Author: therawinformant

Interest rates are at ultra-low levels and look likely to remain that way for the foreseeable future.

As a result, I continue to believe investors would be better off putting any excess funds into the share market rather than leaving them to gather paltry interest in an account.

But where should you invest these funds? Here are three top shares I would invest $5,000 into right now:

Freedom Foods Group Ltd (ASX: FNP)

I think Freedom Foods could be worth considering for that $5,000 investment. It is a growing diversified food company with a focus on healthy eating trends. The company has been investing heavily in its future growth over the last few years and looks set to reap the rewards in the coming years. Especially given its significant lactoferrin and UHT production capacity and the insatiable demand for these products in Asia. Combined with the rest of its growing business, I believe Freedom Foods is well-positioned to grow its earnings at a strong rate over the next decade.

NEXTDC Ltd (ASX: NXT)

Another share that I would invest $5,000 into is NEXTDC. It is Asia’s most innovative Data Centre-as-a-Service provider and busy building the infrastructure platform for the digital economy. I believe this leaves NEXTDC in a very strong position to benefit from the accelerating adoption of cloud computing. This is because as cloud computing usage increases, demand for its data centre outsourcing solutions and connectivity services is likely to increase along with it. This year the company has seen a big lift in demand. So much so, it recently announced plans to build a new data centre in Sydney.

Pro Medicus Limited (ASX: PME)

Another option to consider investing $5,000 into is Pro Medicus. It is a leading provider of a full range of radiology IT software and services to hospitals, imaging centres, and healthcare groups globally. The key product in its portfolio is Visage 7. Pro Medicus’ Visage 7 technology delivers fast, multi-dimensional images streamed via an intelligent thin-client viewer. It offers users robust clinical capabilities and scales to the needs of massive organisations. Demand has been very strong over recent years, leading to strong sales and profit growth. For example, during the first half of FY 2020, Pro Medicus reported a 32.7% increase in net profit after tax to $12.1 million. Although the pandemic is likely to stifle its growth in the second half, I remain confident that its long-term potential is enormous.

More reading

• These ASX tech shares could be destined for big things thanks to cloud computing
• These ASX 200 shares are up over 40% in 2020
• Why I would buy these exciting ASX growth shares right now
• Why a buy and hold strategy for ASX shares is best
• Should you invest in super or your ASX share portfolio?

James Mickleboro owns shares of NEXTDC Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Pro Medicus Ltd. The Motley Fool Australia owns shares of and has recommended Pro Medicus Ltd. The Motley Fool Australia has recommended Freedom Foods Group 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 Where I would invest $5,000 into ASX shares immediately appeared first on Motley Fool Australia.

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Alternative ASX dividend shares could be a great way to boost your income during these times.

Popular ASX dividend shares like National Australia Bank Ltd (ASX: NAB), Sydney Airport Holdings Pty Ltd (ASX: SYD) and Transurban Group (ASX: TCL) have disappointed shareholders because of the coronavirus.

But alternative ASX dividend shares could be the answer. Here are three very interesting ideas:

Vitalharvest Freehold Trust (ASX: VTH)

This is an agricultural real estate investment trust (REIT) which owns berry and citrus farms in Australia. It earns fixed rental income and variable rental income from Costa Group Holdings Ltd (ASX: CGC), its tenant.

The variable rental income is a share of profit from the farms, which is an interesting time to be able to get some of the profit considering food prices are rising.

Each year Vitalharvest will pay out most (or all) of its net rental profit. The last 12 months amounts to a trailing distribution yield of 6.7%. A solid yield from the alternative ASX dividend share. The last year includes a lot of disruption, so the next 12 months could be materially better.

Duxton Water Ltd (ASX: D2O)

The water entitlement business is definitely one of those investments that could count as an alternative ASX dividend share. It’s the only share on the ASX that purely owns water entitlements.

It leases the water to farmers to ensure they get the water they need for their operations. Some of it is leased with multi-year leases, which locks in attractive water income for Duxton Water, providing good visibility.

It’s these leases that have given the Duxton Water Board the confidence to forecast that dividends can grow over the next two years with an increase every six months.

Based on the next 12 months of projected dividends, it currently has a forward grossed-up dividend yield of 6.1%.

Rural Funds Group (ASX: RFF)

Farmland is a very different asset class compared to most other investments on the ASX. Rural Funds is the biggest agricultural REIT on the ASX. It has a diverse property portfolio including cattle, almonds, vineyards, macadamias and cotton.

One of the most attractive things about Rural Funds as an alternative ASX dividend share is that it aims to increase its distribution by 4% each year. This is possible thanks to the contracted rental indexation, regular productivity investments and the occasional accretive acquisition.

Rural Funds has forecast another increase for FY21. It offers a forward distribution yield of 6%.

Which alternative ASX dividend share to buy?

Vitalharvest is an interesting idea, it may prove to be the strongest performer over the next 12 months. But for consistent dividend growth I think Rural Funds and Duxton Water would be better buys today.

More reading

• 3 safe and strong ASX dividend shares to buy right now
• 2 ASX shares I plan to hold til I’m 100
• 3 Warren Buffett ASX dividend shares to buy right now
• 3 industries that may never recover from COVID-19
• Beat falling rates with these strong ASX dividend shares

Motley Fool contributor Tristan Harrison owns shares of COSTA GRP FPO, DUXTON FPO, and RURALFUNDS STAPLED. The Motley Fool Australia owns shares of and has recommended COSTA GRP FPO and RURALFUNDS STAPLED. The Motley Fool Australia owns shares of Transurban Group. The Motley Fool Australia has recommended DUXTON 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.

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Is there any price better than free?

I mean, seriously: Free!

Costless.

Gratis.

$0.

It has to be the best deal going around, right?

Right?

You’re onto me, aren’t you.

You know that there’s a ‘but’ coming.

A huge ‘but’.

Maybe not. Maybe…

Just kidding. You’re right. 

Free is good.

But!

Nothing is truly free. 

There’s always a catch. Or a cost. Or a trade-off.

Sure, Facebook is free. Except that in return you become the product that’s sold to advertisers. And preyed on by apps and advertisers who use what they know about you to mess with you. Exhibit A: Cambridge Analytica. Exhibit B: Targeted (fake) election ads.

Enough said.

Air is free, too. I mean, not clean air — just whatever air polluters choose to leave us with. But of course there’s a cost. You just can’t measure it, so we all, as a group, pretend it’s free to pollute. Some freedom.

And then there are free share trades.

Yet another brokerage mob is offering commission-free trades for Australians who want to trade on the US exchanges.

Free!

What could possibly go wrong?

Well, — and from here on, for the avoidance of doubt (and to placate any lawyers reading), I’m talking generically, and not about any particular current or future broker! — there’s the not-free stuff:

Like inactivity fees.

Or withdrawal fees.

There’s the often-unknown-or-hidden cost of converting your Aussie dollars to greenbacks.

What happens to your email address?

What will you be cross-sold?

Do you have to pay a subscription fee?

What interest will you lose out on by holding your cash with that broker?

Are you covered by CHESS (on the ASX) or the insurance scheme run by SIPC (in the US)?

Free isn’t quite so ‘free’ any more, is it?

Now, I’m not saying the trade-off mightn’t be worth it.

For all I know it’s still a stonking great deal.

Or maybe it’s not.

See, our brains go into meltdown when ‘free’ is mentioned.

If you don’t believe me, consider the foreign exchange mob (I can’t remember who, and I didn’t bother Googling) that markets its services as ‘no commission’.

See if you can get there before me… how could they possibly do it without fees?

Yep, by giving an inferior exchange rate. 

They’re 100% right that no fees are charged, but would you rather:

1. Pay no fees, and get $620 for your $1,000; or 

2. Get $650 for your $1,000 and pay a $10 fee for the privilege?

(Hint, if you answered #1, I have a bridge I’d like to sell you)

And if you reckon no-one would fall for such a deal, ask yourself why the FX dealer uses that pricing mechanic (and marketing strategy).

It’s not quite ‘bait and switch’, but it’s a pretty good case of misdirection, huh?

Want another example? 

I haven’t seen the ad recently, but one Big 4 bank was advertising a ‘cashback’ home loan a while back. All you had to do is sign up to their loan, and they’d throw you a few gorillas ($3,000 from memory) for the deal.

Tempted? Of course you are.

I dare say it was a pretty effective campaign.

I also bet — I’d almost guarantee — that loan had a relatively unattractive interest rate.

It’s almost certainly a dumb financial decision — get a few grand now, pay much, much more over the life of the loan.

But people did it, because our brains short-circuit really quickly on this stuff.

(If they didn’t, the Big 4 Bank and the foreign exchange company wouldn’t waste their time and money on these types of products or marketing campaigns!)

So, when someone offers you something for free, it pays to wonder why — what’s in it for them?

Again, it’s not necessarily a bad thing… but unless you know what the deal is, you’re bringing a knife to a gunfight.

And you know what? That mightn’t even be the worst of it.

Because you know what else free brokerage does?

It lowers the barriers to action… removing what economists call ‘friction’.

When you had to pay $150 to buy or sell shares, it required two things. You needed to save more money (assisting and rewarding discipline) and you needed to trade less frequently (because buying, then selling and buying something else cost $450!)

You had to be thoughtful. Careful. Diligent. Slow. 

Now?

Average holding periods have fallen precipitously. And that was before zero-dollar brokerage exploded in the USA.

If it’s costless (or close enough), then where’s the friction? Where’s the mental handbrake? Where’s the ‘Maybe I’ll think about this for a bit’ response?

Gone? Just about, yeah.

Why not buy today, sell tomorrow morning, buy something else at lunch and then sell it before the end of the day?

Why stop and think? Why be long-term when there’s just no need to.

It’s free!

Or is it?

My old man used to say ‘you get what you pay for, and you pay for what you get’. 

That’s not always true, of course, but it’s a good yardstick.

The other truism is that we value more highly that which we pay for, compared to that we get for free.

Don’t get me wrong — in general, I’m all for lower cost for investors, across the board, including fees paid to fund managers and financial planners.

But remember the examples, above.

Just because the transaction is free, doesn’t mean it doesn’t cost you anything.

For investors, the hidden costs might be the most insidious of all. The temptation to day-trade. To sell on a whim, and buy on another whim. To forget all about the value of ‘long term, buy to hold’ investing, and, hell, just break loose!

And lest you think this is only about brokerage (and I’d be happy if I’ve made you think twice), it’s only partly about that.

Mostly, it’s about the one thing that even those who accept the premise tend to underrate: the overwhelming importance of behavioural psychology.

And, for investors, behavioural finance.

A good stock pick will make you money once. Learning the principles of a good investment will make you money many times. But a thorough and increasingly instinctive understanding of behavioural finance will pay off more times in your life than you can possibly imagine.

That’s the lesson I want you to take from this, to become a better investor (and manager of your own money) by understanding how our brains instinctively work.

Then taking control, and making better decisions.

Fool on!

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
• Why AP Eagers, Lendlease, Pushpay, & ResMed shares are sinking lower
• 2 ASX shares in the firing line of trade tensions with China
• Where I would invest $5,000 into ASX shares immediately

Motley Fool contributor Scott Phillips 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 Just because it’s free, doesn’t mean it won’t cost you appeared first on Motley Fool Australia.

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It has been a very positive day of trade for the Clover Corporation Limited (ASX: CLV) share price.

This morning the infant formula ingredients producer’s shares stormed as much as 14% higher to $2.55.

Why did the Clover share price storm higher today?

The catalyst for today’s strong share price gain has been a trading update which revealed that it has recently experienced a surge in demand.

Since the release of its half year results at the end of March, Clover has benefited from strong demand from customers globally. Pleasingly, the company is anticipating a further increase in the fourth quarter from infant formula manufacturers.

This news won’t be surprising for followers of A2 Milk Company Ltd (ASX: A2M) and Bubs Australia Ltd (ASX: BUB). They have both revealed exceptionally strong growth during the pandemic.

Demand is above expectations.

Management notes that this forecast demand is above expectations and is primarily being driven by the market’s reaction to COVID-19. It believes consumers are buying additional infant formula products, which has depleted the pipeline fill into distribution warehouses and retail outlets. It feels this will also have been exacerbated by company and country isolation activities.

Another positive is that the company is benefiting from the depreciation of the Australian dollar. This is because the majority of its sales are transacted in U.S. dollars.

And while it does also make purchases in U.S. dollar, its inventory position at the end of the half year was particularly strong. This has reduced the need to purchase large volumes of oils and should lead to an increase in its gross margins.

Outlook.

Management has warned that it is too early to judge how long this heightened demand will be sustained. It also notes that several positive influences, such as COVID-19 demand and favourable currency movements, are likely to be one-off events.

Nevertheless, it expects a stronger than expected second half performance. This assumes forecast demand results in fulfilled orders and the global situation remains in the current state.

More reading

• 3 Warren Buffett ASX dividend shares to buy right now
• These mid cap ASX shares could grow into large caps in the future
• Where I’d invest $1,000 into ASX shares right now
• 2 ASX shares that every investor should own
• 2 ASX shares to hold forever

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 BUBS AUST FPO and Clover Limited. The Motley Fool Australia owns shares of A2 Milk. The Motley Fool Australia has recommended BUBS AUST 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 Why this ASX infant formula share is surging 14% higher today appeared first on Motley Fool Australia.

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The S&P/ASX 200 Index (ASX: XJO) may be tumbling lower today, but that hasn’t stopped the EML Payments Ltd (ASX: EML) share price from racing higher.

At the time of writing the payments company’s shares are up over 12% to $3.70.

Why is the EML Payments share price racing higher today?

Investors have been buying EML Payments’ shares on Wednesday after the release of a trading update.

According to the release, the company remains on course to deliver a solid full year result in FY 2020 despite the pandemic.

Although it experienced a deterioration in its Retail Malls segment in March, revenue for the nine months ending March 31 was up 20% on the prior corresponding period to $87.1 million.

And thanks partly to an expansion in its gross profit margin from 73.7% to 75.9%, the company’s EBITDA grew at the quicker rate of 24% over the nine months to $27 million.

Operating cash flow over the period was strong at $27.3 million. This represents an EBITDA conversion rate of 101%. This was due partly to breakage receipts from gift cards sold in prior years.

April update.

Although the Retail Malls segment continued to struggle in April because of mall closures, the company’s Salary Packaging business and its online gaming vertical performed strongly.

This has led to unaudited group EBITDA of $2.7 million during the month of April, inclusive of its PFS acquisition which was consolidated on April 1.

Management appears confident that it is onwards and upwards from here. It commented: “We expect to see a gradual opening of malls in various countries during May and June 2020 onwards which should represent an improvement to the trading conditions experienced in April 2020.”

Though, if trading conditions took longer than expected to improve, the company is exceptionally well-positioned to weather the storm.

At the end of April EML Payments had in excess of $125 million in cash. It also expects further breakage on gift cards sold 12 months ago to bolster its cash flows.

Management explained: “EML will continue to generate operating cash inflows from breakage on gift cards sold 12 months ago as the contract asset of $36.8M converts to operating cash inflows. Approximately 75% of the contract asset will be released into operating cash within 12 months. EMLs’ contract asset derives from breakage on approx. 11M gift cards previously sold reflecting individually small amounts per card which gives us a reasonable expectation that breakage rates will remain consistent with prior trends.”

Director sales.

The company also advised that its chairman, Peter Martin, intends to sell between 300,000 and 400,000 shares in the coming days or weeks.

Mr Martin is a long-term investor in EML, having acquired his initial stake in 2012. He now holds 7,718,992 fully paid ordinary shares, which means this is only a small portion of his holding he is selling.

The company explained that given his stage of life, family and other needs, he is likely to sell some shares each year.

More reading

• These were the top 10 ASX 200 shares over the last year
• These ASX shares booked the biggest gains last week
• ASX 200 Weekly Wrap: New ASX bull run continues
• 3 ASX 200 shares to buy before the market rebounds
• These were the best performing ASX 200 shares last week

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 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 the EML Payments share price is rocketing over 12% higher today appeared first on Motley Fool Australia.

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It’s not the 98% plunge in traffic through Australia’s once-bustling airport that will be keeping shareholders in Sydney Airport Holdings Pty Ltd (ASX: SYD) on edge.

It’s the battle between state premiers on boarder restrictions that will be a bigger sentiment driver for the airport as investors grapple with the fact that the company’s income isn’t as diversified as management claims it to be.

I’ll explain more of this later.

Clipped wings

The near-total freeze on domestic and international air travel due to the COVID-19 pandemic meant that only 92,000 passengers moved through Sydney Airport in April this year.

In contrast, 3.7 million flowed through its terminals during the same month in 2019.

Of the total numbers last month, 49,000 were domestic travellers, representing a 98% drop from April 2019.

Caught in the crossfire

The pressure is building on state premiers to allow Australian visitors from beyond their borders to return. This could happen in June although Queensland is the holdout.

Businesses and the federal government are pressuring Queensland Premier Annastacia Palaszczuk. She’s warning against restarting the tourism industry while our two most populous states of Victoria and New South Wales continue to report cases of community transmission, reported the Australian Financial Review.

The sunshine state indicated it may not welcome travellers from the southern states until at least September.

Meanwhile, NSW will allow its residents to holiday anywhere within the state from June 1, although that isn’t going to help Sydney airport or airlines like Qantas Airways Limited (ASX: QAN).

“New normal” for travel stocks

The airlines have flagged their own “new normal” for when services eventually resume. As a safety precaution, Qantas and Virgin Australia Holdings Limited will issue masks to passengers but won’t make wearing them compulsory.

The airlines will also stagger boarding and disembarkation (sounds like more bad news for cattle class passengers!), do more cleaning and have hand sanitisers in readily accessible places.

What they won’t do is leave empty seats for social distancing as Qantas’ boss Alan Joyce warned this will force ticket prices to surge nine-fold.

“L” not “V” shape recovery

It will be a long time before things go back to anything resembling pre-coronavirus, especially for Sydney Airport.

I am not even talking about the return of international travellers either as that will take many more months through a multi-stage comeback.

Eggs in different baskets but same trolley

Airport management boasted about its diverse income streams during its February results. Passenger traffic was flat but underlying earnings before interest tax depreciation and amortisation (EBITDA) jumped 4%.

This was due to rents it collects from retail, hotel and car hire companies. But even as domestic traveller return, the airport may have to contend with a second battle front.

Retailers are gearing up for a bitter fight with shopping centre landlords and structural change is in the air!

If retailers manage to secure significantly lower rents and change how mega malls charge for space, as I suspect, then I believe tenants at the airport will expect a similar treatment.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• ASX 200 climbs 1% in positive start to the week
• 2 high yield ASX dividend shares to buy for 2021
• 3 industries that may never recover from COVID-19
• Virgin narrows its shortlist down to 4 suitors

Motley Fool contributor Brendon Lau 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 Why investing in these COVID-19 stricken ASX shares won’t be the same again for a very long time appeared first on Motley Fool Australia.

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If you’re looking for market-beating returns over the long term, then I think the healthcare sector is a great place to start.

This is because there are a number of quality options in the space which look well-placed for strong long term growth thanks to favourable sector tailwinds and their leading products.

Three ASX healthcare shares I would buy and hold are listed below:

CSL Limited (ASX: CSL)

CSL is a biotherapeutics company which I think would be a great long term investment. It is made up of two businesses – CSL Behring and Seqirus. CSL Behring is the global leader in plasma therapies and Seqirus is the second largest influenza vaccines company globally. I believe both businesses are well-positioned for growth over the next decade thanks to their leading products and burgeoning research and development pipelines. Combined, I expect CSL to deliver solid earnings growth for the foreseeable future.

Nanosonics Ltd (ASX: NAN)

Another healthcare share to consider with a long term view is Nanosonics. I’m a big for the infection control specialist due to its trophon EPR disinfection system for ultrasound probes and its upcoming product launches. While not a lot is known about these new products, management notes that they have similar market opportunities to the trophon EPR system. If they are anywhere near as successful, they could underpin strong earnings growth for a long time to come.

Ramsay Health Care Limited (ASX: RHC)

Times have been hard for Ramsay Health Care and things are unlikely to get easier in the immediate term. However, the market already understands this and has priced this into its shares. In light of this, I think now could be an opportune time to make a long term investment. After all, Ramsay’s long term outlook looks very positive due to increasing demand for its services globally because of ageing populations and increasing chronic disease burden. In addition to this, I suspect the company could bolster its growth with further acquisitions in the future. All in all, I expect its shares to be market beaters over the next decade or two.

More reading

• 3 ASX 200 blue chip shares I would buy today
• If you invested $10,000 in the Ramsay Health Care IPO, this is how much you’d have now
• How you can get very rich with ASX 200 shares
• How to invest $10,000 in ASX 200 shares today
• Should ASX investors just buy ETF index funds for better returns?

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. and Nanosonics Limited. The Motley Fool Australia has recommended Nanosonics Limited and Ramsay Health Care Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The crude oil price has risen by 30% since last Monday, 11 May. The easing of restrictions across large swathes of the world has raised hope of gradual increases in demand. Chinese oil demand, in particular, has risen to pre-pandemic levels. 

Moreover, the Saudi Arabia-Russia crude oil price feud has come to an end. Add to this the positive news related to a potential COVID-19 vaccine and oil and gas investors believe they can breathe freely again.

The damage has been done, however. On Monday, the US Energy Information Administration stated that US shale oil production would drop by record levels in June. Well economics and the continuing ravages of the coronavirus continue to batter the industry. While this is unfortunate for US shale oil producers, it will likely drive further short-term rises in the crude oil price on futures contracts.

Who stands to gain?

The Santos Ltd (ASX: STO) share price has already jumped by 11% this week since Monday. At present, Santos’ price-to-earnings ratio (P/E) is still at 10.26. I believe this is still a reasonable ratio given the company is very well managed. It has a strong LNG hedge and is targeting break-even cash costs of less than the current crude oil price. 

The Origin Energy Ltd (ASX: ORG) share price has had an upward burst of 5% since Monday. Origin recently announced a strategic move to structurally lower operating costs. It also has a $100 million additional cost out program in place and has defensive qualities as Australia’s largest gas retailer. At a P/E of 9.84, this is 6 points below its 10-year average.

As with Origin, the Woodside Petroleum Limited (ASX: WPL) share price has jumped up 6% since Monday. The largest of the 3, Woodside has a current P/E of 39.53 reflecting the company’s forward growth plans. This is lower than the company’s 10-year average P/E. However, it doesn’t matter so much with Woodside. The market clearly sees this company as a growth opportunity.

In truth, Australia owes a debt of gratitude to the Woodside management teams over the past 2 decades in particular. After inventing the LNG industry in Australia, this company is the driving reason why our country has become the world leader in LNG production in January of this year. 

Foolish takeaway

While oil price futures have started to rebound significantly, this is somewhat divorced from the reality of the physical oil market. The world still has a glut of oil. Moreover, the US is still far from pre-pandemic activity.

Since March, trying to forecast market trends is a fool’s errand. Nonetheless, positive sentiment within the market is likely to continue the crude oil price rise at least over the remainder of May, possibly into early June. Even so, of the 3 major energy ASX shares I favour Santos. It benefits directly from a higher oil price; far more than Woodside or Origin. 

More reading

• 5 things to watch on the ASX 200 on Wednesday
• Should you invest $1,000 in Woodside Petroleum shares?
• 5 things to watch on the ASX 200 on Tuesday
• 3 ASX 200 shares to watch this week
• Why Aristocrat Leisure, Newcrest, Santos, & Zip Co shares are charging higher

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 3 ASX 200 energy shares to buy before crude oil price rises appeared first on Motley Fool Australia.

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