Stock Pick

  • Is the Newcrest Mining share price in the buy zone?

    Old fashioned scales weighing two gold bars in front of dark background, gold share price, newcrest mining share price

    Despite still trading lower than its 52-week high, the Newcrest Mining Limited (ASX: NCM) share price has been climbing higher in 2020 as investors flock to ASX 200 gold shares. But while investors have been snapping up the Aussie gold miner, is it still in the buy zone?

    Why the ASX 200 gold miner’s shares are soaring

    While the S&P/ASX 200 Index (ASX: XJO) is down 16.83% this year, Newcrest’s value has surged 5.79%. That means the Aussie gold miner has outperformed the ASX 200 benchmark by an impressive 22.62% in 2020.

    The main factor driving the Newcrest Mining share price higher is the global gold price. The value of gold has surged this year amid the COVID-19 pandemic, rising geopolitical tensions and an oil price war.

    Investors don’t like uncertainty, and there’s been plenty of that in 2020. This means the gold price has reached multi-year highs above the US$1,750 per ounce mark on the back of strong demand. That’s good news for the Newcrest Mining share price which has climbed to $32.00 per share.

    Is the Newcrest Mining share price in the buy zone?

    Newcrest is a solid large-cap ASX share at the best of times. It’s worth $25.9 billion at the moment and is well inside the ASX50. However, the perceived safety of gold has supported the gold miner’s share price so far this year.

    Having said that, I won’t be buying Newcrest shares. While the Aussie gold miner could continue to outperform this year, I like to invest for the long-term. It’s easy to get distracted by short-term share price movements, but it pays to remember your investment strategy and avoid the day-to-day noise.

    Foolish takeaway

    There are plenty of investors looking to invest in ASX gold shares right now. While a soaring gold price could support the Newcrest Mining share price in the short-term, buying shares only makes sense as part of a longer-term investment strategy.

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    Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

    The post Is the Newcrest Mining share price in the buy zone? appeared first on Motley Fool Australia.

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  • 3 shares now trading at crazy cheap prices

    Some shares are still trading at crazy cheap prices because of the coronavirus. I think it’s worth considering if they are buys today or not.

    The best time to buy shares is when they’re at much cheaper prices, which is what has happened to plenty of businesses.

    Here are three shares at crazy cheap prices that could be worth looking at:

    Challenger Ltd (ASX: CGF) 

    The Challenger share price is down 57% from where it was at 21 February 2020. The annuity provider has seen a painful hit, but the company is still predicting that it can hit its profit before tax guidance in FY20 which is reassuring.

    Over the long-term I do think that the lower interest rates could be harmful to Challenger as it needs to generate a return to pay the annuities. A lot of its investments are currently in bonds, which are earning a very small return. But the demographics are still in its favour. 

    At the current crazy cheap share price Challenger offers a trailing grossed-up dividend yield of 11.4%.

    Brickworks Limited (ASX: BKW) 

    The Brickworks share price is down 34% since 20 February 2020. I think this is a crazy cheap price for a reliable share that has already been around for many decades.

    Construction is clearly going to be affected this year as projects finish and new ones are delayed (or cancelled). However, I believe this is just a shorter-term problem and projects will return sometime next year.

    In the meantime, Brickworks receives reliable cashflow from its other assets being its ‘investments’ division and 50% stake in an industrial property trust which should be able to fund the grossed-up dividend yield of 6.25% fore the foreseeable future.

    Costa Group Holdings Ltd (ASX: CGC)

    The Costa share price is down 38% from a year ago. The drought and other one-off issues caused a lot of hurt to Australia’s biggest horticultural player.

    I think a share price under $3 is a crazy cheap price considering food prices are rising and Costa continues to have attractive global growth aspirations.

    There has even been a bit more rain recently which could help the company as well. Whilst it doesn’t have a large dividend, it is still paying one which hopefully shows the confidence of the board in the company’s future.

    Foolish takeaway

    I think each of these shares are trading at crazy cheap prices for what profit they may be generating in two or three years. If I had to pick one of the three it would be Brickworks for its defensive assets and US growth prospects.

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    Motley Fool contributor Tristan Harrison owns shares of COSTA GRP FPO. The Motley Fool Australia owns shares of and has recommended Brickworks, Challenger Limited, and 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.

    The post 3 shares now trading at crazy cheap prices appeared first on Motley Fool Australia.

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  • Stocks in Asia to Slip After Vaccine Study Doubts: Markets Wrap

    Stocks in Asia to Slip After Vaccine Study Doubts: Markets Wrap(Bloomberg) — Stocks in Asia looked poised to track their U.S. peers lower after reports circulated that Moderna Inc.’s vaccine study, which was credited in part for Monday’s rally, didn’t produce enough critical data to assess its success. Treasuries gained.Futures dropped in Japan, Hong Kong and Australia. Contracts on the S&P 500 dipped after the U.S. gauge lost ground in the final hour of trading to end about 1% lower. Riskier assets had started the week on the front foot after the Moderna news fueled hopes for a coronavirus vaccine, but investors are struggling to maintain the optimism as they continue to monitor efforts to both contain the pandemic and restart economies. Crude oil slipped below $32 a barrel in New York, while the dollar edged lower.“We are being fairly cautious,” Shawn Matthews, founder and chief investment officer at Hondius Capital Management LP, said on Bloomberg TV. “If you look at the economy, it feels like it’s the summer of hope right now, where everyone is hoping it’s going to turn around.”Headwinds remain for stocks, not least a deteriorating U.S.-China relationship. In a further sign of tightening scrutiny on capital flows to the Asian nation, Nasdaq is set to unveil new rules for initial public offerings including tougher accounting standards that will make it more difficult for some Chinese companies to list on the exchange. Walmart and Home Depot both suspended their outlooks for the year, the latest companies to show the difficulties in predicting the road ahead.Earlier, Federal Reserve Chairman Jerome Powell reiterated during a Senate hearing that the central bank is ready to use all the weapons in its arsenal to help the U.S. economy endure the coronavirus pandemic.These are some of the main moves in markets:StocksFutures on the S&P 500 dipped 0.2% as of 7:02 a.m. in Tokyo. The gauge fell 1.1% on Tuesday.Futures on Japan’s Nikkei 225 slid 0.9%.Hang Seng futures earlier retreated 0.2%.Futures on Australia’s S&P/ASX 200 Index declined 1.5%.CurrenciesThe yen was at 107.68 per dollar.The offshore yuan held at 7.1190 per dollar.The euro bought $1.0922.BondsThe yield on 10-year Treasuries fell four basis points to 0.69%.CommoditiesWest Texas Intermediate crude slipped 0.8% to $31.72 a barrel.Gold was at $1,746.17 an ounce.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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