The spread of coronavirus is reshaping our economic future and paving the way for new winners among ASX shares. Structural shifts have been accelerated with remote working, digital payments, and e-commerce benefitting from more widespread adoption. 

ASX shares have faced very different fates since borders closed in March. The banking sector has taken a hit with profits and dividends plummeting. The travel sector remains in limbo. The retail sector has suffered from store closures and declining sales. But some individual ASX shares are not just surviving, but thriving in this new COVID-19 world. 

Online shopping has surged as consumers in lockdown go to the web for everything from essentials to luxury goods. Companies leveraged to this trend are benefitting. Kogan.com Ltd (ASX: KGN) and Afterpay Ltd (ASX: APT) are 2 ASX shares that are emerging as potential winners in the post-COVID world. 

Kogan sales and customers surge 

Kogan added 139,000 active customers in April, bringing its total number of active customers to 1,948,000. Gross sales in April 2020 grew by more than 100% compared to April 2019, leading to growth in gross profit of 150%. Kogan is Australia’s only diversified online retailer, and customers have inundated it as an alternative to physical shopping. 

The Kogan business model relies on offering products at lower prices than competitors, aggressively building market share while operating on slim profit margins. As an online-only retailer, Kogan benefits from lower costs than competitors with a physical presence, saving on store rental and staffing costs. 

Kogan launched Kogan Marketplace last year which allows third parties to sell via its website. The venture has been performing well, with sales growing 7% quarter-on-quarter between December and March. March 2020 sales were up 69% on February 2020 sales. The venture reduces working capital demands which should allow for greater profitability in future. 

Afterpay benefits from shift to online 

Buy now, pay later provider Afterpay has also benefited from the surge in online shopping with March being its third-largest underlying sales month on record. Underlying sales in the March quarter increased 97% compared to Q3 FY19. For the year to date, Afterpay has reported underlying sales of $7.3 billion, growing at 105% compared to the prior corresponding period (pcp). 

Healthy growth in merchant and customer numbers was recorded during the March quarter – active customers grew to 8.4 million, up 122% on the pcp. Merchant numbers grew to 48,400 globally, up 78% on the pcp. 

Foolish takeaway

The future of shopping and payments is changing rapidly thanks to coronavirus. Kogan and Afterpay are at the forefront of this shift. 

More reading

• 3 common mistakes millennials make investing in ASX shares
• This ASX growth share has rocketed 150% higher since March. Is it too late to invest?
• 2 exciting ASX tech shares to buy right now
• Could these small cap ASX shares be the next Afterpay?
• 3 top ASX shares to buy now and hold for 10 years

Motley Fool contributor Kate O’Brien has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd. 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 These ASX shares are set to dominate the post-COVID-19 economy appeared first on Motley Fool Australia.

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Most ASX investors make mistakes in their investing careers – none of us are perfect but millennials, through being the youngest and often the most inexperienced group of investors, often make a disproportionate amount.

Whilst this is totally normal, it doesn’t change the fact that making mistakes when investing is financially painful and it’s far better to learn from someone else’s mistakes than your own.

So here are three mistakes I often see millennials make when investing in ASX shares:

Mistake 1 – obsessing over share prices

This is one of the most common things I see with young investors out there. I have had excited friends tell me that one of their stocks was “up 1% today” and so they were ‘raking it in’. Whilst I think keeping an eye on your shares is a great idea, checking them every hour of the day isn’t. Investing is a long-term game, not something that should be tracked just based on normal market fluctuations. As Warren Buffett once said: “If you buy a farm, do you go up and look every couple of weeks to see how far the corn is up?”

Mistake 2 – buying too high, selling too low

This one is a common mistake and also one that will set you back dramatically. I have seen many millennial investors get very excited when their shares go up in value. So excited, in fact, that they think they have to ‘lock-in’ their gains, even if they’ve only owned their shares for a few months. On the other hand, they can pile more money in, chasing those ‘sweet gains’.

Conversely, I have also seen would-be investors buy shares and, after watching them go down 5% or 10%, sell out, thinking they’ve made a terrible mistake.

Again, this is letting the markets dictate what you do, which is a terrible habit to get into if you want decent returns over the long-term.

Mistake 3 – not diversifying

I once met a young investor who told me (very proudly) that he only owned two ASX shares – Afterpay Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P). On one hand, I think everyone should invest in companies they find interesting and exciting. But there is a limit. If your entire portfolio consists of unprofitable payments companies, you are leaving yourself open to a lot of risk.

That’s why I think it’s important for new investors to build up a diversified portfolio of companies across at least a few different industries. That way you are not wiped out if the government bans buy-now, pay-later offerings, for instance. If you only find interest in one area, you can always use exchange-traded funds (ETFs) to give your portfolio a little more balance.

More reading

• 2 exciting ASX tech shares to buy right now
• Could these small cap ASX shares be the next Afterpay?
• 3 top ASX shares to buy now and hold for 10 years
• If you invested $10,000 in the Afterpay IPO, this is how much you’d have now
• Is the Zip share price in the buy zone?

Sebastian Bowen 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.

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On Wednesday I looked at three ASX shares that brokers have given buy ratings to this week.

Unfortunately, not all shares are in favour with them right now. Three that have just been given sell ratings are listed below.

Here’s why these brokers are bearish on them:

Amcor PLC (ASX: AMC)

According to a note out of Goldman Sachs, its analysts have retained their sell rating but lifted their price target on this packaging company’s shares to $12.50. Amcor delivered stronger than expected earnings growth in the third quarter. Its EBIT increased 10% compared to Goldman’s 7% forecast. However, it remains sell rated on valuation grounds. It notes that Amcor is trading at a notable premium to other packaging companies under its coverage. Amcor’s shares are changing hands for $14.10 this afternoon.

Commonwealth Bank of Australia (ASX: CBA)

A note out of Morgan Stanley reveals that its analysts have retained their underweight rating and cut the price target on this banking giant’s shares to $56.00. According to the note, following the release of its third quarter update, the broker sees little reason that Commonwealth Bank’s shares should trade at a premium to its peers. In addition to this, it has forecast a sizeable dividend cut in August and has concerns over margin pressures. The Commonwealth Bank share price is down almost 3% to $59.16 this afternoon.

Sigma Healthcare Ltd (ASX: SIG)

Analysts at UBS have retained their sell rating and 53 cents price target on this pharmacy chain operator and distributor’s shares following its trading update. Although Sigma reported strong sales growth in March because of the pandemic, it notes that management has decided against providing guidance for FY 2021 at this stage. So, with its shares trading at approximately 20x estimated forward earnings, UBS sees no reason to change its rating at this point. The Sigma share price is trading at 57.5 cents this afternoon.

More reading

• ASX 200 down 0.9%: Xero posts strong growth & Australian economy loses 594,300 jobs
• Why Beach, CBA, Qantas, & Xero shares are dropping lower
• What happens to ASX shares if Australian house prices do fall 30%?
• Is the CBA share price a buy?
• Negative interest rates coming? Here’s what it would mean for ASX shares

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Amcor 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 Top brokers name 3 ASX shares to sell right now appeared first on Motley Fool Australia.

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