Aug.09 — Democrats and Republicans have no new talks scheduled on the next stimulus bill. They are trillions of dollars apart on overall spending and on key issues, including on aid to state and local governments and the amount of supplementary unemployment benefits. House Speaker Nancy Pelosi and Senator Chuck Schumer spoke to reporters on Friday.
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Aug.09 — President Donald Trump signed an executive order that provides an extra $400 a week in jobless benefits — down from $600 weekly that had been provided through last week, authorized by a Congressional stimulus bill in March — and that states would be responsible for covering 25% of that cost. He spoke on Saturday in New Jersey.
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My ASX share of the week is MFF Capital Investments Ltd (ASX: MFF).
MFF Capital is a listed investment company (LIC) which is listed on the ASX. The job of a LIC is to invest in other shares on your behalf. It aims to hold at least 20 shares in its portfolio.
It focuses on companies with attractive business characteristics. In other words, quality businesses.
The businesses it looks to buy must be trading at a discount to their intrinsic value. Meaning, the share has to be trading at good value for MFF Capital to decide to buy.
It mostly invests in overseas shares, but it does own some ASX shares too.
The person at the helm of MFF Capital is Chris Mackay, the co-founder of Magellan Financial Group Ltd (ASX: MFG). He owns more than $183 million of MFF Capital shares, so he’s very aligned with regular shareholders.
MFF Capital has been one of the best-performing LICs over the past decade. The ASX share has delivered an average total shareholder return per annum of 17.9% per annum.
For the 2010s MFF Capital was largely invested in US shares. It did very well with shares like MasterCard, Visa, Home Depot, Bank of America, JPMorgan Chase, Alphabet, Lowe’s and HCA Healthcare. It didn’t hold much cash at all during the last decade.
One of the main advantages of LICs is that they can shift their holdings to the best opportunities.
Earlier this year MFF Capital decided to sell many of its positions and significantly increase its cash position as the COVID-19 situation was developing.
At 31 July 2020 MFF Capital’s net cash position was 41.7%. Despite the high cash position, it still has some high-conviction positions. At the end of last month, 17.9% was invested in Visa, 16.5% was invested in MasterCard, 9.6% was invested in Home Depot, 2.4% was invested in CVS Health, 3.7% was invested in Berkshire Hathaway and 2.1% was invested in Microsoft.
The ASX share’s cash position is largely in US dollars, so MFF Capital’s value in Australian dollar terms has been slowly falling since March as the Australian dollar strengthened against the US dollar.
I think there could be a lot more market volatility ahead, particularly as the US election gets closer. A LIC with a large cash position could be a good hedge for whatever happens next. If the market just keeps rising then its equity positions will benefit.
I think it’s a good time to buy things related to the US share market with how much stronger the Australian dollar is at $0.72 today.
There are only a certain number of investment managers that I think can outperform the market over the long-term. Chris Mackay is one of them. The fact that MFF Capital’s costs are fixed is a really useful thing – as the ASX share gets bigger its costs as a percentage of assets should fall.
I also like that MFF Capital is looking to increase the dividends to shareholders. It has a large franking credit balance that has more value in the hands of shareholders, so bigger dividends make sense. The LIC is aiming to increase the rate of six monthly dividends from the current rate of 3 cents per share to 5 cents per share within the next three years.
At the current MFF Capital share price, an annual dividend of $0.10 per share equates to a grossed-up dividend of 5.4%. That’s a solid future dividend yield for the ASX share.
In terms of valuation, the MFF Capital pre-tax net tangible assets (NTA) was $2.74 per share, which is a discount of 3.3% compared to the MFF Capital share price. I’d be happy to buy another parcel of MFF Capital shares today.
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Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.
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Motley Fool contributor Tristan Harrison owns shares of Magellan Flagship Fund 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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If you’re wanting to gain some exposure to the small side of the market, then I think the three small caps listed below would be worth a closer look.
Here’s why I think they have the potential to grow strongly in the future:
The first small cap share to look at is Audinate. It is a digital audio-visual networking technologies provider which is best known for its innovative Dante product. This award-winning audio over IP networking solution is being used widely across the professional live sound, commercial installation, broadcast, and recording industries globally. Unfortunately, the pandemic has hit its sales incredibly hard this year, which has ultimately weighed heavily on the Audinate share price. I think this could be a buying opportunity and expect demand for its products to increase materially when things return to normal.
Another small cap to consider buying is Bigtincan. It is a provider of enterprise mobility software which allows sales and service organisations to increase their sales win rates and reduce costs. Its platform has been attracting a lot of attention from some of the world’s biggest companies, which has supported very strong recurring revenue growth. Over the last year or so, Bigtincan has signed agreements with sports giant Nike, global beauty retailer Sephora, and energy drink Red Bull. I believe this is a testament to the quality of its product and feel that it bodes well for its performance in the coming years.
A final small cap share to look at is Whispir. It is a software-as-a-service communications workflow platform provider. Whispir’s industry-leading software platform allows companies to deliver actionable two-way interactions at scale using automated multi-channel communication workflows. This means companies can make their operations more efficient and cut down the number of service desk support calls. As with Bigtincan, it counts a number of blue chips as customers. This includes companies such as AIA Insurance, Disney, and Foxtel.
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
In this FREE STOCK REPORT, Scott just revealed what he believes are the 3 ASX stocks for the post COVID world that investors should buy right now while they still can. These stocks are trading at dirt-cheap prices and Scott thinks these could really go gangbusters as we move into ‘the new normal’.
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*Returns as of 6/8/2020
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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 and recommends BIGTINCAN FPO and Whispir Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of AUDINATEGL FPO. The Motley Fool Australia has recommended AUDINATEGL FPO, BIGTINCAN FPO, and Whispir 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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Unfortunately, it looks as though interest rates are going to be staying at these ultra low levels for some time to come. In light of this, I continue to believe the share market is the best place to earn a passive income.
But which ASX dividend shares should you buy this week? Here are two dividend shares I would buy right now:
Dicker Data is Australia’s leading distributor of IT hardware, software, cloud, and Internet of Things solutions with over 5,500 reseller partners. Thanks to an increasing number of vendor agreements over recent years, it now distributes a wide suite of products from the world’s leading technology vendors. These include Cisco, Citrix, Dell Technologies, Hewlett Packard Enterprise, HP, Lenovo, and Microsoft.
Due to a combination of these vendor agreements and the growing demand for information technology products, Dicker Data has delivered consistently solid earnings and dividend growth over the last few years. Pleasingly, this strong form has continued during the pandemic as demand for IT and cloud products increases thanks partly to the work from home initiative. In light of this, management expects to increase its fully franked dividend by 31% to 35.5 cents per share in FY 2020. Based on the latest Dicker Data share price, this represents an attractive 4.75% dividend yield.
A second option for income investors to consider buying right now is an exchange traded fund. I think the Vanguard Australian Shares High Yield ETF is a great option due to its focus on high yield shares. The fund is invested in a total of 66 of them, which I believe provides some much-needed diversity. Something which has proved to be very important during the pandemic.
Among its holdings you will find the banks, BHP Group Ltd (ASX: BHP), and Telstra Corporation Ltd (ASX: TLS) to name just a few. Based on the current Vanguard Australian Shares High Yield ETF share price, I estimate that it offers a FY 2021 dividend yield somewhere in the region of 4% to 5%.
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
In this FREE STOCK REPORT, Scott just revealed what he believes are the 3 ASX stocks for the post COVID world that investors should buy right now while they still can. These stocks are trading at dirt-cheap prices and Scott thinks these could really go gangbusters as we move into ‘the new normal’.
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*Returns as of 6/8/2020
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Dicker Data Limited and 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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On Friday the S&P/ASX 200 Index (ASX: XJO) finished a positive week with a day in the red. The benchmark index fell 0.6% to 6,004.8 points.
Will the market be able to bounce back from this on Monday? Here are five things to watch:
The ASX 200 looks set to start the week on a positive note. According to the latest SPI futures, the ASX 200 is poised to open the week 42 points or 0.7% higher on Monday. This is despite it being a reasonably subdued finish to the week on Wall Street. On Friday the Dow Jones rose 0.2%, the S&P 500 edged slightly higher, and the Nasdaq index fell 0.9%.
Energy producers such as Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) could start the week in the red after oil prices pulled back. According to Bloomberg, on Friday night the WTI crude oil price fell 1.7% to US$41.22 a barrel and the Brent crude oil price dropped 1.5% to US$44.40 a barrel. Demand concerns weighed heavily on prices.
The GPT Group (ASX: GPT) share price will be on watch when the real estate investment trust releases its half year result this morning. GPT owns a wide collection of properties including 12 retail centres such as Westfield Penrith and Melbourne Central. Investors will be interested to see what damage the pandemic has had on their valuations. According to CommSec, the market expects a profit of $264 million and an interim 11 cents per share dividend.
It could be a difficult start to the week for gold miners such as Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) on Monday. A rebound in the U.S. dollar put significant pressure on the gold price on Friday night. According to CNBC, the spot gold price fell 2% to US$2,028 an ounce.
Analysts at Goldman Sachs believe the IDP Education Ltd (ASX: IEL) share price can go a lot higher from here. The broker has put a buy rating and $17.00 price target on this student placement and language testing company. According to the note, Goldman acknowledges that near-term uncertainty is likely to persist, but it continues to see the longer-term structural growth profile of international education remaining robust.
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
In this FREE STOCK REPORT, Scott just revealed what he believes are the 3 ASX stocks for the post COVID world that investors should buy right now while they still can. These stocks are trading at dirt-cheap prices and Scott thinks these could really go gangbusters as we move into ‘the new normal’.
Find out the names of our 3 Post COVID Stocks – For FREE!
*Returns as of 6/8/2020
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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 Idp Education Pty Ltd. The Motley Fool Australia has recommended REA 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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Vermont Senator Bernie Sanders proposed a new one-time tax called the ‘Make Billionaires Pay’ Act which would tax 60% of wealth gains made between March 18 and January 1, 2021. Yahoo Finance’s The Final Round panel discusses the details and what it means for big name businesses.
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