding for is worth closer to $20 billion. That's not to say this will be the transaction price, though.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Tim Culpan is a Bloomberg Opinion columnist covering technology. He previously covered technology for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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  • The Kogan share price rocketed 11% higher today: Is it too late to invest?

    Kogan share price

    The Kogan.com Ltd (ASX: KGN) share price was an exceptionally strong performer once again on Monday.

    The ecommerce company’s shares were up as much as 11% at one stage, before ending the day 9.5% higher at $18.25.

    This latest gain means the Kogan share price is now up 430% from its March low of $3.45.

    Why did the Kogan share price rocket higher today?

    Investors have been fighting to get hold of Kogan’s shares again after the Victorian state government declared a state of disaster and announced a six-week lockdown.

    While supermarkets such as Coles Group Ltd (ASX: COL) and Wesfarmers Ltd (ASX: WES) operated Bunnings home improvement stores are likely to remain open as normal, non-essential retailers are expected to close.

    As we have seen over the last few months, this has accelerated the shift to online shopping and led to a material increase in sales and customer numbers for ecommerce companies such as Kogan and Temple & Webster Group Ltd (ASX: TPW).

    Investors appear confident that this will be the case again with the Victorian lockdown, which could position Kogan for another outstanding quarter of sales and profit growth.

    Pleasingly, they may not have to wait long for Kogan to reveal how it is performing. It is scheduled to release its full year results in two weeks on Monday 17 August 2020. I suspect the company will provide investors with an update on trading during the first quarter with its results.  

    Is it too late to invest?

    I think Kogan’s shares are looking fully valued now, so I wouldn’t buy them if you’re just looking for a quick gain.

    However, I would be a buyer of them if you plan to hold on for the long term. Given its positive long term outlook from the shift to online shopping, potential acquisitions, and its expansion into other verticals, I believe Kogan can grow significantly over the next decade.

    This could make the Kogan share price a market beater over the 2020s.

    5 stocks under $5

    We hear it over and over from investors, “I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I’d be sitting on a gold mine!” And it’s true.

    And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!

    See the 5 stocks

    *Extreme Opportunities returns as of June 5th 2020

    More reading

    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 Kogan.com ltd and Temple & Webster Group Ltd. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Wesfarmers Limited. The Motley Fool Australia has recommended Kogan.com ltd and Temple & Webster 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.

    The post The Kogan share price rocketed 11% higher today: Is it too late to invest? appeared first on Motley Fool Australia.

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  • The Biggest Bull on a Gasoline-Powered Future Is… 7-Eleven?

    The Biggest Bull on a Gasoline-Powered Future Is… 7-Eleven?(Bloomberg Opinion) — You might think that 2020 was the year everyone gave up on petroleum-powered transport. Royal Dutch Shell Plc Chief Executive Officer Ben van Beurden has expressed doubts about whether oil demand will ever return to pre-Covid levels. The world’s largest carmaker Volkswagen AG pledged that more than a fifth of its vehicles will be battery-driven by 2025.The International Energy Agency is pushing for 30% of vehicle sales to be electric by 2030 and expects gasoline demand to peak late this decade even under current policies. Major oil refineries are switching to manufacture raw materials for plastics and jet fuel on the expectation that consumption in their core market of powering road transportation is in decline.Seven & i Holdings Co. has a different view. It’s impossible to see the 7-Eleven owner’s $21 billion offer to buy Marathon Petroleum Corp.’s Speedway convenience stores as anything but a wager on the future of their main sales item: gasoline. Seven & i’s motivation is straightforward. Speedway has 3,900 sites concentrated in the Midwest and South of the U.S. That’s equivalent to about 40% of 7-Eleven’s existing North American network, and turns over about $1.5 billion of annual earnings before interest, taxes, depreciation and amortization. By using its convenience-store expertise, Seven & i(1) can upgrade Speedway’s shelves to a more attractive and profitable mix of own-brand products. Fuel, which accounts for about three-quarters of revenue and half of gross profit, will largely look after itself.As we've written, that prediction looks like a mistake. Even under a Trump administration that’s worked hard to tear up fuel-economy rules, gas demand has stood still for four years. Despite evidence that urban traffic has rebounded close to pre-pandemic densities and long holiday road trips are exceeding former levels, on a trailing 12-month basis, gasoline consumption is currently at its slowest since the early 2000s.The increasing efficiency of conventional vehicles is already enough to reduce the amount that car owners spend filling the tank and the number of trips they make to gas stations, a dynamic that will hurt both the fuel and non-fuel sides of the business.Add in the impact of electric vehicles and the effect will be compounded. At present, there are just 1.5 million on U.S. roads; by the end of the decade, General Motors Co. expects to see at least twice that number sold there every year, equivalent to nearly 20% of annual sales. While gas stations can install chargers to accommodate this market, battery vehicles charged at home or in workplaces won’t have to make the regular visits to the pump and convenience store that even hybrid cars require.The risk for Seven & i is that it’s willfully blind to these looming changes. Battery cars as a share of U.S. vehicle sales will rise to just 5% in 2030 and 11% in 2050, according to its presentation. That’s drastically lower than most carmakers and oil companies are predicting (BloombergNEF pegs the share at around 25% in 2030 and above 60% by 2040). Remarkably, Seven & i posits as one of the “reasons for the acquisition” the way that taking control of Marathon’s store network will help it achieve environmental, social and governance goals such as installing energy-efficient lighting, switching stores to renewable power, and reducing use of plastic packaging. This misses the forest for the trees. The overwhelming majority of emissions from a gas station aren’t the Scope 1 and Scope 2 type generated on-site and from buying electricity, but the Scope 3 carbon generated when the fuel it sells is burned in car engines.Unlike the ESG initiatives that Seven & i boasts about, this isn’t just a nice-to-have factor to stick in the corporate responsibility report. The shift that the automotive and petroleum industries expect to see in the power-trains of road vehicles over the coming decade is a challenge to the core of the fuel retail model. With this deal, 7-Eleven will go from depending on gas for 20% of its gross profit to 30%. It’s heading the wrong direction down a one-way street.(1) Although the 7-Eleven brand is used around the world, we're using "7-Eleven" in this article to refer to the North American unit owned by the Japanese parent company, Seven & i.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.David Fickling is a Bloomberg Opinion columnist covering commodities, as well as industrial and consumer companies. He has been a reporter for Bloomberg News, Dow Jones, the Wall Street Journal, the Financial Times and the Guardian.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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  • The ASX stocks hit by Victoria’s stage 4 forced shutdowns

    A wide range of ASX stocks are about to be hit by forced shutdowns in Victoria as the state grapples to control the second wave of COVID-19 cases.

    The state’s premier Danial Andrews is ordering most retailers to shutter along with construction sites, car dealerships and manufacturing plants, reported the Australian Financial Review.

    ASX stocks slumping on the news

    The news sent the JB Hi-Fi Limited (ASX: JBH) share price and the Harvey Norman Holdings Limited (ASX: HVN) share price tumbling to intra-day lows. Both stocks tumbled over 2% each at the time of writing.

    Listed auto dealerships also hit the lows of the Monday trading session. The AP Eagers Ltd (ASX: APE) share price crashed 5.6% to $7.66 while the Autosports Group Ltd (ASX: ASG) share price lost 2.3% to $1.27.

    Another to lose steam in late trade is the Lendlease Group (ASX: LLC) share price. It lost 2.4% to $11.08, probably on worries that some of its construction sites will need to be closed.

    New restrictions on construction

    There will only be three types of construction that will be allowed to continue in metropolitan Melbourne but with stricter restrictions coming into force by midnight Friday.

    Government infrastructure projects can continue. While the number of people working on these projects have been halved, the state government will be looking to reduce this even further.

    Large non-residential construction projects with buildings above three storeys will be allowed to remain open.

    However, operators will need to cut the number of workers to “a practical minimum” but with no more than 25% of their workforce.

    For residential sites, operators cannot have more than five people working onsite at any one time.

    Smaller companies to get more help

    While the government is offering some financial support for businesses, its mainly aimed at smaller business and won’t make much difference to larger listed companies.

    Premier Andrews isn’t ruling out providing more support packages targeting specific industries, but I don’t think these will make much difference to larger listed companies.

    ASX winners benefiting from State of Disaster

    On the flipside, this latest development sent shares in a handful of ASX stocks higher. The Kogan.com Ltd (ASX: KGN) surged nearly 10% to a record high of $18.31 ahead of the close.

    The Coles Group Ltd (ASX: COL) share price and Woolworths Group Ltd (ASX: WOW) share price also outperformed the S&P/ASX 200 Index (Index:^AXJO). Supermarkets are allowed to operate during stage four restrictions and so are petrol stations.

    This is why the Viva Energy Group Ltd (ASX: VEA) share price and Ampol Ltd (ASX: ALD) share price surged by over 5% each.

    Legendary stock picker names 5 cheap stocks to buy right now

    Motley Fool resident tech stock expert Dr. Anirban Mahanti has stumbled upon five stocks he believes could be some of the greatest discoveries of his investing career.

    These little-known ASX stocks are growing like gangbusters, yet you can buy them today for less than $5 a share. Click here to learn more.

    See these 5 cheap stocks

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    Brendon Lau owns shares of Woolworths Limited. Connect with me on Twitter @brenlau.

    The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Kogan.com ltd. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Woolworths Limited. The Motley Fool Australia has recommended Kogan.com 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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  • Why you should own a piece of the world’s biggest company

    apple with a slice out of it

    The king is dead. Long live the king!

    This is the chorus I imagine ringing through the halls at Apple Inc.‘s (NASDAQ: AAPL) corporate headquarters in Cupertino, California in the United States.

    Listed on the tech-heavy Nasdaq Inc (NASDAQ: NDAQ), the Apple share price surged 10.5% on Friday. Investors piled in after the company’s third quarter results revealed revenue grew by an impressive 11% from the same quarter in 2019, among other numbers that beat analysts’ expectations.

    That brings Apple’s year-to-date gains to 41.5%. And it lifts the company’s market capitalisation to an eye-popping US$1.84 trillion (AU$2.57 trillion).

    The share price leap was enough to see Apple surpass Saudi Arabia’s national oil company, Saudi Aramco, which Bloomberg reports is worth US$1.76 trillion. The sharp gain was also enough to comfortably put Apple ahead of its customary sparring partner, Microsoft Corporation (NASDAQ: MSFT), with a current market cap of ‘merely’ US$1.55 trillion.

    A lesson in long-term investing

    Few blue chip companies offer a better lesson in the benefits of buying and holding quality shares for the long term than Apple.

    Let’s go back 20 years, a decent timeline for long-term investors to hold onto quality stocks. On 4 August 2000, you could have bought Apple shares for US$3.38. Today, they are worth US$425.04. That’s a gain of 12,475%. And not from a highly speculative and high-risk micro cap, either.

    Twenty years too long for you? How about 10 years? In August 2010, you could have picked up shares in Apple for US$34.50. Still, a very handy 1,132% gain at the current Apple share price.

    And in after hours trading, the stock continues to edge higher, up 0.5% at time of writing.

    Why you should look beyond the ASX

    There are plenty of great Australian companies listed on the ASX. And you should certainly own a number of them in your diversified portfolio.

    But ASX shares only make up some 2% of the total global market. If you limit yourself to shares on the ASX, you’re shutting out 98% of the investment opportunities available to you.

    Most brokers, online and physical, now enable you to buy international shares more easily and at a lower cost than ever before. And if you want to own a piece of the world’s most valuable company before it potentially runs even higher, you’ll need to look offshore.

    Legendary stock picker names 5 cheap stocks to buy right now

    Motley Fool resident tech stock expert Dr. Anirban Mahanti has stumbled upon five stocks he believes could be some of the greatest discoveries of his investing career.

    These little-known ASX stocks are growing like gangbusters, yet you can buy them today for less than $5 a share. Click here to learn more.

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    Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Bernd Struben 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 Apple and Microsoft and recommends the following options: long January 2021 $85 calls on Microsoft and short January 2021 $115 calls on Microsoft. The Motley Fool Australia has recommended Apple. 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 Fortescue Metals share price just hit a new record high

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    The Fortescue Metals Group Limited (ASX: FMG) share price has been a positive performer on Monday.

    At one stage today the iron ore producer’s shares were up 3% to a new record high of $17.92.

    When the Fortescue share price reached that level, it meant it was up a remarkable 126% since this time last year.

    Why is the Fortescue share price at a record high?

    Investors have been buying Fortescue shares on Monday after the iron ore price recorded a solid gain last week.

    According to CommSec, the spot price of the steelmaking ingredient rose by 1.7% last week to end it at US$111.45 a tonne.

    This is great news for Fortescue, given its ultra-low cash costs per tonne. In its recent fourth quarter update, Fortescue revealed that it expects its C1 cost to be US$12.94 per wet metric tonne in FY 2021.

    And while Fortescue’s iron ore doesn’t sell for the benchmark spot price because of its lower grade, it still stands to make bumper profits on each tonne sold.

    In FY 2020 it was able to command an average realised selling price of US$81 per dry metric tonne. This bodes well for earnings and dividends in the year ahead.

    What else is driving the Fortescue share price higher?

    Also supporting the Fortescue share price has been a broker note out of Macquarie.

    Last Friday, analysts at the investment bank retained their outperform rating and lifted their price target on the company’s shares to $18.00.

    Macquarie was impressed with its better than expected fourth quarter and also its guidance for the year ahead.

    The broker also notes that its medium-term outlook looks positive and should be supported by the Eliwana operation. It was happy to see that the development is on track and expects it to improve its product mix in the future.

    The Eliwana project underpins the introduction of a 60.1% iron grade product, West Pilbara Fines, and will maintain Fortescue’s low cost status. Management notes that it provides greater flexibility to capitalise on market dynamics while maintaining its overall production rate of a minimum 170mtpa over 20 years.

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    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.

    The post The Fortescue Metals share price just hit a new record high appeared first on Motley Fool Australia.

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