Category: Stock Market

I think this year is a good time to invest $1,000 into ASX shares. It’s good to invest during times of uncertainty because share prices are usually lower.

The most important thing to help investment returns, apart from picking a good choice, is the price you pay when you invest.

Here are three ASX shares that I’d invest $1,000 into right now:

Share 1: Bubs Australia Ltd (ASX: BUB)

Bubs could be a future star of the ASX in my opinion. It’s an infant formula business that specialises in goat milk products, but it has also recently launched a (cow) grass-fed organic range of infant formula which could also prove popular. The company continues to increase its distribution footprint. 

In the quarter to 31 March 2020, infant formula revenue rose 137% compared to the prior corresponding period and represented 58% of that quarter’s gross sales. I’m not expecting revenue to keep doubling every single quarter for many years, but I think Bubs has a long growth runway considering it’s starting from a small base. 

One of the key features I look for in exciting ASX shares is the desire to expand internationally. Australia is a great country, but Asia (and beyond) offers a much larger total addressable market. That is exactly where Bubs is targeting. Chinese revenue rose by 104% in the three months to 31 March 2020 and ‘other market’ revenue rose almost 20 times compared to the prior corresponding period and represented 12% of gross sales in the quarter.

Unless something goes quite wrong, like a collapse in relations with China, I think the Bubs share price has a lot of growth potential over the next five years. The fact the company is generating positive operating cashflow is a helpful step. 

Share 2: Brickworks Limited (ASX: BKW)

Brickworks looks like one of the best value ASX 200 shares in my opinion.

It owns a large chunk of Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) shares and it also owns 50% of a growing industrial property trust. These two assets alone provide the valuation backing for the Brickworks market capitalisation. Brickworks recently announced that a huge Amazon distribution facility will be built at its Oakdale West site which will help boost the trust’s net asset value further.

Building product divisions make up the rest of the company. In the US it’s focused on producing and selling bricks, whilst in Australia it has a strong position in bricks, paving, masonry, roofing, precast and so on. Construction has suffered a COVID-19 hit, but the bottom of the cycle is a good time to buy a business exposed to cyclical factors. Brickworks is seeing a recovery in both Australia and the US.

At the current Brickworks share price it offers a grossed-up dividend yield of 5.3%.

Share 3: City Chic Collective Ltd (ASX: CCX)

City Chic is another of the most promising small cap ASX shares in my view.

It’s a fashion retailer of plus-size clothing and accessories. Before COVID-19 it already sold a good amount of products through online channels, but it has really excelled over the past few months. The City Chic share price has risen 312% since 23 March 2020.

Near the end of May the company said it achieved 57% online sales growth during the period where its stores were closed. It has agreed rent cuts with a large majority of landlords and the company is eligible for wage support in Australia and New Zealand. This is all helpful for City Chic’s FY20 and FY21 earnings. 

The company seems determined to take advantage of the difficult circumstances to boost its market position in the plus-size fashion space. It’s currently looking for other acquisition opportunities which could improve the company’s position. 

At the current City Chic share price it’s trading at 34x FY21’s estimated earnings. 

Foolish takeaway

I like all three ASX shares at the current prices. For the long term I think Bubs could make the best returns over the next few years with the speed of its current growth. 

More reading

• 3 top ASX 200 shares for any portfolio
• Plummeting retail spend puts ASX fashion shares under the microscope
• 3 ASX shares I’d buy with $6,000 today
• 3 ASX dividend shares to grow and diversify your income
• Have $10,000 to invest? I’d pick these ASX shares

Motley Fool contributor Tristan Harrison owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks, BUBS AUST FPO, 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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I like to keep an eye on substantial shareholder notices. This is because these notices give you an idea of which shares large investors, asset managers, and investment funds are buying or selling.

Two notices that have caught my eye today are summarised below. Here’s what these fund managers have been buying:

Altium Limited (ASX: ALU)

A notice of change of interests of substantial holder shows that Pinnacle Investment Management Group Ltd (ASX: PNI) has taken advantage of recent weakness in the Altium share price to increase its holding. According to the notice, Pinnacle and its subsidiaries have lifted their holding by 1.3 million shares throughout June and July to a total of 8,263,904 shares. This represents a 6.21% stake in the electronic design software company.

The Altium share price is currently down 20% from its 52-week high, at a time when many of its industry peers are hitting record highs. Investors have been selling Altium’s shares after the pandemic weighed heavily on its performance in FY 2020. Judging by its purchases, Pinnacle appears confident this is just a short term headwind and that its long term outlook remains as positive as ever.

Costa Group Holdings Ltd (ASX: CGC)

A notice of initial substantial holder reveals that AMP Limited (ASX: AMP) has become a major shareholder of this horticulture company. According to the notice, the financial services company has been building a position in Costa over the last few months. This leaves AMP with a total of 20,387,887 shares, which is the equivalent of a 5.09% stake in the company.

With Costa’s shares down 30% from their 52-week high, it appears as though AMP sees a lot of value in them at the current level. One broker that would agree is Citi. Earlier this month it put a buy rating and $3.40 price target on Costa’s shares. This compares to the current Costa share price of $2.96.

More reading

• Why buying Altium shares could make you rich
• Brokers name 3 ASX 200 shares to buy today
• 3 ASX dividend shares growing their payouts fast
• ASX 200 down 0.2%: Big four banks tumble, Afterpay surges higher again
• Zip share price surges 30% in a week. Are we calling bubble yet?

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 Altium. The Motley Fool Australia owns shares of and has recommended COSTA GRP 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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The S&P/ASX 50 index is home to 50 of the largest shares on the Australian share market. These are predominantly household names and companies of true blue chip status.

While I wouldn’t necessarily be buying all shares on the index, I think there are a few that could be strong buys. Here’s why I would buy these three ASX 50 shares:

a2 Milk Company Ltd (ASX: A2M)

This infant formula and fresh milk company is the most recent addition to the ASX 50 index. It was included in the index at the June quarterly rebalance at the expense of financial services company AMP Limited (ASX: AMP). I think a2 Milk Company would be a great investment option due to its very positive long term outlook. This is thanks to the unquenchable appetite for its infant formula in China. Pleasingly, despite its incredible sales growth in the lucrative market, it still only has a consumption market share of 6.6%. I believe this gives a2 Milk Company a long runway for growth, which should be supported by its expanding fresh milk footprint and potential acquisitions/new product launches.

Cochlear Limited (ASX: COH)

Another ASX 50 share to consider buying is this hearing solutions specialist. Like a2 Milk Company, I think Cochlear also has a very positive long-term outlook. This is due to ageing populations and the fact that hearing tends to fade as people get older. I expect this to lead to strong demand for its high quality products over the next couple of decades and drive consistently solid sales growth. Another positive is its high level of investment in R&D and the industry’s high barriers to entry. I expect this to keep Cochlear as an industry leader for a long time to come.

Ramsay Health Care Limited (ASX: RHC)

A final ASX 50 share to consider buying is Ramsay Health Care. Although the private hospital operator’s near term growth is likely to be subdued, I continue to believe that its long term outlook is very positive. This is because Ramsay’s world class network of 480 facilities across 11 countries are well-positioned to benefit from the expected growth in demand for healthcare services over the next couple of decades. In addition to this, the company has a long history of making earnings accretive acquisitions. I expect more acquisitions to be made in the coming years. Combined with organic growth, this should lead to solid earnings growth over the long term.

More reading

• 3 defensive ASX shares to add to your portfolio
• Why I would buy a2 Milk Company and these ASX growth shares right now
• ASX income stalwart WAM Capital announces 8.2% dividend
• Top brokers name 3 ASX shares to buy right now
• Why I’m watching the a2 Milk share price

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 Cochlear Ltd. The Motley Fool Australia owns shares of A2 Milk. The Motley Fool Australia has recommended Cochlear Ltd. 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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While attempting to get rich by day trading can be tempting, it is worth remembering that statistically it creates far more losers than winners.

In light of this, I believe that if you’re interested in building your wealth, you should focus on buying and holding ASX shares over the long term.

But which shares should you buy? While there are a number of quality options on the ASX, I think Altium Limited (ASX: ALU) shares are up there with the best of the best.

What is Altium?

Altium is the company behind leading printed circuit board (PCB) design software platform, Altium Designer. It also has a number of complementary businesses such as the Octopart electronic and industrial parts search engine and the NEXUS design collaboration panel.

While its performance in FY 2020 has been disappointing given its impressive growth in recent years, it is worth noting that this is entirely down to the coronavirus pandemic. Take that out of the equation and Altium would almost certainly have smashed expectations again this year.  

In light of this, I believe investors should look beyond this short term weakness and focus on its strong long term growth potential.

This is thanks to its exposure to the Internet of Things market which continues to grow at a rapid rate. As the majority of connected devices require PCBs inside them to function, demand for Altium’s software looks set to continue to increase.

Management certainly believes this will be the case and continues with its aspirational revenue target of US$500 million by FY 2025. This is almost triple FY 2019’s revenue of US$171.8 million.

If it achieves this, which I believe it will, I expect it to lead to very strong earnings and dividend growth as it scales.

All in all, I think this makes the recent weakness in the Altium share price a buying opportunity for investors.

More reading

• Fund managers have been buying Costa and this ASX 200 share
• 3 ASX dividend shares growing their payouts fast
• Altium and these ASX 200 shares could be quality buy and hold options
• 3 of the best ASX tech shares to buy in July
• 2 ASX shares I would buy for growth and income

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 Altium. 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 buying Altium shares could make you rich appeared first on Motley Fool Australia.

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Australia’s top brokers have been busy adjusting their estimates and recommendations again, leading to the release of a large number of broker notes this week.

Three broker buy ratings that have caught my eye are summarised below. Here’s why brokers think these ASX 200 shares are in the buy zone:

Aristocrat Leisure Limited (ASX: ALL)

According to a note out of Morgan Stanley, its analysts have retained their overweight rating and $30.00 price target on this gaming technology company’s shares. The broker notes that Aristocrat Leisure’s digital business is performing a lot better than it expected. This is particularly the case with its Raid: Shadow Legends game, which it believes is generating material revenues. This is good news given the tough trading conditions its pokie machine businesses are facing. I agree with Morgan Stanley and see value in the Aristocrat Leisure share price.

CSL Limited (ASX: CSL)

A note out of UBS reveals that its analysts have retained their buy rating on this biotherapeutics company’s shares but trimmed the price target on them slightly to $331.00. UBS believes that a spike in coronavirus cases in the United States will weigh on its plasma collections in the near term. While this will create headwinds, it appears confident that other areas of the business will offset this and support earnings growth in FY 2021. I think UBS is spot on and I would buy CSL shares today.

Vocus Group Ltd (ASX: VOC)

Another note out of UBS reveals that its analysts have upgraded this telecommunications company’s shares to a buy rating with a $3.60 price target. UBS made the move on valuation grounds after the Vocus share price underperformed over recent months. It sees a lot of value in its shares at the current level, even after lowering its earnings estimates slightly to reflect higher costs. While I think UBS makes some fair points, Vocus wouldn’t be my top pick in the telco sector right now.

More reading

• Fund managers have been buying Costa and this ASX 200 share
• 3 ASX dividend shares growing their payouts fast
• ASX 200 down 0.2%: Big four banks tumble, Afterpay surges higher again
• Zip share price surges 30% in a week. Are we calling bubble yet?
• Is the Woolworths share price a buy?

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. 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 De Grey Mining Limited (ASX: DEG) share price spiralled upwards in June, hitting highs of 97 cents, which represents a whopping 107% increase for the month. It’s clear the mining explorations share has thrown aside all worry of the coronavirus pandemic, climbing a huge 1,460% this year so far.

Since the end of June, De Grey’s share price has retracted some of its gains and is now sitting at 78 cents at the time of writing.

Why did the De Grey share price take off in June?

De Grey’s exploding share price saw its market cap soar above $1 billion as the company was added to the S&P/All Ordinaries Index (ASX: XAO) for the first time in mid-June.

De Grey is a small ASX miner that specialises in gold, silver and base metals. The De Grey share price has been driven up by the gold price in 2020 as investors understand that De Grey’s profitability is influenced by 3 factors: how much gold it can mine, the gold price, and how much it costs the company to extract the gold.

In June, there was a persistent stream of good news from De Grey, largely out of its Hemi discovery zone:

• On 5 June, the miner announced it was extending its Hemi drilling site in Western Australia, which sent the De Grey share price skyrocketing 31% in one day.
• In the same release, De Grey also announced its new Brolga extension at its Hemi site, which has now returned “excellent” gold discoveries just one month later.
• On 9 June, De Grey provided a drilling update on its Aquila zone within the Hemi site, which revealed the discovery of broad, high-grade gold extensions at Aquila. It also confirmed wide spaced drilling was advancing to the west of Aquila, and the discovery of encouraging finds approximately 500m to the west of Aquila.
• On 22 June,De Grey announced additional high-grade gold finds at Hemi, including a further 8 gold discoveries from the Aquila zone, along with news that it was planning a further expansion. The subsequent couple of days saw the De Grey share price rise a staggering 39%.

Foolish takeaway

Gold is viewed by many investors as a ‘safe haven’ asset and an effective portfolio hedge against economic uncertainty, and the De Grey share price has been enjoying the large tailwinds arising from the strong gold price over the past few months.

At the time of writing, the De Grey share price is down by 8.24% to 78 cents per share. 

More reading

• De Grey Mining share price plunges 5% despite announcing “excellent” gold recoveries
• Why De Grey, Resolute, Suncorp, & Webjet shares are dropping lower
• Why De Grey, Fisher & Paykel Healthcare, Perseus, & PolyNovo shares are charging higher
• $10,000 invested in De Grey Mining shares in January would be worth $165,000 today
• De Grey Mining share price up 25%, hitting 9-year high

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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Finding a high-yielding ASX dividend share isn’t that onerous of a task. An ASX share’s dividend yield is one of the easiest statistics to find or work out yourself. A quick internet search for the highest-yielding dividend shares will probably give you a list of names like Telstra Corporation Ltd (ASX: TLS), WAM Capital Ltd (ASX: WAM) or Fortescue Metals Group Limited (ASX: FMG).

But finding the dividend stars of tomorrow? That’s where things become a whole lot more interesting. So here are 3 ASX dividend shares that I think will be amongst the best yielding investments over the next 10 years and beyond.

CSL Limited (ASX: CSL)

CSL is the ASX’s largest company and a giant in the global healthcare space. But unusually for an ASX 20 company, CSL doesn’t have a particularly eye-grabbing trailing yield – it’s currently sitting at 1.04%. But dividend investors ignore this company at their peril.

CSL paid out US$1.13 in dividends back in the 2014 financial year. By FY19, it had grown its payouts to US$1.85 – a compounded average growth rate of 10.36% per annum over 5 years. In March this year, CSL announced its interim dividend would be 95 US cents a share, up 11.76% from the previous interim payout of 85 cents. These growth rates are very exciting for anyone holding CSL shares, and as a result, I expect this ASX giant to be a hefty income share in the years to come.

Cleanaway Waste Management Ltd (ASX: CWY)

Cleanaway is a provider of waste management and disposal services — the largest of its kind on the ASX. You might even recognise the name from your local ‘garbo’ truck, as Cleanaway has dozens of local government waste collection contracts. Cleanaway has been described as something of a growth company due to its share price rising more than 190% over the past 5 years.

But the company has also been quietly growing its dividend as well. Back in FY15, Cleanaway shareholders received 2.2 cents per share in dividends. But in FY20, this had blown out to 3.9 cents per share –  a compounded average growth rate of 12.13%. As such, I’m excited about this ‘boring’ company’s future dividend potential.

Altium Limited (ASX: ALU)

Our final dividend growth share for today is WAAAX darling Altium. Altium is a tech company that markets software that helps electrical engineers design and build printed circuit boards.

The company has been growing fast, with the Altium share price climbing from $4.30 per share 5 years ago to $34.43 today. Although Altium is known as one of the hottest growth shares on the ASX, it also pays a small dividend (unlike most WAAAX shares). Today, this dividend is worth a yield of 1.1%. But considering Altium has grown this payout from 16 cents per share in FY15 to 38 cents per share in FY20 (a compound average growth rate of 18.89% per annum), the future for Altium as a dividend share is looking very bright indeed.

More reading

• Fund managers have been buying Costa and this ASX 200 share
• Why buying Altium shares could make you rich
• Brokers name 3 ASX 200 shares to buy today
• Why the Telstra share price could be set to soar
• 3 quality ASX dividend shares to buy today

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

The post 3 ASX dividend shares growing their payouts fast appeared first on Motley Fool Australia.

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Although we are always attracted to the latest tech stock outperforming the market and showing up on every news station, defensive shares are what anchor your portfolio in times of crisis.

No matter what your risk tolerance, it pays to have a few of these ‘all weather’ players in your holdings. Here are 3 defensive ASX shares that are worthy of consideration.

Coca-Cola Amatil Ltd (ASX: CCL)

Coca-Cola prepares, distributes and sells a huge range of alcoholic and non-alcoholic beverage products. It has a steady income and isn’t hugely affected by market downturns (we still drink coffee in a crisis, right?).

Trading at around $8.50 a share at the time of writing, Coca-Cola Amatil represents both a defensive share and value for money, in my opinion. Before the COVID-19 crash in March this year, Coca-Cola shares reached a 52-week high of $13.18. In fact, the Coca-Cola share price has reached around $10 for the last 13 years in a row, which lends weight to the opinion that its current price of $8.50 could be well undervalued.

Coca-Cola shares also provide investors with a healthy dividend return of 5.51%, which, when added to the undervalued nature of the stock, makes this one to add to the portfolio, in my view.

Woolworths Group Ltd (ASX: WOW)

Woolworths operates retail grocery stores on a large scale. The nature of its business (providing items of necessity) makes it an ideal candidate to stabilise any portfolio.

The Woolworths share price is trading at $38.21 per share at the time of writing. While it hasn’t fully recovered to its pre-crash highs, the Woolworths share price has displayed resilience throughout the recent market volatility. This stability is not surprising considering the nature of the COVID-19 pandemic (we’ve all seen the run on food at our local Woolies). During times of panic, people prioritise the necessities and Woolworths sells them all.

The Woolworths share price has risen by more than 40% over the last decade, which is great for a defensive stock. Woolworths also pays its shareholders a dividend of 2.70%, which isn’t high, but the combination of steady growth, stable earnings and dividend payments certainly make a strong case to add Woolworths shares to any portfolio for the long term, in my view.

Ramsay Health Care Limited (ASX: RHC)

Ramsay Health Care provides healthcare to both public and private patients across Australia. The Ramsay share price recovered quickly following the crash in March, trading at $63.62 per share at the time of writing. This represents a 21% discount on pre-COVID highs.

Due to the nature of its business, I think Ramsay is an ideal candidate to add to your portfolio in a heath crisis. Healthcare is a constant necessity and the current crisis only elevates the value of the industry. While the share price may be 21% lower than pre-March highs, Ramsay shares have grown approximately 370% over the last decade, which is fantastic for investors.

Dividend-wise, the return is 2.42% (at the time of writing). Although Ramsay has ensured its dividend has remained both stable and growing over the last decade, in April this year it announced that the dividend would be temporarily suspended amidst COVID-19 concerns and reductions in elective surgeries. We wait for further announcements from the company on the future date of resumption.

In my opinion, Ramsay Health Care is an easy choice to add to the portfolio for any investor.

Foolish takeaway

Having a few ‘all weather’ stocks in the portfolio might not seem attractive from a high growth point of view, however they provide stability, comfort and long-term stable growth. All 3 defensive ASX shares above represent industries that will continue to operate, regardless of the economic environment. Having them in the portfolio can protect profits in a downturn and certainly help you sleep at night!

More reading

• 3 of the best ASX 50 shares to buy right now
• Is the Woolworths share price a buy?
• Secos share price soars 250% on Woolies deal
• 3 dependable, blue chip ASX shares for uncertain times
• Is it possible Aussies are saving too much?

Motley Fool contributor glennleese has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Woolworths Limited. The Motley Fool Australia has recommended 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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