Volatility is a funny word. When we hear it we don’t think of our portfolio dropping by, say, 40%. Yet if you can withstand swings like this then there are some great investment opportunities available to you. I believe these are the best shares to buy for growth in today’s market.

Although $4,000 sounds like a lot when you are starting out, it is about the limit that I would dedicate to higher-risk activities like investing in growth shares. I would invest $4,000 evenly among the 5 shares below. 

The roaring fintechs

Australia has a fantastic fintech economy. In fact, Afterpay Ltd (ASX: APT) and Xero Limited (ASX: XRO) are 2 world-class fintechs. Within this sector, I think the following 2 companies are the best shares to buy.

Sezzle Inc (ASX: SZL) is a great share with a fantastic sales track record. In addition, this buy now pay later company has a great strategy to target millenials and Gen Z, customers.  It is also a native of the USA, the world’s largest potential buy now pay later retail market at US$5 trillion. I would place $1,000 into Sezzle.

Pushpay Holdings Ltd (ASX: PPH) runs donor management systems for faith-based, non-profit and education organisations. They are already across Australia, Canada and the USA. As with Sezzle, if you are going to build donor management systems for faith-based communities, then the US is the market to be in. I would invest $1,000 in Pushpay.

Best shares to buy in tech

If you are investing purely for growth then these 2 shares are ones I would look at very seriously.

Electro Optic Systems Hldg Ltd (ASX: EOS) is a technology company based in the defence and space industries. It is quite an amazing company and I had no idea that we had anything like this. Its primary focus is in sensor technology. It’s developing the technology to help with over 500,000 pieces of space debris travelling at around 30,000 km per hour. The company also develops weapons systems. 

Altium Limited (ASX: ALU) is the PCB design software manufacturer that is domiciled in the USA. It is a proven market player and has been able to grow sales, on average, around 16% every single year for the past 10 years. I believe that it is still growing into the market space and the share price is likely to continue to see decent growth.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• Afterpay share price on watch after reaching 1 million UK customers
• Invest like Warren Buffett by buying and holding these ASX 200 shares
• Where to invest $500 into ASX shares right now
• Afterpay share price up 550% since February. Is it too late to buy?

Daryl Mather owns shares of Electro Optic Systems Holdings Limited and Sezzle Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Altium, Electro Optic Systems Holdings Limited, and Xero. The Motley Fool Australia owns shares of and has recommended PUSHPAY FPO NZX. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Electro Optic Systems Holdings Limited and Sezzle 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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Trading in Cromwell Property Group (ASX: CMW) was temporarily paused Tuesday morning pending an announcement. The announcement, released at 10:06 am, related to an off-market proportional takeover bid from ARA Asset Management Limited (ARA). By close of trade Tuesday, the Cromwell share price had jumped 8.05% to 94 cents.

Why did the Cromwell share price jump?

Cromwell shares rallied following news that ARA intends to acquire 29% of all Cromwell stapled securities in which it does not already hold an interest. If successful, this would take ARA’s stake in Cromwell to 52.6%. The offer price of 90 cents per share was slightly higher than Monday’s closing price of 87 cents. According to Cromwell, ARA proposed it would execute the partial takeover by acquiring 29 out of every 100 Cromwell shares it doesn’t already own. 

Cromwell Property Group announced the following in relation to the proportional takeover offer:

“Cromwell securityholders are advised to take no action in relation to the proportional offer. Cromwell notes the unsolicited and opportunistic nature of the proportional offer and that the proportional offer is not an offer to acquire all securities held by securityholders in Cromwell. Cromwell will provide a further announcement in due course when it has evaluated and assessed the terms of the proportional offer.”

The announcement went on to state “In the interim, Cromwell will continue to operate and execute its business strategy in the ordinary course as previously flagged to the market on 4 June 2020”.

What did ARA say?

In its letter to Cromwell, ARA boasted that “the offer price is a premium to Cromwell’s recent trading prices despite ongoing market volatility”. The offer represented a 9.8% premium to the company’s 30-day volume weighted average price of 82 cents.

ARA already has an existing interest in Cromwell securities of 24%. The asset manager wrote “Given Cromwell’s elevated gearing levels in conjunction with the uncertainty surrounding rental collections and asset values as a result of COVID-19, ARA is concerned that Cromwell will seek to undertake a material equity raising at a discount to the offer price”.

It also suggested that the likelihood of a competing offer was reduced due to ARA’s existing 24% stake in Cromwell.

What’s next for the Cromwell share price?

The Cromwell share price is up 38.2% from its 52-week low of 68 cents. It’s also down 25% since this time last year and nearly 30% below its 52-week high of $1.35 reached in November 2019. 

The proportional takeover bid could play out in a number of ways. Overall, however, it should be positive for shareholders. At the current bid, it seems unlikely that shareholders will accept given the Cromwell share price is now already above 90 cents. However, a new higher bid may be accepted by shareholders enabling ARA to take its holding to above 50%. 

If ARA is successful in obtaining a holding greater than 50%, it will have the ability to appoint board members. This would then enable the asset manager to execute its own strategies for Cromwell Property. As suggested yesterday, this would likely include blocking any potential capital raisings. 

Previously on 2 March, Cromwell released an announcement suggesting that ARA was attempting a ‘takeover by stealth’. Cromwell’s management also clashed with the asset manager over its attempt to elect an appointed nominee to the board three months after his appointment had been struck down at the AGM. At this time Cromwell also stated that shareholders should take no action in response to approaches by ARA.

Stay tuned…

More reading

• ASX 200 finishes higher, Woolworths gives update

Motley Fool contributor Chris Chitty 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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If you’re interested in small cap shares, then you might want to take a look at the one talked about below.

It is a firm favourite of the Ellerston Australian Micro Cap Fund and it certainly can pay to listen to what this fund manager says.

Over the last 12 months the fund has provided investors with a 15.3% return after fees, which compares to a 2.9% decline by the benchmark S&P/ASX Small Ordinaries Accumulation Index.

This outperformance doesn’t appear to be a fluke either, with the fund returning an average of 16.5% per annum over the last three years. As a comparison, the benchmark index has provided a 7.5% per annum return over the same period.

Which shares does the Ellerston Australian Micro Cap Fund like?

In a recent update, portfolio managers David Keelan and Alexandra Clarke revealed that its portfolio remains skewed towards high-quality shares which they believe can endure a challenging macro environment.

This includes the technology sector and particularly companies with sustainable competitive advantages and structural tailwinds.

One of those is wagering service business Betmakers Technology Group Ltd (ASX: BET). It uses its proprietary technology to provide risk management systems, odds management, and content across a number of sports.

The portfolio managers commented: “The company boasts an exclusive 10- year agreement to manage fixed odds horse racing in New Jersey, and this was recently expanded to include a 5-year agreement to manage fixed odds terminals and kiosks at Monmouth Park racetrack.”

And although the Betmakers share price is up over 200% in 2020, the fund managers still see meaningful upside in the future.

“Fixed odds racing should benefit from a structural migration away from tote betting, a similar narrative to that which has already played out in Australia, and BET is well placed to capitalise on this. The company is on the verge of EBITDA profitability, has an extensive pipeline of opportunities, and we see meaningful upside to the current price,” they concluded.

More reading

• Best growth shares to buy with $4,000
• Why the Cromwell share price soared higher yesterday
• Is the Macquarie share price a buy?
• Forget term deposits! These ASX dividend shares are better
• 5 things to watch on the ASX 200 on Wednesday

Motley Fool contributor James Mickleboro 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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Is the Macquarie Group Ltd (ASX: MQG) share price a buy?

Macquarie shares have been on a rollercoaster since the COVID-19 share market selloff began. Between 21 February 2020 and 23 March 2020, the global investment bank’s share price dropped 52.5%. But since that low on 23 March 2020 it has risen 68.8%.

Despite that strong recovery the Macquarie share price is still down 20% from the pre-coronavirus high.

What’s going on for Macquarie?

As a global investment bank, Macquarie is obviously quite dependent on a decent global economy to maintain good performance.

In its FY20 result Macquarie was impacted by higher credit charges and impairments relating to the potential economic impacts of the coronavirus pandemic. In the second half of FY20 it recognised credit and impairment charges of $901 million, up from $139 million in the first half of FY20 and up from $476 million in the second half of FY19.

The COVID-19 provisions were a large reason why the second half profit of FY20 came in at $1.275 billion, down 13% from the first half of FY20 and down 24% on the second half of FY19.

However, Macquarie remains in a strong financial position. At 31 March 2020 it had record surplus capital of $7.1 billion, up from $6.1 billion at 31 March 2019. Its common equity tier 1 (CET1) capital ratio was 12.2% at 31 March 2020, up from 11.4% at 31 March 2019.

Macquarie deliberately strengthened the balance sheet during FY2020. It raised $1.7 billion in a capital raising from institutional investors and retail investors. It also increased its proportion of term funding and deposits. Total customer deposits increased 20% to $67.1 billion at 31 March 2020.

Macquarie outlook?

I think that Macquarie still has a very promising future. Each Macquarie has a different outlook in the current circumstances. Combined, the results of the below four divisions will impact where the Macquarie share price will go. 

Macquarie Asset Management (MAM) is one of the biggest infrastructure asset managers in the world. Thankfully, base management fees are expected to be ‘broadly’ in line with last year. However, MAM’s other operating income is expected to be significantly down due to expected delays in the timing of asset sales.

Macquarie’s banking and financial services is expecting to keep growing deposit and loan volumes, but there is a lot of competition in the sector which could hurt margins.

The commodities and global markets (CGM) division is anticipating lower customer activity, particularly in commodities – however volatility could create opportunities. The product and client sector diversity is expected to provide some support through the uncertain economic conditions in the first half of FY21.

Macquarie Capital expects the challenging market conditions to reduce the number of successful transactions and increase the time to completion. Investment-related income is expected to be lower from lower asset realisations, but it should benefit with the market recovery.

Time to buy Macquarie shares at this price?

It’s very difficult to estimate what FY21 will be like for Macquarie. It’s hard to say where the Macquarie share price will go in the short-term. There is so much uncertainty for the global economy. Macquarie earns around two thirds of its profit overseas, which is where most of the COVID-19 damage is currently taking place.

Macquarie itself wasn’t able to provide FY21 profit guidance.

I think Macquarie is one of the best blue chips on the ASX. It ended up cutting its final FY20 dividend, partially due to APRA guidance, but I believe it will be a solid dividend share for the long-term.

Macquarie has high-quality management and a long-term focus. I like that the business can allocate money to any part of the business across the world where the growth potential might be. I’d prefer to invest in Macquarie compared to an ASX bank like Westpac Banking Corp (ASX: WBC). I do think it’s a long-term opportunity, but there may also be more volatility later this year, particularly around the US election. There are plenty of ASX shares I’d rather buy over Macquarie at this share price. 

More reading

• Macquarie and 2 other ASX shares you’re missing out on
• ASX 200 Weekly Wrap: ASX back in the green
• What is the price/earnings (p/e) ratio?
• Consider these blue chip ASX shares for strong dividend yields
• Brokers just upgraded these ASX 200 stocks to “buy” today

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie 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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Instead of putting your money into term deposits which provide only paltry interest rates, I would suggest you look at some of the quality dividend shares the ASX has to offer.

Three which I think would be great alternatives to term deposits are listed below. Here’s why I like them:

Commonwealth Bank of Australia (ASX: CBA)

I think this banking giant is a top dividend share to consider buying. Although Commonwealth Bank will almost certainly cut its dividend materially in FY 2021, I believe it will still offer an above-average yield. At present I believe a fully franked dividend of $3.70 per share is possible next year, which equates to an attractive fully franked 5.35% yield. This estimate could prove to be conservative if the economic damage from the pandemic isn’t as bad as first feared.

Rio Tinto Limited (ASX: RIO)

If you’re not averse to buying mining shares, then Rio Tinto could be a top option for income investors. This is because the high prices that iron ore is commanding at present, thanks to strong demand and supply constraints, means the mining giant is well-placed to deliver strong profits in FY 2020 and FY 2021. And given the strength of its balance sheet, I suspect the company will return the majority of its free cash flow to investors through dividends. In light of this, I estimate that its shares offer a forward fully franked dividend yield of at least 5%.

Transurban Group (ASX: TCL)

Another dividend share to look at buying is Transurban. I think the toll road operator could be a great option for income investors due to the quality of its portfolio and its positive long term outlook. In a recent update, Transurban revealed that its traffic volumes are improving greatly. I believe this bodes well for FY 2021 and could mean a distribution close to normal levels again. At present I estimate a dividend of 49 cents per unit next year, which equates to a 3.3% distribution yield.

More reading

• Should you buy ANZ, CBA, NAB, or Westpac? Here’s what this broker thinks
• Is the Afterpay share price a boom or a bubble?
• ASIC hits Commonwealth Bank with civil proceedings
• 5 things to watch on the ASX 200 on Tuesday
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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 Transurban Group. 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 Tuesday the S&P/ASX 200 Index (ASX: XJO) fought hard to carve out a solid gain. The benchmark index climbed 0.2% to 5,954.4 points.

Will the market be able to build on this on Wednesday? Here are five things to watch

ASX 200 poised to rise.

The ASX 200 looks set to push higher on Wednesday after a positive night of trade for U.S. stocks. According to the latest SPI futures, the benchmark index is expected to rise 4 points or 0.1% at the open. Overnight on Wall Street the Dow Jones rose 0.5%, the S&P 500 pushed 0.4% higher, and the Nasdaq index climbed 0.7%. U.S. stocks lifted amid optimism that a trade deal with China isn’t over.

Oil prices tumble.

Concerns over weakening demand for oil weighed on prices and could weigh on the likes of Oil Search Ltd (ASX: OSH) and Santos Ltd (ASX: STO) on Wednesday. According to Bloomberg, the WTI crude oil price is down 1.3% to US$40.21 a barrel and the Brent crude oil price is 1.3% lower to US$42.54 a barrel.

Gold price jumps again.

Gold miners such as Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) could be on the rise today after the gold price jumped higher. According to CNBC, the spot gold price is up 1.1% to US$1,785.50 an ounce after the U.S. dollar weakened. The precious metal is now trading at its highest level since October 2012.

Afterpay UK update.

The Afterpay Ltd (ASX: APT) share price will be on watch on Wednesday after a late announcement by the payments company. Afterpay revealed that its UK-based Clearpay business now has over 1 million active customers on its platform after a year in the country. Another positive is that management notes that consumers are using its platform more frequently than they were in the U.S. at the same stage.

Coles given buy rating.

The Coles Group Ltd (ASX: COL) share price could be heading a lot higher from here according to analysts at Goldman Sachs. After looking through updates from two of its rivals this week, the broker has lifted its fourth quarter forecasts to reflect stronger than expected industry growth trends. Goldman has a conviction buy rating and $18.60 price target on its shares.

More reading

• Afterpay share price on watch after reaching 1 million UK customers
• ASX 200 finishes higher, Woolworths gives update
• Invest like Warren Buffett by buying and holding these ASX 200 shares
• Why James Hardie is a favourite buy among leading brokers
• Why top brokers are urging you to buy SEEK and these other ASX stocks today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO and COLESGROUP DEF SET. 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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