The speculation over the impact that coronavirus has had on the Chinese government and its reputation continues to grow. Tom Orlik, Chief Economist at Bloomberg and author of newly published ‘China: The Bubble that Never Pops’, joins The Final Round to discuss his findings and what can be expected from the Chinese economy in the next decade.
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If you’re looking to invest $10,000 into the share market in FY 2021, I think the three ASX shares listed below could be quality options.
I believe all three have the potential to beat the market over the next 12 months and beyond. Here’s why I like them:
The first option for investors to consider investing $10,000 into is the BetaShares NASDAQ 100 ETF. This exchange traded fund allows you to invest in the 100 largest non-financial businesses listed on the famous technology-focused NASDAQ index through a single investment. This means you’ll be investing in shares such as Amazon, Apple, Netflix, Facebook, Microsoft, and Google’s parent, Alphabet. I think these are among the highest quality businesses in the world and capable of driving the NASDAQ index higher in FY 2021 and throughout the 2020s.
Another option to consider for that $10,000 investment is NEXTDC. I believe the data centre operator is positioned perfectly to capitalise on the cloud computing boom. According to global technology research firm Gartner, it has forecast that 80% of all organisations will shift their workloads to third-party data centres by 2025. And given that this prediction was made pre-pandemic, I wouldn’t be surprised if this shift has accelerated. Overall, I expect this to lead to increasing demand for its innovative data centre outsourcing solutions. This should support solid earnings growth as the company scales.
Another ASX share to consider buying with the $10,000 is ResMed. I’m confident the medical device company can be a strong performer in FY 2021 and beyond. This is due to its focus on the sleep treatment market and the proliferation of obstructive sleep apnoea, which is driving increasing demand for its masks and software solutions. In addition to this, a second wave of coronavirus in a number of key markets looks likely to lead to strong ventilator sales in the near term.
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Motley Fool contributor James Mickleboro owns shares of NEXTDC Limited. The Motley Fool Australia owns shares of and has recommended BETANASDAQ ETF UNITS. 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.
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The S&P/ASX 200 Index (ASX: XJO) went up 1.4% today, defying the ongoing negativity with COVID-19.
This afternoon the Victorian Premier Daniel Andrews has announced that restrictions will be reintroduced for 10 Victorian suburbs. People will only be allowed to leave their house for four reasons. Those reasons are: for work or school, for care or care giving, for daily exercise, for food and other essentials. Police will actively enforce the suburb lockdowns with on-the-spot fines if people are out of their homes for anything other than the permitted reasons.
The ASX 200 fast food business announced its FY20 result today.
Revenue grew by 8.9% to $981.7 million. KFC Australia delivered same store sales growth of 3.5%. However, KFC Europe’s same store sales dropped 5.8% mainly due to COVID-19.
Collins Foods said that Taco Bell continues its expansion amidst high brand engagement, with recent shifts towards drive-thru and delivery channels.
Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) (pre AASB 16) grew 6.3% to $120.6 million. Underlying net profit after tax (NPAT) (pre AASB 16) rose by 5.1% to $47.3 million. Statutory NPAT came in at $31.3 million.
Collins Foods said that net debt was down to $203.2 million (compared to $212.5 million in FY19). The net leverage ratio was down to 1.69 times (compared to 1.87 times in FY19).
The board of Collins Foods decided to declare a final dividend of 10.5 cents per share, bringing the total FY20 dividend to 20 cents per share, up from 19.5 cents in FY19.
In FY21 Collins Foods wants to add up to 12 new KFC Australia restaurants, three to four European KFC restaurants and four to six Taco Bell restaurants.
The board of ASX 200 company Freedom Foods announced today that last night it accepted the resignation of CEO and managing director Rory Macleod. He has resigned from all board and executive positions.
The company also announced that further to the update it released on 25 June 2020, it has engaged Ashurst and PwC to advise and assist with ongoing investigations into the company’s financial position.
Freedom Foods shares remain suspended.
The business has acquired a new 9-hectare site in Clyde which is located in the south east growth corridor.
The new site will add approximately another 230 homes which increases Lifestyle Communities portfolio to 4,518 home sites including sites in planning, development or under management.
Lifestyle Communities also announced an increase of its existing debt facility by $50 million and extended its tenor. The result of the amendments is a combined facility of $275 million comprising a $165 million tranche maturing in March 2024 and a $110 million tranche with a maturity of June 2025.
The managing director of Lifestyle Communities, James Kelly, said: “We are seeing a number of high-quality sites come to market because of the change in macro conditions. The increase in facility size is an important step to ensure we have capacity to secure additional sites that meet our site selection criteria as they become available.”
After the market had closed, ASX 200 agri business Nufarm announced that it’s going to cease manufacture of insecticides and fungicides at its Raymond Road site in Laverton, Australia and curtail herbicide manufacturing at its operations in Linz, Austria.
Nufarm expects that the initiatives announced will deliver an improvement to earnings before interest, tax, depreciation and amortisation (EBITDA) of up to $15 million per annum. However, there will be one-off cash costs relating to the restructuring of approximately AU$25 million, which will be partially offset by proceeds from the future sale of the Raymond Road property.
We hear it over and over from investors, “I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I’d be sitting on a gold mine!” And it’s true.
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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Collins Foods Limited and 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.
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Now that the 2020 financial year has officially ended for ASX shares (as of market close), we can take a definitive look at how individual companies have performed over the last 12 months.
Due to the coronavirus pandemic, most ASX shares have recorded heavy losses over the past year, although there have been quite a few exceptions. Telstra Corporation Ltd (ASX: TLS) is not one of those exceptions, much to the chagrin of its shareholders.
Telstra shares started the financial year last July at $3.83. Today, those same shares have ended the trading day at $3.13, which means the Telstra share price has returned -18.28% over the period. Even accounting for Telstra’s hefty dividend payments, shareholders are still underwater. Over the same period, the S&P/ASX 200 Index (ASX: XJO) is down around -11.3%, which means Telstra has lagged the broader market too.
The Telstra share price has been under pressure for a few years now. Remember, this was a company that was commanding a $6.50 per share price tag 5 years ago.
Telstra has been suffering throughout the rollout of the National Broadband Network (NBN). This has taken away Telstra’s ownership of the old copper ducts and networks which are still lucrative telecommunications infrastructure. Telstra used to be able to charge its competitors for the use of this infrastructure, which was obviously a great position to be in. Now, it has to compete on a level playing field, which, while great for consumers, is bad for Telstra’s bottom line.
Telstra has also been out of favour because it is set to gain a newly beefed-up competitor in the form of the recently merged Vodafone-TPG Telecom Ltd (ASX: TPM). The ACCC initially blocked the TPG merger from going ahead, but an appeal to the Federal Court has resulted in the roadblock being rescinded. Coincidentally, today is the first ASX trading day of the new TPG. Since TPG was a formidable competitor in the fixed-line space and Vodafone in the mobile space, the combined company could cause a headache for Telstra’s market dominance. Although personally, I don’t see it as quite as significant a threat as perhaps some other investors. Even so, the market appears to be betting on TPG shares over Telstra right now.
At its current level, I actually think there is a lot to like about the Telstra share price. Telstra commands the lion’s share of the Aussie telco market. It has a strong brand, an arguably superior mobile network and is also the market leader in investment in the new 5G technology, which is set to supersede the current-generation 4G mobile network over the next year or two.
Telstra also pays a healthy dividend of 16 cents per share on a trailing basis (including the special NBN payments). On current prices, that would give Telstra a trailing yield of 5.09%, or 7.27% grossed-up.
For a strong dividend share with potential 5G upside, I think Telstra shares are well worth considering for FY2021.
We hear it over and over from investors, “I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I’d be sitting on a gold mine!” And it’s true.
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Motley Fool contributor Sebastian Bowen owns shares of Telstra Limited. 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.
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Of all the S&P/ASX 200 Index (ASX: XJO) shares that have delivered outperforming returns for investors in the 2020 financial year, I think TPG Telecom Ltd (ASX: TPM) is one of the most surprising. After all, an ASX telco isn’t the first place most investors look in the search for a market-beating investment.
But the performance of the TPG share price over FY2020 has warranted a re-think of this logic. TPG shares began FY20 at $6.47. Today (on the eve of the new financial year), those same shares will set you back $8.93. That represents a 38.02% gain for TPG shareholders over the past 12 months.
The past year has been a perfect storm for TPG shares, with several events coming together in the telco’s favour. Firstly, TPG’s planned merger with Vodafone has been greenlit by shareholders and the Federal Court after initially being blocked by the ACCC on competition grounds. This enables TPG to merge its high-performing, fixed-line network of customers with Vodafone’s established market of mobile customers. This ‘new TPG’ looks better set to take the fight up to its competitors in Optus and Telstra Corporation Ltd (ASX: TLS). The combined entity (which officially listed today) is due to start ordinary trading in its own right soon, under the far more appropriate ‘TPG’ ticker symbol.
Secondly, shareholders have also been excited about TPG’s spin-off of its Singapore telco business into another separate entity, Tuas Limited (ASX: TUA), which also hit the boards this morning. As part of this ‘bait and switch’ merger/de-merger, TPG shareholders are also looking forward to a special 49 cents per share dividend which is set to be paid on 13 July.
All of these factors have combined to push sentiment surrounding TPG shares to new highs.
I think the new TPG is shaping up to become a force to be reckoned with on the ASX telco scene. It looks as though the company will benefit from synergies with Vodafone, and TPG’s enigmatic-but-highly-rated CEO David Teoh is a proven performer. However, I do think TPG still has its work cut out for it in competing with Telstra. Telstra has always been the dominant business in the ASX telco space, and I don’t see TPG erasing this advantage anytime soon. Telstra still has the lion’s share of both the fixed-line and mobile markets, and will likely continue holding on tightly to these due to the company’s strong brand and dominant mobile network.
Furthermore, I’m far more bullish on Telstra’s 5G network plans than TPG’s, with the latter acknowledging it has fallen behind in the 5G race. 5G promises to be the ‘next big thing’ in telco, with higher speeds, lower latency and almost limitless ‘Internet of Things’ applications being touted. Even though TPG shares have been the winner in FY2020, I’m still betting on Telstra for the rest of the decade.
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Motley Fool contributor Sebastian Bowen owns shares of Telstra Limited. 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.
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One area of the market that I’m particularly bullish on over the long term is the tech sector.
In this sector I believe there are a good number of shares that could generate strong returns for investors throughout the 2020s.
Three of the best ASX tech shares to buy in FY 2021 are listed below. Here’s why I think they are great long term options:
The first ASX tech share to consider buying is Altium. It is the printed circuit board (PCB) design software provider behind the Altium Designer platform. This award-winning platform is used by almost 50,000 users to connect with every facet of the PCB design process. While FY 2020 has been a disappointing year because of the disruption caused by the pandemic, I believe the future remains as positive as ever. Especially given how 5G internet is supporting the rise of connected devices globally. I expect this to result in strong demand for electronic design software over the next decade.
Another ASX tech share to consider buying is Pushpay. It is a donor management system provider which has a strong and growing presence in the church market. In fact, as of the end of FY 2020, it has a total of 10,896 customer using its platform. From these customers, Pushpay generated US$127.5 million in revenue. While this is a significant number, it is still only scratching at the surface of management’s medium term target. It is aiming to win a 50% share of the medium to large church market, which represents a $1 billion revenue opportunity. Given the quality of its platform and the recent acquisition of Church Community Builder, I believe it will get there.
A third ASX tech share to consider buying in FY 2021 is Xero. It is a New Zealand-based cloud accounting software company which has been growing its customer base at a rapid rate over the last few years. So much so, Xero finished FY 2020 with a total of 2.285 million subscribers. This was a 26% lift on the prior corresponding period. And combined with an increase in average revenue per user, the company reported a 30% increase in operating revenue to NZ$718.2 million. The good news is that I’m confident Xero still has a long runway for growth. This is thanks to its massive global market opportunity and its high quality and sticky product. As a result, I think it could be a great buy and hold option.
We hear it over and over from investors, “I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I’d be sitting on a gold mine!” And it’s true.
And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!
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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, PUSHPAY FPO NZX, and Xero. The Motley Fool Australia has recommended PUSHPAY FPO NZX. 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 think that there are some ASX dividend shares that are worth a spot in every income investor’s portfolio.
Some ASX dividend shares offer very large dividend yields like WAM Research Limited (ASX: WAX). But that may not suit everyone. Perhaps they want more of the returns in the form of capital growth. Or maybe they are in a higher tax bracket and they don’t want to lose too much of the income to the ATO each year.
I think the below ASX dividend shares give the right mix of yield and growth:
This is a listed investment trust (LIT) which invests in overseas shares.
In terms of yield, it targets a 4% distribution yield for unitholders. That seems high enough to soundly beat income from a bank account, but low enough to retain a majority of the longer-term returns for future growth.
The ASX only makes up 2% of the global share market, so Aussies are missing out on a lot of potential opportunities if they don’t go for international shares.
The ASX dividend share only invests in the best shares in the world. Over the long-term these types of businesses can be compound growth machines. Some of its largest positions include Microsoft, Alphabet, Tennant and Alibaba.
At 31 May 2020, the LIT had made an average return per annum after fees of 12.5% since inception in October 2017, outperforming the MSCI World Net Total Return Index (AUD) by 1.52% per annum. Don’t forget that the returns include the period of the recent COVID-19 share market sell off.
This is an investment conglomerate that has been listed since 1903.
Taking into account the upcoming final FY20 dividend increase, Soul Patts has a FY20 grossed-up dividend yield of 4.4%.
The ASX dividend share has grown its dividend every year since 2000 and it has paid a dividend every year since 1903. That’s the best dividend record on the ASX in terms of consecutive annual dividend growth.
The investment conglomerate receives investment income from its portfolio each year. Some of its biggest holdings include: TPG Telecom Ltd (ASX: TPG), Brickworks Limited (ASX: BKW), Clover Corporation Limited (ASX: CLV) and Bki Investment Co Ltd (ASX: BKI).
Soul Patts funds its own dividend from the investment income, less operating expenses. In FY19 it paid out about 80% of its net regular operating cashflows. So not only does Soul Patts keep all of the capital growth, but it can also re-invest the cashflow that’s retained as well.
This ASX dividend share is one that could be in a portfolio for decades, so I think it’s well worth an investment at a share price under $20.
This is a listed investment company (LIC) which invests in ASX shares with market capitalisations under $300 million.
The benefit of LICs is that they can do the investing on your behalf and they can turn capital growth into a growing dividend for shareholders.
I believe that WAM Microcap could be one of the best-performing LICs over the next decade. Small caps aren’t closely followed by many investors, so they can be better value and have stronger long-term earnings potential.
At the end of May 2020, WAM Microcap had made returns (before expenses, fees and taxes) of 14.3% per annum since inception in June 2017. That’s a strong return despite the COVID-19 selloff, which hurt, particularly for the small cap end of the market.
WAM Microcap has an annualised dividend per share of 6 cents, which translates to a grossed-up dividend yield of 7%.
I reckon each of these ASX dividend shares are some of the best Aussies can buy. I believe they can create strong total returns with a good starting yield and long-term dividend growth. At the current prices I’d probably go for WAM Microcap.
We hear it over and over from investors, “I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I’d be sitting on a gold mine!” And it’s true.
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Tristan Harrison owns shares of MAGLOBTRST UNITS, WAM MICRO FPO, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Clover Limited. The Motley Fool Australia owns shares of and has recommended Brickworks 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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ASX investors will have an opportunity to regain some of the lost ground from the 2020 financial year with leading brokers naming the latest ASX stocks to buy.
While S&P/ASX 200 Index (Index:^AXJO) rallied 1.4% today, it closed off FY20 with an 11.3% loss due to the COVID-19 meltdown.
The market is likely to remain volatile and unpredictable as we enter FY21 but there are a number of stocks that look well placed to outperform, according to brokers.
One to watch is the BlueScope Steel Limited (ASX: BSL) share price with Macquarie Group Ltd (ASX: MQG) reiterating its “outperform” recommendation on the stock.
The coronavirus-induced economic shutdown is hurting the steel industry, but there’s precisely why the broker likes BlueScope, which owns North Star in the US.
“Production in the Great Lakes region of the US has stepped down meaningfully (from ~700ktpw to ~400ktpw), which should aid North Star’s position,” said the broker.
“A gradual restart could present some risks to price progression, but on the whole, we expect steel prices to trend higher from here.”
The broker is also expecting more Australian government stimulus for the housing market, which will support BlueScope’s local operations.
Macquarie’s 12-month price target on BlueScope is $12.20 a share.
Another stock that might be worth considering is the Jumbo Interactive Ltd (ASX: JIN) share price after its big two-day slump.
Investors took a dim view of its renegotiated lottery reseller deal with Tabcorp Holdings Limited (ASX: TAH), but Morgans isn’t put off.
In fact, the broker upgraded the stock to “add” from “hold” with a 12-month price target of $11.58 a share.
“We believe the extension of the agreement with TAH is positive for JIN and provides the group with certainty as a reseller of national games and allows it to focus on growing the Powered By Jumbo (SaaS) business,” said Morgans.
Meanwhile, COVID-19 hit Growthpoint Properties Australia Ltd (ASX: GOZ) might be another to add to your shopping list.
Credit Suisse restated its “outperform” call on the industrial and office landlord as it hasn’t been materially hit by the pandemic.
Rent collection in April, May and June have been relatively high and the group is anticipating collections to increase for May and June as rent relief negotiations are finalised.
“While total billings do not include rent waived for small and medium enterprise (SME) tenants, GOZ indicated the total amount of rent waived over the 3-month period is less than A$1mn,” said the broker.
“Despite a challenging (and uncertain) economic climate, we see a degree of defensiveness over GOZ’s earnings.”
Growthpoint is trading at a more than 11% discount to its net tangible asset (NTA) value and is sitting on a dividend yield of around 7%.
Credit Suisse’s price target on the stock is $3.34 a share.
3 “Double Down” Stocks To Ride The Bull Market
Motley Fool resident tech stock expert Dr. Anirban Mahanti has stumbled upon three under-the-radar stock picks he believes could be some of the greatest discoveries of his investing career.
He’s so confident in their future prospects that he has issued “double down” buy alerts on each of these three stocks to members of his Motley Fool Extreme Opportunities stock picking service.
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Brendon Lau owns shares of BlueScope Steel Limited and Macquarie Group Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Jumbo Interactive Limited. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool Australia has recommended Jumbo Interactive 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 MGM Wireless Limited (ASX: MWR) share price was a strong performer on the market today, recording a 16.67% gain on the back of a sales agreement with Vodafone Australia.
MGM Wireless designs and develops technology, software and wearable devices to enhance communication between families, schools, and society.
The company’s multichannel communication solutions enable schools to communicate with parents and caregivers using their preferred medium. These solutions are used by more than 1,400 schools and 1.7 million parents.
This morning, MGM Wireless announced it has entered into a sales agreement with Vodafone Hutchison Australia, which is now trading as TPG Telecom Limited (ASX: TPG) following its merger with TPG.
Under the agreement, the mobile network operator will sell MGM’s Spacetalk smartwatches in Vodafone retail stores from as early as August 2020.
Spacetalk is a children’s smartwatch sold in Australia, New Zealand and the UK through leading retailers like Officeworks, JB Hi-Fi Limited (ASX: JBH), and Kogan.com Ltd (ASX: KGN).
MGM Wireless describes the device as an “all-in-one smart watch, phone and GPS for kids aged 5-12”. Customers manage the Spacetalk watch by downloading the company’s AllMyTribe smartphone app, which requires an ongoing monthly in-app subscription.
Vodafone will be the first Australian telco to sell Spacetalk through its retail footprint. It will offer Spacetalk with its ‘Red Wearable’ plan for a monthly plan fee. Globally, operators Sky Mobile in the UK and Spark New Zealand Ltd (ASX: SPK) offer a similar set up.
Commenting on the agreement, chief executive Mark Fortunatow said:
“We are delighted to have signed this Agreement with Vodafone. For the first time, Australian parents will be able to purchase SPACETALK with a mobile plan for one affordable monthly fee. It’s a simple, one-stop solution to keep kids safe and families connected.”
Vodafone head of devices, Ian Walls, also shared his thoughts, saying:
“The SPACETALK Watch is a natural fit for Australian families and we are proud to be the first Australian Telco to partner with MGM Wireless to bring this innovative device to the market.”
Since launching on a single online portal in 2017, Spacetalk’s distribution channels across Australia and New Zealand has expanded to 777 stores as at 31 December 2019.
Wearable Spacetalk revenues recorded sizeable growth in the first-half of FY20, jumping 140% from $2.64 million in the prior corresponding period (pcp) to $6.34 million. Within this segment, Australian and New Zealand revenues grew by 94% on the pcp, while UK sales added a further 46% growth to overall Spacetalk revenues.
Additionally, AllMyTribe monthly app subscriptions increased to $130,000 in March 2020. This was a new monthly record and represented quarter-over-quarter growth of 19%.
Including today’s jump, MGM Wireless has a market capitalisation of just under $20 million. If you’d rather invest in much larger and more liquid companies, don’t miss the top ASX growth shares in the report below.
3 “Double Down” Stocks To Ride The Bull Market
Motley Fool resident tech stock expert Dr. Anirban Mahanti has stumbled upon three under-the-radar stock picks he believes could be some of the greatest discoveries of his investing career.
He’s so confident in their future prospects that he has issued “double down” buy alerts on each of these three stocks to members of his Motley Fool Extreme Opportunities stock picking service.
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Cathryn Goh has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Kogan.com ltd. The Motley Fool Australia has recommended Kogan.com ltd. 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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