Author: therawinformant

The S&P/ASX 200 Index (ASX: XJO) has bounced back strongly on Tuesday and is up over 3% in early trade.

This follows a positive night of trade on U.S. markets which saw both the Dow Jones and Nasdaq indices recover from an early sell off to record solid gains.

While a large number of ASX 200 shares are pushing higher today, one standout has been the Afterpay Ltd (ASX: APT) share price.

In morning trade the payments company’s shares have rocketed almost 8% higher to a new record high of $55.19.

It isn’t just Afterpay on the rise today. The Zip Co Ltd (ASX: Z1P) share price is also up 8% to $6.26 at the time of writing. This puts it within sight of its record high of $6.97.

Today’s gains mean that Afterpay’s shares are now up 590% from their March low and Zip’s shares are up almost 500% from their March low.

This has been driven by impressive sales and customer growth by both companies and the avoidance of a deterioration in bad debt levels during the pandemic. These positive metrics appear to have convinced the market that their business models are far more robust that many gave them credit for.

Can Afterpay and Zip shares go higher?

While the short term performance of their shares is difficult to predict, I believe over the long term their shares can go materially higher from here.

Thanks to international expansion, the increasing popularity of the payment method, and their massive market opportunities, I feel both companies are well-positioned to deliver very strong sales growth for many years to come.

Though, given the premium their shares trade at and the risks involved, I would suggest investors try to limit an investment in either of their shares to just a small part of a balanced portfolio.

I’m not alone in thinking they could be good options for investors. Earlier this month Morgans placed an add rating and $7.00 price target on Zip’s shares and Bell Potter put a buy rating and $65.00 price target on Afterpay’s shares.

More reading

• Is the Altium share price the steal of the century?
• The top ASX growth shares I would buy for the 2020s
• The Afterpay share price is up 580% from its March low
• Got $5,000 spare? Consider Wesfarmers shares and these 2 other ASX companies
• Keep a watch on the Zip Co share price and 1 other ASX tech this June

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 ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. 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 Afterpay and Zip shares are rocketing higher today: Can they go even higher? appeared first on Motley Fool Australia.

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If you’re looking to invest $1,000 into the Australian share market, then there are a lot of quality options for investors to choose from.

To narrow things down, I have picked out two ASX 200 shares that I think would be smart choices for investors. Here’s why I like them:

Aristocrat Leisure Limited (ASX: ALL)

I think Aristocrat Leisure would be a great place to invest $1,000 right now. Especially with its shares down 35% from their 52-week high. While a pullback in its share price has not been unwarranted considering the negative impact of the pandemic on its business, I think the selloff has been overdone.

Aristocrat Leisure’s shares are currently changing hands at 21x estimated FY 2021 earnings. I think this is great value given its very positive long term outlook. This is thanks to its leading pokie machine business and its lucrative digital business which is generating significant recurring revenues from its millions of daily active users. Combined, I believe they will underpin solid earnings growth over the next decade.

Domino’s Pizza Enterprises Ltd (ASX: DMP)

Another ASX share which I think investors ought to consider investing $1,000 into is Domino’s. I believe the pizza chain operator is one of the best buy and hold options on the Australian share market. This is thanks to its positive long term outlook due to its expansion plans and management’s same store sales targets.

Over the next five years Domino’s is aiming to deliver annual same store sales growth of 3% to 6% and annual organic new store additions of 7% to 9%. And while there is a risk that new store openings will suffer during the pandemic, I’m confident the company will soon catch up with its target. Overall, I expect this winning combination of organic and inorganic growth to underpin strong earnings growth over the next decade.

More reading

• Coles shares and 2 other ASX 200 companies to buy in the current market
• The Santos share price is down 36%! This is what I’d do today
• Is the Altium share price the steal of the century?
• I think Aristocrat shares are outstanding value
• Got $3,000? These 5 beaten-down ASX shares are begging to be bought

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Domino’s Pizza Enterprises 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 Investing $1,000 into these ASX 200 shares could be a smart move appeared first on Motley Fool Australia.

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ASX 200 shares are under pressure again after a fourth straight day of losses. The S&P/ASX 200 Index (ASX: XJO) is now down 7.2% since last Wednesday’s close.

That means there could be some great bargains in the current market. Xero Limited (ASX: XRO), Newcrest Mining Ltd (ASX: NCM) and Coles Group Ltd (ASX: COL) shares are just a few of the top shares that I think can help you prepare in the current market environment.

3 ASX 200 shares to buy in the current market

It’s hard to know how to position for a second market crash at the best of times, let alone in the midst of a pandemic.

I think non-cyclical earnings and large-cap shares are the key to weathering any storm. Coles shares could fit this bill.

The Coles share price rocketed higher in February and March when the first coronavirus restrictions kicked in. While I don’t think we’ll see the same level of panic buying again in 2020, Coles earnings could still be solid.

That’s especially the case given times are tough right now and many Aussies are cutting expenses where they can. That could mean less spending at cafes and restaurants and more buying from supermarkets like Coles.

Another ASX 200 share that could be in the buy zone is Newcrest Mining. The Newcrest share price has fallen 1.4% lower in 2020 which is a 13.0% outperformance compared to the ASX 200 benchmark index.

Gold shares tend to do well in a share market crash. Investors flock to the safe-haven asset as a store of value when ASX shares are in freefall.

Other than the gold shares, I think tech shares are promising in 2020. Tech shares have been leading the S&P 500 Index higher in the United States and we’ve seen similar on the ASX.

That could mean an ASX 200 tech share like Xero Limited (ASX: XRO) is in the buy zone.

Xero’s accounting software platform is in high demand right now as businesses look to keep a good handle on their finances.

That could mean Xero is a solid hedge with some upside potential in a share market crash.

Foolish takeaway

No one knows if and when another share market crash might occur. Newcrest, Xero and Coles shares are just a couple of the ASX 200 shares that could help to weather the storm in 2020.

However, panic buying and selling of shares also isn’t the answer.

It might be worth sticking to a long-term strategy and riding out the volatility over the coming decades.

More reading

• The Santos share price is down 36%! This is what I’d do today
• Is the Altium share price the steal of the century?
• Got $3,000? These 5 beaten-down ASX shares are begging to be bought
• 5 things to watch on the ASX 200 on Tuesday
• Why MOAT is my favourite ASX ETF

Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Xero. 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.

The post Coles shares and 2 other ASX 200 companies to buy in the current market appeared first on Motley Fool Australia.

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One area of the market which I think is home to a large number of promising companies is the mid cap space.

What is a mid cap? There are various opinions on how to categorise a mid cap share and it can change depending on which share market you are looking at.

On the Australian share market, I would class a mid cap share as a company with a market capitalisation in the range of $500 million to $5 billion. Anything less I would label a small cap and anything greater a large cap.

Why buy mid cap ASX shares?

I’m a fan of mid cap shares because I believe they offer investors the best of both worlds – greater potential returns than large caps, but less risk than small caps.

Luckily for investors, there are a large number of mid cap shares trading on the ASX which I believe offer compelling risk/rewards.

Two that I would buy are listed below:

Nearmap Ltd (ASX: NEA)

The first mid cap share to look at is this leading aerial imagery technology and location data company. Nearmap’s software gives businesses instant access to high resolution aerial imagery, city-scale 3D datasets, and integrated geospatial tools. This is proving very popular with end users as it allows them to conduct site visits from the safety of their own home or office. It also enables informed decisions, streamlined operations, and ultimately significant cost savings for businesses. Due to Nearmap’s high quality product offering and its sizeable opportunity in a fragmented market, I believe it has the potential to grow its sales at a very strong rate over the next decade.

Pushpay Holdings Group Ltd (ASX: PPH)

Another mid cap share which I rate highly is Pushpay. It is a donor management platform provider which has been growing at an explosive rate in recent years thanks to increasing demand for its platform in the church market. Although its shares have been on fire this year, I don’t for a second believe it is too late to invest. After all, Pushpay still has a very long runway for growth over the next decade. Management is aiming to capture a 50% share of the medium to large church market in the future. This represents a US$1 billion opportunity, which is many times its current revenue. Given the quality of its platform and a major recent acquisition which has bolstered its offering, I believe there is a high probability of the company achieving its target.

More reading

• $3,000 invested in these 2 shares could make you a fortune over the next 10 years
• The top ASX growth shares I would buy for the 2020s
• Sezzle shares and 2 other ASX techs soared up to 50% in the past 4 weeks
• These are the 10 most shorted ASX shares
• 3 five-star ASX shares I would buy today

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 Nearmap Ltd. and PUSHPAY FPO NZX. The Motley Fool Australia has recommended Nearmap Ltd. and PUSHPAY FPO NZX. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Why Nearmap and this ASX mid cap share could be strong buys appeared first on Motley Fool Australia.

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The Santos Ltd (ASX: STO) share price slumped 3.89% lower yesterday and is now down 36.6% in 2020. 

Given the S&P/ASX 200 Index (ASX: XJO) has only fallen 14.4% this year, could the Aussie oil and gas operator be in the buy zone?

Why the Santos share price has slumped lower

Santos is a leading independent oil and gas producer across the Asia-Pacific. It’s a consistent performer and is valued at $10.8 billion right now.

However, investors have been selling out of Santos shares in 2020. The coronavirus pandemic was the trigger but ASX oil shares have been hit particularly hard.

Demand for oil slumped as the travel and manufacturing industries shut down in February and March. That sparked an oil price war between OPEC+ and Russia which created a supply glut and sent the oil price plummeting lower.

While oil prices have started to stabilise, the Santos share price is still trading at a steep discount to where it started the year.

Shares don’t often fall for no reason, but there was a lot of market panic in February and March. That could mean the Aussie oil and gas producer is a cheap buy right now or could be set to fall further.

Is Santos a cheap ASX oil share to buy today?

I think any ASX oil share is a speculative buy right now. However, if I was going to be investing, I’d prefer to look at large-cap shares like Santos.

It might be worth considering if the Santos share price is cheap relative to competitors’ shares.

The Woodside Petroleum Limited (ASX: WPL) share price has fallen 39.9% this year. Woodside currently has a $19.7 billion market capitalisation, making it almost double the value of Santos.

However, if you’re looking for a pure-play oil and gas share, Santos could be a good option.

Foolish takeaway

The Santos share price could be volatile in the months ahead as oil prices continue to move. However, the Aussie oil and gas giant is trading at $5.19 per share and could be a cheap buy for investors looking to take some risks.

More reading

• Coles shares and 2 other ASX 200 companies to buy in the current market
• Is the Altium share price the steal of the century?
• Got $3,000? These 5 beaten-down ASX shares are begging to be bought
• 5 things to watch on the ASX 200 on Tuesday
• Why MOAT is my favourite ASX ETF

Motley Fool contributor Ken Hall 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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More reading

• Coles shares and 2 other ASX 200 companies to buy in the current market
• Why Nearmap and this ASX mid cap share could be strong buys
• The Santos share price is down 36%! This is what I’d do today
• Is the Altium share price the steal of the century?
• I think Aristocrat shares are outstanding value

The post Live Coverage of The Australian Share Market – 16 June 2020 appeared first on Motley Fool Australia.

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The Altium Limited (ASX: ALU) share price has slumped 6.7% lower in 2020 but is the Aussie tech company a steal at the current price of $32.41 per share?

Why the Altium share price could be a steal

Altium is a multinational software business that focuses on electronic design systems for 3D-printed circuit boards (PCBs). Altium is part of the ‘WAAAX’ group of tech shares which have been on a rollercoaster ride in 2020.

The recent bear market crushed the S&P/ASX 200 Index (ASX: XJO) before recovering in April and May. The Altium share price was no different, falling 38.1% in one month from 17 February to 17 March.

Altium is trading at $32.41 right now and would have been a steal at its 52-week low of $23.11. Clearly, the best time to buy was 5 years ago but the next best time could be today.

Altium’s value hasn’t surged higher in the way that Afterpay Ltd (ASX: APT) has in recent weeks. But not every ASX 200 share is Afterpay and that’s a tough benchmark to compete against.

The economy is starting to warm up again which is good news for Altium’s earnings.

Investors have been bullish on the Altium share price in recent weeks. Tech shares have been doing well on both the ASX 200 and overseas in the S&P 500 Index.

I think part of the appeal is the stable earnings that software as a service (SaaS) companies can generate. 

Altium has a strong development pipeline which is promising for the future. The group’s new cloud platform, Altium 365, could be the next step towards an integrated design platform for both supply chain and manufacturing.

If Altium can continue to capture more market share, the Altium share price could be a steal at its current $4.2 billion valuation.

Foolish takeaway

The Altium share price has recovered strongly since bottoming out in March. With a strong growth profile in the decades ahead, Altium could be the steal of the century if earnings continue to grow.

More reading

• Got $3,000? These 5 beaten-down ASX shares are begging to be bought
• 5 things to watch on the ASX 200 on Tuesday
• Why MOAT is my favourite ASX ETF
• Can ASX big banks generate an attractive sustainable dividend yield from FY21?
• ASX 200 falls 2%, ASX travel shares drop heavily

Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Altium. The Motley Fool Australia owns shares of AFTERPAY T FPO. 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 Altium share price the steal of the century? appeared first on Motley Fool Australia.

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I believe Aristocrat Leisure Limited (ASX: ALL) shares are one of this week’s great investing opportunities. The company provides systems, machinery and platforms for games of chance. It operates in many markets including the US and Asia. In addition, it has been announced it will be included in the S&P/ASX 20 (INDEXASX: XTL) from 22 June. 

For years I associated Aristocrat shares purely with poker machines. Although today their product and service offering now far exceeds that narrow revenue stream. I think Aristocrat shares are a very good buy at the current price, and the following 3 numbers are important for any would-be investor.

Sales growth rates

It is wise to analyse companies over a reasonable period of time, in most cases, this is between 5 – 10 years. Aristocrat has grown the company’s sales approximately 20% per year on average over a 10-year period. This means the company has developed new revenue streams and entered new markets while sustaining high levels of sales growth. It speaks volumes about its market knowledge and trust within the industry and gives me more confidence in Aristocrat shares. 

Return on equity

Return on equity (ROE) is also called return on net assets (RONA) because it is the net income of the company divided by its net assets. In other words, how effectively the company uses its assets to create profits. It is a good all-round indicator of the financial management of the company. 

Aristocrat has averaged an ROE of 28% over 10 years; an outstanding result in my view. In comparison, gigantic miner Rio Tinto Limited (ASX: RIO) is an asset-intensive company. It mines one of the world’s most profitable commodities. Yet Rio has a lower 10-year average ROE of 21.9.

Cash flow growth rate

Cash flow is the ability of a company to generate cash or cash equivalents. In my view, this is the most fundamental capability any company needs to generate value for investors. Free cash flow means a company can reinvest in itself, reduce future debt or return cash to investors via dividends.

Aristocrat has been able to grow its free cash at an average rate of 29.1% per year over 9 years. Understanding this helps to understand the company’s ability to drive the two figures.

Foolish takeaway

I think the coronavirus lockdown has presented investors with a unique chance to buy Aristocrat shares at a low entry price point. Today it is selling at a price-to-earnings ratio (P/E) of 9.9. This is more than 50% lower than its 10-year average P/E of 23. 

With good results in sales, ROE and cash flow, the company appears well managed. In addition, it will be in the ASX 20 on 22 June. I have a sneaking suspicion it is going to have better than expected full-year results due to increased online gambling. 

More reading

• Why the ASX 200 tumbled lower on Monday and 2 shares to buy
• 3 excellent ASX growth shares to invest $3,000 into right now
• 3 ASX shares to buy now with $10,000
• Can this ASX dividend share afford its 11% yield?
• How to turn $20,000 into $275,000 in 10 years with ASX 200 shares

Motley Fool contributor Daryl Mather 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 I think Aristocrat shares are outstanding value appeared first on Motley Fool Australia.

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There are a number of beaten-down ASX shares in the current market. After the S&P/ASX 200 Index (ASX: XJO) fell 2.2% yesterday, here are a few potential buys at their current prices.

5 beaten-down ASX shares that could be in the buy zone

There are a lot of big-name companies that shed billions in value during the recent bear market.

The Scentre Group (ASX: SCG) share price has slumped 42.6% lower this year. While big falls don’t usually occur without reason, quick declines can be an indication of a share being oversold.

Aussie real estate has a lot of question marks given the current restrictions. Scentre is a retail real estate investment trust (REIT) that has spooked investors in the current market.

The Woodside Petroleum Limited (ASX: WPL) share price has also been hit by the coronavirus pandemic. 

Oil prices fell through the floor as manufacturing and travel demand slumped lower. That’s bad news for Woodside’s earnings but easing restrictions could be good news for ASX oil shares in 2020.

The Woodside share price is down 39.9% in the year-to-date which could mean it’s back in the buy zone if a quick economic rebound is on the cards.

It’s not just retail and oil that have been hit hard. The Aussie banks have also been hit hard by the recent restrictions.

Westpac Banking Corp (ASX: WBC) shares are down 28.3% this year. The economic downturn has the potential to hit bank balance sheets and earnings hard in 2020 and 2021.

It’s a similar story for National Australia Bank Ltd (ASX: NAB) shares. NAB’s value is down 26.5% this year which is underperforming the ASX 200 benchmark index by 12.1%.

Finally, Telstra Corporation Ltd (ASX: TLS) is another blue-chip company that has slumped lower this year. Demand for the Aussie telco’s services has skyrocketed during the pandemic but investors are worried.

That could mean Telstra is a cheap buy right now but there’s definitely risk involved in buying underperforming shares in the current market.

Foolish takeaway

These are just 5 beaten-down ASX shares that could be in the buy zone right now. As always, take your own appetite for risk into account when investing in the share market. 

More reading

• Is the Altium share price the steal of the century?
• 5 things to watch on the ASX 200 on Tuesday
• Why MOAT is my favourite ASX ETF
• Can ASX big banks generate an attractive sustainable dividend yield from FY21?
• ASX 200 falls 2%, ASX travel shares drop heavily

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia has recommended Scentre 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 Got $3,000? These 5 beaten-down ASX shares are begging to be bought appeared first on Motley Fool Australia.

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