Author: therawinformant

One of the more surprising pieces of news this week has been the advance of our proud national currency – the Australian dollar. The Aussie dollar has been on rather a wild rollercoaster in 2020 so far. It started the year off trading for around 70 US cents. Between January and late February, it slid slightly, going down to around 66 US cents. But then, the March coronavirus market crash came, and our dollar was obliterated, first falling below 60 US cents and bottoming out at 55.1 US cents on 19 March. It was the first time since 2002 that our dollar had sunk to these levels.

We won’t go into too much detail as to why this happened. But in a nutshell, the Australian dollar is regarded as a ‘risky’ currency on global markets due to our economy’s dependence on mineral exports and ties with China. When a market panic occurs (as it did in March), traders tend to rush out of risky currencies like the Aussie and into ‘safe’ currencies like the US dollar.

However, since March, the Australian dollar has recovered very convincingly. By the end of March, it was back above 60 US cents and above 65 by the end of April. Fast forward to this week and the Aussie dollar has reached its highest level since April 2019 – trading as high as 71.41 US cents earlier in the week. It was going for 71.33 US cents at the time of writing.

It’s not just the US dollar that the Aussie has been gaining on either. The Australian dollar is also at its highest level in almost a year against the United Kingdom’s Pound Sterling. At the time of writing, 1 Australian dollar is buying 56 British pence, a level not seen since September last year.

What a high dollar means for ASX shares

Understanding how exchange rates affect the economy is key to benefitting from a high currency. When a currency appreciates, it raises the cost of exporting goods from an economy, whilst simultaneously lowering the cost of imports.

By this logic, companies that are in the exporting game are the losers from this situation. Miners like BHP Group Ltd (ASX: BHP) and Fortescue Metals Group Limited (ASX: FMG) come to mind, as do A2 Milk Company Ltd (ASX: A2M) and Treasury Wine Estates Ltd (ASX: TWE). It’s also bad news for any company that brings its earnings home in US dollars. I’m thinking of CSL Limited (ASX: CSL) and Altium Limited (ASX: ALU) here.

But conversely, a strong Aussie dollar is good news for any companies that import their goods, services or materials into Australia. ASX retailers like JB Hi-Fi Ltd (ASX: JBH), Premier Investments Limited (ASX: PMV), Accent Group Ltd (ASX: AX1) and Harvey Norman Holdings Limited (ASX: HVN) will likely see a shot of oxygen.

How can investors take advantage of a high Australian dollar?

So, how can we invest to take advantage of the strong Aussie dollar, which may not last forever in the current economic climate? Well, checking out the companies named above is a good start. But it might also be worth considering investing in internationally-based exchange-traded funds (ETFs).

It is now relatively cheaper (on a currency basis) to buy these investments than it was when our dollar was fetching 60 or 55 US cents. The iShares S&P 500 ETF (ASX: IVV) tracks most of the largest companies over in the US like Apple, Microsoft and Amazon.com. With a management fee of just 0.04%, it could be a perfect investment for this trend. You can also check out the BetaShares FTSE 100 ETF (ASX: F100), which tracks the 100 largest UK-listed companies like BP, GlaxoSmithKline, HSBC Bank and British American Tobacco. 

Foolish takeaway

Currency shouldn’t be a major contributor to choosing ASX shares for your portfolio. But with the dollar at these highs, it still might be advantageous to have a second look at any of the shares and investments listed above.

More reading

• Is the BHP share price in the buy zone?
• Top brokers name 3 ASX 200 shares to buy today
• BHP’s share price tumbles with this other ASX miner after being hit by broker downgrades
• Why Afterpay, BHP, Cann, & Mesoblast shares are tumbling lower
• Are you ready to invest in ASX shares?

Sebastian Bowen 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’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia owns shares of and has recommended Premier Investments Limited and Treasury Wine Estates Limited. The Motley Fool Australia owns shares of A2 Milk. The Motley Fool Australia has recommended Accent Group. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post How you can take advantage of the surging Australian dollar appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/30xz9AE

In the mid cap space I believe there are a good number of shares that have the potential to grow strongly over the next decade, potentially generating market-beating returns for shareholders.

Three which I think would be great options for long-term focused investors are listed below:

Bravura Solutions Ltd (ASX: BVS)

Bravura is a $1,1 billion provider of software solutions for the wealth management, life insurance, and funds administration industries. I think it is one of the best options in the mid cap space right now. This is due its positive long term growth outlook thanks to the quality and potential of its popular Sonata wealth management platform. In addition to this, the company has bolstered its offering over the last 12 months with the acquisitions of Midwinter and FinoComp. These businesses are expected to open the company up to new and lucrative markets.

Bubs Australia Ltd (ASX: BUB)

Bubs is a $550 million goat’s milk-focused infant formula and baby food company. I think it is well-positioned for growth over the next decade thanks to its growing presence online in China and in supermarkets and pharmacies across Australia. The latter has been boosted materially in recent months with increasing shelf space in Coles Group Ltd (ASX: COL) stores for both its goat’s milk and new cow’s milk infant formula ranges. Another big positive is that Bubs finally appears to have reached a scale which will make its operations more and more profitable over the coming years. All in all, I think the Bubs share price has the potential to smash the market over the 2020s.

Collins Foods Ltd (ASX: CKF)

A final option to consider is $1.1 billion quick service restaurant operator Collins Foods. It is one of the largest operators in the ANZ region with 240 KFC stores in Australia, 40 KFC stores in Europe, 12 Taco Bell across Queensland and Victoria, and 75 franchised Sizzler restaurants around Asia. I believe the company’s Australian and European operations still have a long runway for growth and expect their expansions to underpin solid earnings growth over the next decade.

More reading

• The smartest ASX shares to buy if you have $2,000
• 2 top ASX tech shares to buy right now
• 4 ASX shares I’d buy with $4,000
• Want to beat the market? Try these 3 ASX growth shares
• 4 ASX shares I’d buy to protect against a recession

Motley Fool contributor James Mickleboro owns shares of Collins Foods Limited. The Motley Fool Australia owns shares of and has recommended Bravura Solutions Ltd and BUBS AUST FPO. The Motley Fool Australia owns shares of COLESGROUP DEF SET. The Motley Fool Australia has recommended Collins Foods Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post 3 of the best mid cap ASX shares you can buy right now appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2CAImQN

If you’re on the lookout for quality fully franked dividends then you’re in luck. Despite the many suspensions and deferrals, there are still a good number of fully franked options for investors to choose from.

Two ASX dividend shares that offer generous fully franked dividends are listed below. Here’s why I like them:

Dicker Data Ltd (ASX: DDR)

The first fully franked ASX dividend share to buy is Dicker Data. It is a leading wholesale distributor of computer hardware and software in the ANZ region. Dicker Data has been growing at a very strong rate in recent years thanks to a combination of strong demand, new vendor agreements, and favourable industry tailwinds.

The good news is that it is showing no signs of slowing and is on course to deliver another record result in FY 2020. So much so, the Dicker Data board revealed that it intends to increase its dividend by 31% to 35.5 cents per share this year. Based on the current Dicker Data share price, this represents a very generous 5% fully franked dividend yield.

Wesfarmers Ltd (ASX: WES)

I think this conglomerate could be a dividend share to buy. I expect Wesfarmers shares to be strong performers over the coming years thanks to the positive outlook of many of its businesses and potential earnings accretive acquisitions. Among its quality brands you’ll find Bunnings, Kmart, and Target, as well as ecommerce company Catch Group. Given how rapidly online shopping is growing right now, the acquisition of the Catch business last year looks like a masterstroke.

Looking ahead, I estimate that the company will be in a position to pay a dividend of $1.46 per share in FY 2021. Based on the current Wesfarmers share price, this equates to a fully franked 3.2% dividend yield. While this is not the biggest yield on the ASX, it still smashes those on offer with term deposits and savings accounts.

More reading

• How mandatory masks could impact these ASX shares
• These ASX 200 consumer discretionary shares are bucking the economic cycle
• You probably shop at these 7 ASX retailers. Should you buy shares in them too?
• ASX 200 Weekly Wrap: Blue chip shares pull ASX 200 back over 6,000 points
• Cash rate on hold until 2022? Buy these ASX dividend shares

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

The post Why I would buy these fully franked ASX dividend shares appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/39k3Sp2

ASX small cap stocks are holding up better than their larger counterparts during the Wednesday sell-off with top brokers picking their latest buy ideas for the sector.

The S&P/ASX SMALL ORDINARIES (Index: ^AXSO) slipped 0.8% into the red ahead of the market close when the S&P/ASX 200 Index (Index:^AXJO) tumbled 1.5%.

Well furnished

One small cap that’s helping hold up the Small Ordinaries is the Nick Scali Limited (ASX: NCK) share price.

Shares in the furniture retailer jumped 2.4% to $6.73 in late afternoon trade after Citigroup named it as one of its top picks in the small cap retail sector.

The broker believes it will outperform its peers this calendar year given that the scaled back JobKeeper isn’t expected to make much of a dent on sales.  Most of Nick Scali’s customers are upper to middle income households who are unlikely to qualify for the wage supplement.

Further, demand for furniture could be buoyed by the federal government’s homebuilder grant and  COVID-19 social restrictions.

Citi rates the stock a “buy” with a price target of $8.20 a share.

Fund times ahead

Another small cap that’s bucking the downtrend is the Mainstream Group Holdings Ltd (ASX: MAI) share price.

The stock rallied 1.6% to $0.62 after Morgans reiterated its “add” recommendation on the funds management services business following the release its quarterly update.

“FUA [funds under advice] for the quarter (A$197bn) was up 5% sequentially and 14% on the pcp (A$173bn),” said the broker.

“The quarterly lift in FUA (A$10bn) was broadly evenly split between net inflows and market movements (A$4bn-A$5bn each).”

The broker’s 12-month price target on the stock is $0.74 a share.

Good for tougher times

Meanwhile, the Credit Corp Group Limited (ASX: CCP) share price became the latest buy idea from JP Morgan.

The broker moved the debt collector to “overweight” (meaning “buy”) recommendation as it believes Credit Corp is well placed to benefit from increasing arrears.

“While CCP’s near-term outlook has some uncertainties, particularly with regards to capital allocation, we remain confident in management’s ability to allocate capital to maximize shareholder returns,” said JP Morgan.

“Australian PDL [purchase debt ledger] business never having been in a better strategic position than right now.”

The broker’s 12-month price target is $20 a share.

More reading

• The ASX sector that’s heading for a V-shape recovery
• QBE share price rises despite expected half year loss
• Are ASX tech shares in a bubble?
• Top brokers name 3 ASX 200 shares to buy today
• BHP’s share price tumbles with this other ASX miner after being hit by broker downgrades

Brendon Lau has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of MainstreamBPO Limited. 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 Top brokers list the latest ASX small cap stocks to buy today appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2E8f3pa

The BHP Group Ltd (ASX: BHP) share price has come under pressure on Wednesday and dropped lower.

In afternoon trade the mining giant’s shares have fallen over 3% to $37.59.

Is this a buying opportunity?

One leading broker that sees the BHP share price weakness as a buying opportunity is Ord Minnett.

This morning the broker retained its accumulate rating and $42.00 price target. This price target implies potential upside of almost 12% for its shares over the next 12 months.

If you add dividends into the equation, this potential return stretches to upwards of ~16%.

According to the note, BHP’s iron ore production and shipments came in ahead of the broker’s forecasts during the June quarter. Though, the average price realised of US$77.36 a tonne, was a touch short of expectations.

Looking ahead, the broker feels that the mining giant’s iron ore production guidance of 244 Mt to 253 Mt and shipments guidance of 276 Mt to 286 Mt for FY 2021 might prove too conservative.

In light of this and strong iron ore prices, the broker sees potential upside risk to its earnings estimates for the year ahead.

Combined with its favourable commodity mix, attractive valuation, and outlook, it continues with its positive rating on the company’s shares.

Should you invest?

I agree with Ord Minnett and would be a buyer of BHP’s shares right now.

While I also like Fortescue Metals Group Limited (ASX: FMG) and Rio Tinto Limited (ASX: RIO), BHP remains my preferred pick due to the diversification of its operations, its strong balance sheet, and its growth opportunities.

Another positive is its dividend yield. The consensus estimate is for a fully franked dividend yield of over 4% in FY 2021. However, if iron ore prices remain strong, I suspect this yield could be even more generous.

More reading

• BHP’s share price tumbles with this other ASX miner after being hit by broker downgrades
• Why Afterpay, BHP, Cann, & Mesoblast shares are tumbling lower
• Are you ready to invest in ASX shares?
• Are ASX 200 shares overvalued right now?
• 5 things to watch on the ASX 200 on Wednesday

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 Is the BHP share price in the buy zone? appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/39gQrGh

I try to regularly invest into ASX shares. At least once a month. A few months ago I was investing very regularly because I saw a number of cheap opportunities during the crash.

But the ASX has recovered strongly since March 2020. Over the past two months alone the S&P/ASX 200 Index (ASX: XJO) has gone up just over 10%.

I still think there is a lot of uncertainty in the local and global economy. COVID-19 impacts are being felt around the world and government economic support is starting to wind down. Many businesses seem like less obvious winners at the current prices.

My recent investing has kept the above uncertainty in mind. These are two ASX shares I’ve bought in recent weeks:

WCM Global Growth Ltd (ASX: WQG)

This is a listed investment company (LIC), its job is to invest in shares listed outside of Australia. The Australian dollar continues to strengthen against the US dollar, it’s now worth US$0.71. The stronger the Australian dollar is the cheaper it is to buy US shares.

At the current WCM Global Growth share price of $1.30 the ASX share is trading at a 13% discount to the pre-tax net tangible assets (NTA) at 17 July 2020. Thankfully I bought shares at around $1.25.

I liked the idea of buying a quality LIC at a double digit discount to its NTA. But I also like the investment style of WCM, a California-based asset manager. WCM aims for businesses with an expanding economic moat. One of the main ways it measures this is with a rising return on invested capital, as opposed to a large but static or declining moat. The other key factor that WCM looks for is a corporate culture that supports the expansion of the economic moat.

At the end of June 2020 its five largest holdings were: Shopify, West Pharmaceuticals, MercadoLibre, Visa and Stryker. Just under half of the ASX share’s portfolio is invested in IT and healthcare. I like the long-term outlook for these two sectors. 

Its investment style has performed well. Its investment performance, after fees, has been 20.15% per annum over the past three years.

I think this LIC is a solid ASX share, it even pays a partially franked dividend yield of 3.1%.

WAM Microcap Limited (ASX: WMI)

WAM Microcap is another LIC. It targets ASX share small caps with market capitalisations under $300 million at the time of acquisition.

There have been few Australian investment managers that have performed as well as Wilson Asset Management’s WAM Microcap over the past three years. Since inception in June 2017, WAM Microcap’s portfolio has returned an average of 15.9% per annum (before fees, expenses and taxes), outperforming the S&P/ASX Small Ordinaries Accumulation Index by 10% per annum. Over the past three months the WAM Microcap’s portfolio has returned 32.9%, outperforming the index by 9%.

Future strong performance is definitely not guaranteed, but I think WAM Microcap’s team has shown they can identify good value ASX shares.

I think small caps can produce very strong returns, you just have to choose the right ones. I’m happy to get a fair amount of my small cap exposure with WAM Microcap and receive a good dividend along the way.

At the current WAM Microcap share price of $1.38 it offers a grossed-up dividend yield of 6.2%, though luckily I recently bought shares at a price of around $1.25.

I believe that WAM Microcap will deliver strong total shareholder returns over the next few years from here. However, it tends to fall very hard during market uncertainty, so I may wait until the next market drop to buy more shares.

At the end of June 2020 it had a solid cash weighting of 17.2% to buy beaten-up opportunities if the market drops again.

Foolish takeaway

I really like both of these ASX shares. I think international shares and small cap ASX shares could outperform the broad ASX share market over the longer-term. At today’s prices I’d probably buy WCM Global Growth again due to the high Aussie dollar and the discount to the NTA. But I’d love to buy even more WAM Microcap shares at the right time.

More reading

• 2 ASX shares for growth and dividends
• How to create a yearly income of $65,000 in dividends
• Get paid huge amounts of cash to own these ASX dividend shares
• 3 ASX dividend shares for every income investor’s portfolio
• 4 top ASX dividend shares you should never sell

Motley Fool contributor Tristan Harrison owns shares of WAM MICRO FPO and WCM Global Growth Limited. 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 Here are two ASX shares I’ve recently bought appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2CTLaZ1

The Osteopore Ltd (ASX: OSX) share price surged over 30% around lunch time today before being rapidly sold down to a more modest gain of just 2.4% (at time of writing). The ASX medical share rallied following an announcement from the company regarding its development of a new 3D printed bone implant. 

What did Osteopore announce?

In a release to the market shortly after midday today, the company announced it has signed an Exclusive Option to licence novel 3D printed modular bone implant technology being developed at the Queensland University of Technology (QUT). 

The technology has shown encouraging early stage results for regrowth of long bone defects in patients who have lost more than six centimetres of bone to injury or disease. Additionally, the technology has the potential to disrupt the supply chain model of customised implants. 

Osteopore and QUT will collaborate to generate sufficient clinical data to support regulatory submissions to the Therapeutic Goods Administration (TGA), United States Food and Drug Administration (FDA) and European regulators. As a result, the evaluation of the technology could potentially lead to an opportunity to acquire it. 

The agreement between the parties will progress through two stages. The first stage is to gather clinical data and stage two is regulatory approval and commercialisation. In stage two, Osteopore could have exclusive worldwide licence to commercialise the technology. 

However, the company has advised that this project has a long development pathway and commercialisation of any product could take years. Worst case scenario, there may not be a product at all.

Terms of the agreement and potential market opportunity

Ostopore will provide $40,000 in cash, plus in-kind support and has secured a $100,000 non-dilutive grant from QUT. Under any future commercial agreement with QUT, the company would need to provide a market entry fee of $100,000 and provide royalties with a potential range of 2-6%. 

The market has significant growth potential according to a Boston Consulting Group report published in 2015. In a more recent publication released in March 2018, Boston Consulting reported the compound annual growth rate (CAGR) for reconstructive implant in orthopaedic and spine as being 5.1%. As a result, the global market potential is expected to be $30 billion by 2022. 

About this ASX medical share

According to its website, Ostepore specialises in the production of 3D-printed, bioresorbable implants that are used in conjunction with surgical procedures to assist with the natural stages of bone healing. 

Since the announcement, and following its considerable but short-lived rally, the Ostepore share price has settled at 64 cents at the time of writing.  

More reading

• 2 breakthrough ASX healthcare shares
• 3 innovative ASX shares to buy
• Osteopore share price storms 270% higher on distribution deal

Motley Fool contributor Matthew Donald 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 ASX medical share surges 30% on development news appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2ONARIS

I think one of the best ways for investors to grow their wealth is to make long term investments in quality shares with strong business models and positive outlooks.

Three shares that tick a lot of boxes for me are listed below. I think they could provide outsized returns for their shareholders and potentially allow investors to retire rich. Here’s why I like them:

Appen Ltd (ASX: APX)

Appen is the global leader in the development of high-quality, human-annotated training data for machine learning and artificial intelligence. It has a team of 1 million+ crowd-sourced workers spread out across the globe. Its sizeable team allows the company to collect and label high volumes of image, text, speech, audio, and video data used to build and improve artificial intelligence models. Given the growing importance of artificial intelligence and machine learning and Appen’s leadership position in its field, I feel it is well-placed to continue growing its earnings at a strong rate long into the future.

Domino’s Pizza Enterprises Ltd (ASX: DMP)

Another growth share to consider buying is Domino’s. I think the pizza chain operator could be a long term market beater thanks to its strong market position, positive sales targets, and its bold expansion plans. Domino’s is aiming to grow its global store network by 7% to 9% per annum for the next 3 to 5 years. It is also targeting same store sales growth of 3% to 6% per annum over the same period. If the company is able to at least maintain its margins, this should lead to strong earnings growth over the coming years and drive the Domino’s share price higher.

ResMed Inc. (ASX: RMD)

A final growth share to consider buying is this medical device company. ResMed has a portfolio of cloud-connected devices which care for people with sleep apnoea, chronic obstructive pulmonary disease, and other chronic diseases. The sleep treatment market is tipped to grow strongly over the next decade, which I believe puts ResMed in a position to continue growing its earnings at an above-average rate for some time to come.

More reading

• 2 five star ASX healthcare shares to buy in July
• Why Kogan and these popular ASX shares just hit record highs
• 5 things to watch on the ASX 200 on Wednesday
• Why Morgans thinks the Afterpay share price could be a reporting season hero
• ResMed share price rockets to record highs

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Appen Ltd. The Motley Fool Australia has recommended Domino’s Pizza Enterprises Limited and 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.

The post Get rich with these stellar ASX growth shares appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/39jKus6