Author: therawinformant

In my opinion, investing in ASX 200 shares is very much a long term game. Here we look at two quality ASX 200 shares that may not have been top performers over the past year in terms of share price gains, but which I believe are both well positioned for above average shareholder returns over the next five years and beyond.

2 ASX 200 shares to buy and hold 

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

The Soul Patts share price rallied strongly during 2018, however lost some ground in the first part of 2019. Since then, it has been largely trending sideways, despite a dip in the early phase of the coronavirus pandemic. However, I believe looking back over a longer period provides greater insight into the Soul Patts business model. Over the past 10 years, this ASX 200 share has increased by nearly 60%.

In fact, Soul Patts has a strong, long-term track record of outperforming the ASX index. Also, it has been listed on the ASX for over a century, and has paid a dividend every year in that time.

I am particularly attracted to Soul Patts as an ASX 200 share investment due to its highly diversified business model. The company invests across a broad spectrum of industries, ranging from pharmacies and telecommunications to mining and building products.

Soul Patts also keeps a significant amount of cash on its books. This positions it well to snap up any lucrative investment opportunities that may come its way. With its share price currently trading at well below levels seen in early 2019, Soul Patts is definitely in my buy zone right now.

Blackmores Limited (ASX: BKL)

The Blackmores share price has experienced a downward trend after its lofty heights at the beginning of 2016 when it was trading above $210. It is now trading at $73.15. However, I feel this downward trend needs to be considered within the context of Blackmores’ share price performance during 2015, when it grew at a phenomenal pace. At the beginning of 2015, the Blackmores share price was trading at around half of its current level.

Granted, Blackmores recent financial performance has not been overly impressive. In particular, the company’s operations in China have underperformed. However, Blackmores now has a plan in place to rejuvenate its growth in Asia, particularly in the massive Chinese market. The company is injecting more funds into its South East Asian operations, and will also target the Indian market.

Despite the challenges ahead, Blackmores remains my buy zone. I believe that its Asian strategy holds promise, and with its share price well down on the levels seen at the beginning of 2019, I believe it offers a reasonably good buying opportunity for patient, long-term investors.

Foolish takeaway

Soul Patts and Blackmores are two quality ASX 200 shares that are in my buy zone right now. My pick of the two would probably be Soul Patts, due to its more diversified business model and strong track record of shareholder returns.

More reading

• How to create a yearly income of $65,000 in dividends
• Fund managers have been buying these ASX shares
• What I’m looking for in dividend shares during COVID-19
• 2 ASX shares that could be 10-baggers
• 3 top ASX 200 blue chip shares to buy

Motley Fool contributor Phil Harpur owns shares of Blackmores Limited. The Motley Fool Australia owns shares of and has recommended Blackmores Limited and Washington H. Soul Pattinson and Company Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Growth and dividends. That’s the holy grail that most ASX 200 share investors are looking for.

It’s a rare combination, but one that can be an absolute gold mine if you can find it.

If you’re looking to invest $10,000 for both growth and dividends, here’s how I’d go about setting up a brand new ASX 200 share portfolio.

Where I’d invest $10,000 in ASX 200 shares

I’m going to assume I’m building a diversified portfolio from the ground up. I personally like the ‘satellite’ approach, which is underpinned by a diversified core with some smaller allocations to growth companies.

That means it’s good to start with a cornerstone investment that can underpin portfolio growth. With $10,000 to invest, allocating your first $5,000 to a diversified exchange-traded fund (ETF) like Vanguard Australian Shares Index ETF (ASX: VAS) could be a good move.

Vanguard Australian Shares Index ETF seeks to track the S&P/ASX 300 Index (ASX: XKO) and invests in 306 companies. With a management fee of just 0.10% p.a., this Vanguard fund could give your portfolio instant diversification with a high weighting towards ASX 200 shares.

Once you’ve got your $5,000 ETF investment, it’s time to build out the ‘satellite’. If you’re looking for growth in the next 10 years, it’s worth thinking about potential boom industries.

To me, that means I’m looking in the biotech and data management industries.

With the remaining $5,000, I wouldn’t want to spread my investment too thin across ASX 200 shares. That means shares like Polynovo Ltd (ASX: PNV) and NextDC Ltd (ASX: NXT) could be in my sights.

Polynovo continues to kick goals and make the most of its significant research and development capabilities. Polynovo shares are up 17.65% this year but further applications of its NovoSorb BTM product could see the ASX 200 biotech share climb higher, in my view. Specifically, Polynovo is eyeing off the lucrative breast augmentation and hernia repair markets right now.

I think the data management sector could also have a huge decade in the 2020s. NextDC is currently a leader in the data storage and security space. That leaves the ASX 200 tech share well-placed to climb higher if earnings continue at a strong pace in the next decade.

So… what’s the end result?

Putting $5,000 into Vanguard Australian Shares Index ETF should provide a handy dividend and franking credits for investors. Then, investing $2,500 in each of NextDC and Polynovo shares rounds out your ASX portfolio with a potential growth platform. If these 2 Aussie companies can continue their strong growth in the next 10 years, then that could be a solid mix of growth and dividends by 2030, in my opinion.

More reading

• ASX 200 Weekly Wrap: Blue chip shares pull ASX 200 back over 6,000 points
• 3 reasons to buy Vanguard Australian Shares Index ETFs
• These were the worst performing ASX 200 shares last week
• 3 excellent ASX ETFs to buy for dividends
• Where to invest your first $500 into ASX shares

Ken Hall owns shares of Vanguard Australian Shares Index. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of POLYNOVO FPO. 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 Noxofarm Ltd (ASX: NOX) share price soared after positive results regarding its cancer treatment drug, Veyonda, were released this morning. The immuno-oncology drug development company saw its share price rise 12% to 37 cents on the news. Noxofarm shares have since been sold down to 34 cents (at the time of writing) representing a more modest gain of 3% for the day so far.

While this is good news for the company, the drug is still a very long way off commercialisation stage. If Veyonda does actually reach commercialisation, it’s likely the Noxopharm share price will once again surge. Currently, however, Noxopharm continues consuming cash via capital raisings. The company’s share price has been gradually shrinking over the past couple of years due to the ballooning number of shares on issue. Noxopharm has already undertaken two equity raises this year.

What does Noxopharm do?

Noxopharm is an ASX listed, clinical stage drug development company. Noxopharm’s current clinical stage drug is Veyonda. Veyonda aims to work with the body to fight cancer, not against it as is commonplace. It enhances the cancer-killing effect of standard chemotherapy and radiotherapy. Thus, enabling lower doses of these toxic therapies to be successfully administered. Furthermore, the drug seeks to activate the body’s innate immune cell function to attack those cancer cells that have survived the initial treatment.

Why did the Noxopharm share price soar?

The Noxopharm share price soared as it was announced that independent data confirmed Idronoxil could convert ‘cold’ tumours to ‘hot’ tumours. Idronoxil is the main active ingredient in Veyonda. This action is regarded as a fundamental goal in enabling immuno-oncology drugs. These drugs have long been hailed as the future of cancer therapy, but are poorly effective in ‘cold’ tumours. ‘Cold’ tumours are the majority of those found in human cancer patients. The ability to convert tumours to ‘hot’ restores cancer-fighting immune cells to tumours. Therefore enabling the body to aid in the fight against cancer.

This conversion is seen as a prerequisite in expanding the annual US$20 billion immuno-oncology drug market. Furthermore, a patent has been lodged on this potentially highly valuable intellectual property with Noxopharm to commence discussions with global oncology firms.

What now for the Noxopharm share price?

Despite this encouraging news, the data is only pre-clinical and, as such, the drug is still a long way from being released to the markets. Nevertheless, it is much needed good news for the ASX biotech stock. The Noxopharm share price has seen its share price spike 100% so far in July despite this being the first piece of news announced this month.

More reading

• 2 quality ASX 200 shares to buy and hold beyond 2027
• How to invest $10,000 in ASX 200 shares for growth and dividends
• Why Catapult, Eclipx, FlexiGroup, & Whispir shares are charging higher
• The Coles share price is flying under the radar
• Why CSR, South32, Sydney Airport, & Webjet shares are tumbling lower

Motley Fool contributor Daniel Ewing 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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In afternoon trade the S&P/ASX 200 Index (ASX: XJO) looks set to start the week with a disappointing decline. At the time of writing the benchmark index is down 0.6% to 5,995.3 points.

Four shares that have not let that hold them back are listed below. Here’s why they are charging higher:

The Catapult Group International Ltd (ASX: CAT) share price has rocketed over 12% higher to $1.43. Investors have been buying the sports analytics and wearables company’s shares following the release of its full year update. According to the release, Catapult generated net free cash of $9 million in FY 2020. This was a massive $24.1 million increase on FY 2019’s result. As a result, it has achieved positive cash flow a year earlier than forecast. This was driven partly by its subscription-based business model.

The Eclipx Group Ltd (ASX: ECX) share price is up 6% to $1.38. This follows the announcement of a binding agreement for the sale of the Right2Drive business to Growth Factor Group for a purchase price of up to $26.5 million. The transaction includes an ongoing commercial relationship with Right2Drive, including a right to supply new vehicle leases to Right2Drive for a period of three years. All existing leases between Eclipx and Right2Drive will also remain on foot.

The FlexiGroup Limited (ASX: FXL) share price is up 3.5% to $1.25. This morning FlexiGroup released an update on its buy now pay later platform, Humm. According to the release, fourth quarter ecommerce volume was up 315%, with total transactions up 447% on the prior corresponding period. This was driven by a record number of ecommerce and instore integrations during the quarter and a new BPAY feature which allows customers to pay for bills in manageable interest. At the end of the quarter, the humm platform had a total of 56,000 retail partners.

The Whispir Ltd (ASX: WSP) share price has surged 17% higher to $3.94 following its fourth quarter update. The communications workflow platform provider’s update revealed strong demand by new and existing customers during the pandemic. According to the release, the company’s annualised recurring revenue rose 4.2% over the March quarter and 35.7% over the prior corresponding period to $42.2 million. This was driven by strong growth in the ANZ and Asia regions.

More reading

• Whispir share price surges 8% to a record high on stellar Q4 update
• FlexiGroup share price jumps 8% higher following BNPL update
• Catapult share price on watch after FY20 Results Preview
• These are the 10 most shorted shares on the ASX
• How to get rich by investing in small cap ASX shares

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 Catapult Group International Ltd and Whispir Ltd. The Motley Fool Australia has recommended Catapult Group International Ltd, FlexiGroup Limited, and Whispir 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 Why Catapult, Eclipx, FlexiGroup, & Whispir shares are charging higher appeared first on Motley Fool Australia.

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The Coles Group Ltd (ASX: COL) share price has surged close to 20% in the past 2 months and is currently trading near record highs. So, what is fuelling the company’s share price and is now the time to invest in Coles shares?

Second wave fears fuelling demand

With Melbourne entering a 6-week lockdown period and fears of a second wave of coronavirus cases growing across the country, supermarkets like Coles could see a renewed surge in demand.

Earlier this month, the company was forced to re-impose purchase restrictions in Victoria as panic-buyers raided supermarkets. Coles has since lifted purchase restrictions after reassuring customers that border closures will not disrupt food and grocery supplies.  

How has Coles performed?

In late April, Coles released its 3rd quarter sales update for FY20, which reflected the unprecedented demand seen during the coronavirus pandemic. Coles reported a 12.9% surge in revenue of $9.2 billion for the quarter, whilst also highlighting a 12.4% increase in comparable sales growth.

According to the company, with more Australians confined to living and working from home, household consumption has surged. As a result, Coles saw a significant increase in demand for general groceries, meat, health, and home products.

However, with the surge in demand Coles has also seen an increase in costs. The company has recruited around 12,000 casual team members in order to deal with the surging demand, whilst also spending more money on security and cleaning services.  

The outlook for Coles

As more customers continue to work from home, post-pandemic, Coles expects consumer behaviour and habits to change as well. The company expects consumers in the future to increase the amount they purchase whilst also utilising online shopping for convenience.

Coles saw 14% growth in online sales revenue for the 3rd quarter, despite its home delivery and ‘Click&Collect’ services being temporarily suspended in March. In order to accommodate the change in consumer behaviour, Coles is looking to increase its online capacity in the future.  

Should you buy?

I think it is important for investors to understand that a surge in demand doesn’t automatically translate into a higher share price. The company still has to invest heavily in e-commerce and other services in order to maintain its growth.

However, despite the increase in costs, I think that Coles is well positioned for growth in 2020 and beyond. The company has a strong pipeline of investment opportunities that are designed to improve its supply chain efficiency and cash status. Examples of this is include investing $950 million over 6 years into automated distribution centres, and developing partnerships with global online specialists.

All that being said, I think a prudent strategy would be to wait until after the August reporting season before buying shares in Coles.

More reading

• Coles and 2 more ASX 200 shares to watch this week
• ASX 200 Weekly Wrap: Blue chip shares pull ASX 200 back over 6,000 points
• Buy these strong ASX shares for your retirement portfolio
• 4 ASX shares I’d buy to protect against a recession
• Top ASX dividend shares to buy in July 2020

Motley Fool contributor Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of 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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In afternoon trade the S&P/ASX 200 Index (ASX: XJO) is on course to start the week with a sizeable decline. At the time of writing the benchmark index is down 0.65% to 5,994.5 points.

Four shares that have fallen more than most today are listed below. Here’s why they are tumbling lower:

The CSR Limited (ASX: CSR) share price is down 4.5% to $3.48. Investors have been selling the buildings products company’s shares following the release of a bearish broker note out of Morgan Stanley. Its analysts have downgraded CSR’s shares to an underweight rating and cut the price target on them to $3.10. The broker expects its performance to be impacted by lower activity levels because of the pandemic.

The South32 Ltd (ASX: S32) share price is down 2% to $2.18. Investors have been selling the mining giant’s shares after the release of its fourth quarter update. South32’s update revealed record production at its Brazil Alumina, Hillside Aluminium, and Australia Manganese mines in FY 2020. However, things weren’t quite as positive for its Illawarra metallurgical coal production. It was below guidance for the year due to challenging strata conditions. The company also warned that commodity prices could be lower for an extended period of time.

The Sydney Airport Holdings Pty Ltd (ASX: SYD) share price is down almost 1.5% to $5.40. The airport operator’s shares have come under pressure following the release of its traffic update for June. That update revealed that a total of 172,000 passengers passed through its gates during the month. This was a 94.9% reduction on the prior corresponding period’s ~3.4 million passengers.

The Webjet Limited (ASX: WEB) share price is down 5% to $2.85. Investors have been selling travel shares on Monday amid increasing concerns over the recovery of the domestic travel market. This follows a spike in coronavirus cases in pockets of New South Wales and further cases in Victoria. Given how important these states are for domestic tourism, this could derail the recovery and put pressure on the likes of Webjet.

More reading

• ASX 200 down 0.5%: Sydney Airport and South32 updates, HUB24 delivers record Q4
• Why the South32 share price is falling today
• Sydney Airport share price on watch after traffic update
• ASX 200 Weekly Wrap: Blue chip shares pull ASX 200 back over 6,000 points
• These are the 10 most shorted shares on the ASX

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Webjet 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 Why CSR, South32, Sydney Airport, & Webjet shares are tumbling lower appeared first on Motley Fool Australia.

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