Author: therawinformant

Ask any ASX investor who are their go-to investing experts, and you will likely hear the same names pop up time and time again: Warren Buffett, Peter Lynch and Ray Dalio.

There’s no doubt all three of these investing experts have carved out hugely successful careers in investing. But each has done so in their own unique and distinctive way.

Often, the teachings of these experts will contradict each other. It can make following them a little confusing at times. So how does one manage to tread a path between these fonts of wisdom?

There’s no right answer with investing

The key thing to remember when it comes to investing is that there is no ‘right way’ to go about it. You can be a very successful growth investor, value investor or even speculator (although we Fools think this is more about luck than anything else).

Investing is also about finding the best practice that works for you.

Take Warren Buffett.

Buffett is known as the king of value investing because of his love of buying top-notch companies when they’re temporarily out of favour, or as he once put it “on the operating table”. Buffett only sticks to stocks and regularly disparages other assets like gold and bonds.

Peter Lynch was also a stock picker. He managed his phenomenal track record by uncovering growth companies that others hadn’t come across yet.

Lynch didn’t so much evaluate a company’s past to determine its future value (like Buffett), but rather whether people on the street were talking about it or using its products. In this way, he was able to find a winner and stick with it until the market eventually cottoned on too.

But hedge-fund titan Ray Dalio takes a very different approach to investing.

Dalio is a student of history and economics and loves using different asset classes like gold, bonds and shares to balance risk. He was able to do this so successfully (including through the GFC) that his hedge fund Bridgewater Associates is now the largest in the world.

How to learn from the investing experts

None of these investing experts have similar modus operandi, yet all have achieved resounding success with their investing.

The best way to draw inspiration from them is to first work out which kind of investor you’d like to be. Then you can better determine which of the investing legends’ lessons you can apply to help hone your investing skills.

If you’re a value investor, you could draw mostly from Buffett, maybe looking at beaten-down blue-chips like Coca-Cola Amatil Ltd (ASX: CCL).

But you’d also benefit from how Peter Lynch discovers a future winner, perhaps by looking at retail success stories like Premier Investments Limited (ASX: PMV).

If you like the kind of macro-investing Dalio favours, you can draw from him by investing in alternative asset classes to balance risk. Dalio likes asset ETFs like the ETFS Physical Gold ETF (ASX: GOLD) for example.

Meanwhile, you could also appreciate how Buffett waits for a great price to pay for a company Peter Lynch might have loved. You can always ‘cross-reference’.

Investing greatness isn’t mutually exclusive. There’s nothing stopping you from drawing inspiration from as many investing greats as you can find!

More reading

• 5 ASX 200 dividend shares for an economic recovery
• 3 industries that may never recover from COVID-19
• How this $70m ASX small cap is cutting down a $50bn industry
• Broker tips 10 ASX 200 shares for a post-coronavirus recovery
• Why I think Premier Investments is the best retail share on the ASX

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Premier Investments 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 Buffett? Lynch? Here are the investing experts you should take advice from when buying ASX shares appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2X8ScQ6

It has been an eventful day for the S&P/ASX 200 Index (ASX: XJO). After sinking lower in early trade, the benchmark index is trading roughly flat at 5,557.6 points at the time of writing.

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

The ALS Ltd (ASX: ALQ) share price is up almost 5% to $6.92. This appears to have been driven by a broker note out of Credit Suisse this morning. According to the note, the broker has upgraded the testing services company’s shares to an outperform rating with an $8.00 price target. It made the move ahead of its results release next week.

The Clover Corporation Limited (ASX: CLV) share price has jumped 12% to $2.51. Investors have been buying the infant formula ingredients company’s shares following the release of a positive trading update. Clover revealed that it has recently experienced a surge in demand and expects this to continue in the fourth quarter. Strong sales of infant formula products during the pandemic is driving the demand for ingredients.

The Computershare Limited (ASX: CPU) share price is up 4% to $12.66. This follows the release of an update by the share registry company after the market close on Tuesday. Computershare revealed that the majority of its businesses are operating resiliently during the pandemic. As such, it has reaffirmed its management earnings per share guidance of a 20% decline in FY 2020.

The EML Payments Ltd (ASX: EML) share price has rocketed 15% higher to $3.78. This morning the payments company released an update for the third quarter and April. Although it has been facing large headwinds, revenue and EBITDA were up 20% and 24% financial year to date at the end of March. The company also revealed that it made an operating profit during the month of April.

More reading

• ASX 200 down 0.2%: Big four banks lower and TPG announces demerger plans
• Why this ASX infant formula share is surging 14% higher today
• Why the EML Payments share price is rocketing over 12% higher today
• 5 things to watch on the ASX 200 on Wednesday
• 3 Warren Buffett ASX dividend shares to buy right now

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 Clover Limited and Emerchants Limited. The Motley Fool Australia has recommended Emerchants 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 ALS, Clover, Computershare, & EML Payments shares are storming higher appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3cYXWT2

The Alliance Aviation Services Ltd (ASX: AQZ) share price soared as much as 30.23% higher this morning on the back of a trading update. The company provided further insight into how the business is tracking in the wake of COVID-19 and re-established its FY20 earnings guidance.

About Alliance Aviation Services

Alliance provides contract, charter and allied aviation services across Australia to mining, energy, tourism and government sectors.

Its customer base includes S&P/ASX 200 Index (ASX: XJO) names like South32 Ltd (ASX: S32) and BHP Group Ltd (ASX: BHP).

The company owns a fleet of around 40 aircraft and completed 19,710 flying hours in the first half of FY20. 

What did Alliance announce?

This morning, Alliance revealed it has experienced a significant increase in demand for charter flights and expects to deliver its strongest charter revenue result in many years. The company attributed this uptick in demand to a combination of social distancing and a lack of available scheduled flights by other operators.

As a result, Alliance has welcomed a significant number of new resources sector clients and expects this level of charter revenue to continue through FY21.

Although travel restrictions have impacted inbound tourism contract revenue, Alliance has been able to capitalise on additional demand for flights in the resources sector. Implementing measures such as health screening of passengers, temperature checks, and specific seating plans, the company has actually increased its flight schedules of contracted clients.

In terms of its wet leasing division, Alliance has an agreement in place with Virgin Australia Holdings Ltd (ASX: VAH) to provide aircraft and crew and operate services on Virgin’s behalf. As Virgin is still in voluntary administration, this agreement remains suspended. Alliance noted it is not expecting any wet leasing activity for the remainder of FY20 and anticipates limited demand for these services in FY21.

FY20 outlook

By way of a trading update on 20 March 2020, Alliance outlined the impact of COVID-19 on its operations at the time and accordingly, suspended FY20 earnings guidance.

According to the company, now that the impact of COVID-19 has somewhat stabilised, it is in a position to provide earnings guidance for FY20. Alliance now expects to report full-year profit before tax in excess of $40 million. At the very least, a result of $40 million would represent 22% growth on the $32.8 million achieved in FY19.

More reading

• Why investing in these COVID-19 stricken ASX shares won’t be the same again for a very long time
• ASX 200 climbs 1% in positive start to the week
• Virgin narrows its shortlist down to 4 suitors
• 5 ASX 200 winners and 5 losers of the week
• Why Beach, CBA, Qantas, & Xero shares are dropping lower

Motley Fool contributor Cathryn Goh 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 Small-cap ASX aviation share soars 30% higher as it re-establishes earnings guidance appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3bHVsqN

The InvoCare Limited (ASX:IVC) share price has continued its recent upward trend this morning and is trading for $11.17, driven higher by the widespread gains of the S&P/ASX200 Index (ASX:XJO) more broadly.

At the time of writing, the funeral home operator is trading at a 25% discount compared to its pre-COVID-19 highs of $14.92 earlier this year.

Although some investors may view the funerals industry as a controversial addition to their portfolio, here are 3 reasons I believe the current InvoCare share price has significant potential to outperform in the medium to long-term:

Successful capital raising

On 14 April, InvoCare announced it would tap institutional investors for $150 million total equity in the company at a price of $10.40 per share. The company cited that the raising would “provide enhanced support for its growth initiatives and further strengthen its balance sheet.”

The next day, however, the company revealed that over-subscription of the placement by investors had prompted its expansion to $200 million. This 25% enlargement suggests that there was significant demand for InvoCare shares and may be considered a positive indication that investors see sizeable growth opportunities for the company moving forward.

Track record of strong financial performance

The widespread impacts of COVID-19 will inevitably disrupt the short-term business operations of companies such as InvoCare. Despite this, the company’s track-record of stellar financial performance should provide investors with optimism that it will survive the challenging contemporary economic environment.

In its FY19 annual report to shareholders, InvoCare saw sales revenue rise by 3.5% to approximately $490 million, operating earnings before interest, taxes, depreciation and amortisation (EBITDA) grew by 21.4%, and net profits substantially increased by a whopping 54% relative to FY18. These figures were accompanied by a fully franked dividend of 41 cents per share, thus representing an annual dividend yield of 2.9%.

Lastly, InvoCare’s FY19 report discussed the acquisition of several regional funeral facilities as part of its overall growth strategy, including the purchase of Heritage Funerals (QLD) and Batemans Bay & Moruya District Funerals (NSW). These businesses will likely add to the 30% of existing market share that InvoCare currently holds in the funeral home industry.

This robust financial performance in FY19, combined with InvoCare’s fruitful acquisitions strategy, provide considerable opportunities for investors to benefit from the long-term earnings growth and profitability of the company.

Ageing population

According to the Australian Institute of Health and Welfare, 15% of the Australian population was included in the 65 and over category as of 2017, with this proportion of older demographics expected to inflate to 8.7 million people (22%) by 2056. If this projection is accurate, InvoCare appears well-placed to benefit from an ageing population. In the FY19 annual report, InvoCare CEO Martin Earp summarised this current demographic trend by stating:

The populations in our core geographical markets of Australia, New Zealand and Singapore are growing and ageing, with the first wave of the so-called baby boomer generation now impacting on anticipated death volumes. This positive demand profile is forecast to continue for at least two more decades.

To effectively meet this additional demand for funeral services, the company has embarked on a $200 million refurbishment program known as ‘Protect & Grow’. As of April 2020, 106 locations had undergone various improvements, and a further 74 sites are expected to benefit from renovations in FY20. Of particular interest, the Protect & Grow venture has seen mixed responses from shareholders, perhaps owing to their concerns that the up-front debt is weighing down the company balance sheet. This has arguably kept the share price lower in recent months.

However, I believe that this investment in the company’s infrastructure should be viewed positively by investors. InvoCare has recognised the long-term demand opportunities an ageing population provides, and is adapting accordingly to distribute the ensuing profitability of this demographic shift to its shareholders.

Foolish takeaway  

Fresh off its over-subscribed capital raise, I believe InvoCare is well-placed to emerge from the COVID-19 pandemic in a position of strength. The company has a significant portion of market share in a growing industry and has demonstrated a desire to further expand in the coming years through acquisitions and internal investment via the Protect & Grow strategy.

Although this company may be a buy-and-hold for the medium to long-term, I believe there is significant upside for prospective investors to include InvoCare shares in their portfolio.

More reading

• ASX 200 down 0.2%: Big four banks lower and TPG announces demerger plans
• Positive signs for Australia’s jobs market as ABS data points to a recovery
• Is the Newcrest Mining share price in the buy zone?
• Are ASX bank shares worth buying despite dividend cuts?
• 5 things to watch on the ASX 200 on Wednesday

Motley Fool contributor Toby Thomas owns shares of InvoCare Limited. The Motley Fool Australia has recommended InvoCare 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 this ASX funeral share is well positioned for future growth appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3bHTpTD

At lunch on Wednesday the S&P/ASX 200 Index (ASX: XJO) is off its lows for the day, but still trading slightly lower. The benchmark index is down 0.2% to 5,547.8 points.

Here’s what is happening on the market today:

Big four banks tumble.

The big four banks have given back some of yesterday’s strong gains and are acting as a drag on the ASX 200 on Wednesday. The worst performer in the group today is the Westpac Banking Corp (ASX: WBC) share price with a decline of 0.5%.

Sydney Airport update

The Sydney Airport Holdings Pty Ltd (ASX: SYD) share price is trading a fraction higher at lunch after the release of its April update. The airport operator revealed that Domestic passengers fell 97.9% and International passengers fell 96.9% in April. Management warned that the downturn in passenger traffic is expected to persist until government travel restrictions are eased.

TPG share price higher on update.

The TPG Telecom Ltd (ASX: TPM) share price is storming higher today after revealing its future business plans. Following FIRB approval for its merger with Vodafone Australia, the company has revealed that it intends to demerge its Singapore business. It will then be listed on the ASX has a separate entity. TPG also revealed plans to pay a fully franked cash special dividend.

Best and worst ASX 200 performers.

The EML Payments Ltd (ASX: EML) share price is the best performer on the ASX 200 on Wednesday with a 13% gain. This follows the release of a business update this morning which impressed investors. The worst performer is the Unibail-Rodamco-Westfield (ASX: URW) share price with a 5% decline. Investors continue to sell the shopping centre operator’s shares due to the headwinds it is facing from the pandemic.

More reading

• Positive signs for Australia’s jobs market as ABS data points to a recovery
• Why the EML Payments share price is rocketing over 12% higher today
• Why investing in these COVID-19 stricken ASX shares won’t be the same again for a very long time
• Is the Newcrest Mining share price in the buy zone?
• Are ASX bank shares worth buying despite dividend cuts?

James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Emerchants Limited. The Motley Fool Australia has recommended Emerchants 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 ASX 200 down 0.2%: Big four banks lower and TPG announces demerger plans appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3cOomaj

There are some positive signs for Australia’s jobs market as new data from the Australian Bureau of Statistics (ABS) reveals a slowdown in COVID-19 job losses.

The ABS has been collecting payroll and wages data in Australia as part of its effort to shed some light on the impact of COVID-19 on people and businesses across the country.

What the numbers say

According to the ABS, total payroll jobs fell by 7.3% between 14 March 2020 and 2 May 2020. In the same period, total wages paid decreased by 5.4% compared to an 8.2% drop in the ABS’ previous report, largely propped up by the JobKeeper payment. 

According to March unemployment data, some 13 million Australians were employed in mid-March. So, this reported 7.3% fall equates to around 950,000 job losses over the 7-week period.

The hardest-hit states were Victoria and New South Wales, where falls in job numbers were around 8.4% and 7.7%, respectively, over the 7-week period. In terms of wages, Western Australian fared the worst with a 7% fall in total wages, while Victoria wasn’t far behind with a 6.7% decrease.

At an industry level, the accommodation and food services industry had lost around a third of payroll jobs by the week ending 11 April. A subsequent increase in jobs saw this reduce to around 27.1% by the week ending 2 May.

Similar improvement has been seen in the arts and recreation services industry, where a previous fall of 27% is now a (still significant) 19% slump.

Tentative signs of improvement

Commenting on this new data, Bjorn Jarvis, Head of Labour Statistics at the ABS, said: “The latest data shows a further slowing in the fall in COVID-19 job losses between mid-April and early May.”

“The week-to-week changes are much smaller than they were early in the COVID-19 period. The decrease in the number of jobs in the week ending 2 May was 1.1 per cent, which was only slightly larger than the 0.9 per cent increase in the week ending 25 April,” Mr Jarvis added.

What does this mean for ASX shares?

Over this 7-week period, the S&P/ASX 200 Index (ASX: XJO) initially fell to a bottom on 23 March before emerging out of its bear market and marching higher (albeit with many bumps along the way):

The ASX 200 has continued to climb in the interim, just yesterday jumping 1.81% to close at 5,560 points, buoyed by COVID-19 vaccine hopes.

As the economy wakes from hibernation, the effects of COVID-19 and the associated restrictions will begin to emerge through data points like the ones mentioned above. Generally speaking, the share market reflects the conditions of local and global economies – or at least perceived conditions and sentiment – for which employment and wages certainly play a part.

More reading

• ASX 200 down 0.2%: Big four banks lower and TPG announces demerger plans
• Is the Newcrest Mining share price in the buy zone?
• Are ASX bank shares worth buying despite dividend cuts?
• 5 things to watch on the ASX 200 on Wednesday
• Top brokers pick the latest ASX stocks to buy today

Motley Fool contributor Cathryn Goh 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 Positive signs for Australia’s jobs market as ABS data points to a recovery appeared first on Motley Fool Australia.

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

The S&P/ASX 200 Index (ASX: XJO) is on course to end its winning streak on Wednesday. In late morning trade the benchmark index is down 0.3% to 5,543.3 points.

Four shares that are falling more than most today are listed below. Here’s why they are sinking lower:

The AP Eagers Ltd (ASX: APE) share price is down 3% to $5.44. The catalyst for this decline appears to have been a broker note out of Credit Suisse. According to the note, the broker has downgraded AP Eagers’ shares to a neutral rating and cut the price target on them to $6.45. The broker made the move on valuation grounds after a strong recovery in its share price over the last couple of months. It also expects a sharp decline in profits this year.

The Lendlease Group (ASX: LLC) share price has fallen 3.5% to $11.26. This decline also appears to have been driven by a broker note. Although analysts at Ord Minnett have retained their buy rating on the property company’s shares, they have cut their price target down by a third to $14.00. Ord Minnett believes the next 12 months could be difficult, but the longer term looks positive.

The Pushpay Holdings Ltd (ASX: PPH) share price has dropped almost 2.5% to $6.65. This appears to have been driven by profit taking after the donor management platform provider’s shares rocketed to a record high this week. Investors have been buying Pushpay’s shares following the release of a strong full year result earlier this month.

The ResMed Inc. (ASX: RMD) share price is down 2% to $24.84. This follows a similar pullback in the medical device company’s U.S. listed shares overnight. Investors may be concerned that demand for its ventilators will decline if a COVID-19 vaccine is successfully developed in the coming months.

More reading

• Why these ASX shares have just stormed to record highs
• 3 fantastic ASX shares to buy now to get rich later
• 3 ASX 200 healthcare shares I’d buy today
• Where to invest $500 in ASX shares right now
• Will these ASX car dealers bounce back after COVID-19?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended PUSHPAY FPO NZX. The Motley Fool Australia has recommended 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 Why AP Eagers, Lendlease, Pushpay, & ResMed shares are sinking lower appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/36dUtxD

Key ASX shares in the wine and dairy sector could be in the firing line as trade tensions look to escalate between Australia and China. A recent article from Bloomberg reports that China is considering targeting more Australian exports, following calls into an independent inquiry into the coronavirus pandemic.

Here are the latest developments on trade tensions and the key stocks that could be impacted.

Escalating trade tensions

According to the article, China is considering enforcing further trade barriers and tariffs on Australian imports, including wine and dairy products. The article states that Chinese officials have listed potential goods from Australia that could be subject to stricter quality checks and tariffs. It is also possible that China could encourage a consumer boycott of Australian products, however a formal stance has not been acknowledged.  

The speculation of further economic retaliation follows China’s action to block meat imports from 4 Australian slaughterhouses and the enforcement of an 80% tariff on Australian barley on Monday. Calls by the Australian Government for an independent inquiry into the coronavirus pandemic are thought to have fuelled economic retaliation from the Chinese government.

Which ASX shares are in the firing line?

A2 Milk Company Ltd (ASX: A2M) is one of the few shares on the ASX that has managed to withstand the turmoil caused by the coronavirus pandemic. Despite the company’s resilience thus far, sanctions and trade restrictions on its products to China could cause major damage.

The infant formula company relies heavily on consumer demand from China to fuel revenue growth. Currently, a2 Milk reports it has a 6.4% share in the lucrative infant formula market in China and the company recently spent NZ$200 million of its marketing budget on ads in China.

Treasury Wine Estates Ltd (ASX:TWE) is another company with heavy exposure to China. Australia is the 5th largest exporter of wine in the world, with China accounting for the majority of the volume. The operations of Treasury Wine reflects the wine industry’s reliance on China, with the company generating more than 40% of its total profits from Asia. The company’s prestigious and luxury brands, such as Penfolds, are highly popular in the Chinese market and offer better profitability margins.

Foolish takeaway

China is Australia’s most important trading partner – Chinese consumers and businesses are a reliable source of demand for many Australian goods and services. As China emerges from the coronavirus pandemic, demand will play an important role in the recovery of Australia’s economy.

More reading

• 3 stellar ASX growth shares to buy right now
• Where to invest $10,000 into ASX shares
• ASX shares can help millennials retire before their parents
• Are these China-exposed ASX shares in danger in 2020?
• 3 top ASX shares to buy now and hold for 10 years

Motley Fool contributor Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Treasury Wine Estates Limited. The Motley Fool Australia owns shares of A2 Milk. 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 2 ASX shares in the firing line of trade tensions with China appeared first on Motley Fool Australia.

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