• Why the Transurban share price could be a buy today

    freeway project under construction

    Transurban Group (ASX: TCL) shares are well known among ASX dividend investors. Before the coronavirus pandemic struck, Transurban was often regarded as having one of the ‘safest’ dividends on the ASX. That’s because the company is a toll-road operator and owns many of the major arterial routes in the capital cities of Sydney, Melbourne and Brisbane, among others.

    Toll roads are highly defensive assets because they are often unavoidable in the travels of individuals and businesses. Or so it seemed. Transurban shares were smashed in March as lockdown orders came into effect. The company was commanding a share price of more than $16 in February. By late March, the Transurban share price was under $10. Restrictions on travelling directly translated into far fewer cars and trucks on the road. And that meant less toll revenue for Transurban.

    Last month, the company announced its final dividend/distribution for FY2020, which will come in at 16 cents per share. That’s a substantial drop from the last 2 dividends Transurban has paid (31 and 30 cents per share respectively).

    But both the company’s business model and the Transurban share price are on the mend as we speak. At the time of writing, Transurban shares are asking $13.82.

    Transurban could be expanding

    Transurban’s portfolio of toll roads is already bulging. It owns 16 motorways in Australia and 4 in North America. Sydneysiders would be very familiar with the M2, M4, M5 East, M7, Cross City Tunnel and Eastern Distributor roads that the company owns. Similarly, Melburnians would know the Western Link, Southern Link and West Gate Tunnel (under construction). Brisbanians might be familiar with the Gateway Motorway, Logan Motorway and AirportLink.

    As you can see, Transurban has a massive footprint in the transportation networks of our major cities.

    But it looks like the company’s grip could expand even further which could be good news for the Transurban share price. According to an article in Monday’s Australian Financial Review (AFR), Transurban is in the running to acquire the remaining 49% of Sydney’s new WestConnex project. WestConnex is the brand name of a series of new tolled roads currently or recently under construction. It involves the duplication and extension of the M4 and M5 motorways, as well as a tunnel under Sydney’s Inner West that will connect the two upon completion.

    Transurban already owns the initial 51% in WestConnex, but according to the AFR, the company might be keen to shell out around another $10 billion for the remaining ‘rump stake’ and is currently involved in negotiations between the NSW government and several potential buyers.

    Is the Transurban share price a buy if the company wins WestConnex?

    If Transurban is successful in acquiring the remaining stake of WestConnex, it will almost literally have a monopoly on the tolled roads of Sydney. Monopolies are pretty nice to have in one’s share portfolio. Of course, toll roads are heavily regulated, and Transurban isn’t exactly able to charge whatever it likes for using them. But most of the company’s contracts are very generous, allowing the company to raise its tolls by 4% per year or the rate of inflation, whichever is higher. Given that inflation is currently almost non-existent, that’s a pretty good deal in my view.

    Foolish takeaway

    I’ve always liked Transurban. It’s a strong company, with a portfolio of vital infrastructure assets that I don’t see being disrupted for at least the next few decades. As such, I think it’s a great share for an ASX dividend portfolio.

    Where to invest $1,000 right now

    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.*

    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.

    *Returns as of June 30th

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    Motley Fool contributor Sebastian Bowen 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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  • Top brokers name 3 ASX 200 shares to buy today

    Buy Shares

    Many of Australia’s top brokers have been busy adjusting their financial models again, leading to the release of a large number of broker notes this week.

    Three broker buy ratings that have caught my eye are summarised below. Here’s why brokers think these ASX 200 shares are in the buy zone:

    A2 Milk Company Ltd (ASX: A2M)

    According to a note out of UBS, its analysts have retained their buy rating and NZ$22.00 (A$20.50) price target on this infant formula company’s shares. The broker believes that the company’s market share on Chinese ecommerce platforms has increased strongly over the last 12 months. It expects this to underpin further strong earnings growth in FY 2021. I agree with UBS on a2 Milk Company and would be a buyer of its shares.

    Santos Ltd (ASX: STO)

    Analysts at Morgans have retained their add rating but trimmed the price target on this energy producer’s shares slightly to $6.00. This follows the announcement of write downs relating to its GLNG operation. In addition to this it notes that Santos has reduced its oil price forecast for 2020 and 2021. Nevertheless, the broker still sees value in its shares at this level and Santos remains its top pick in the industry. While I think Morgans makes a valid point about its valuation, I would like to see oil demand strengthen before considering an investment.

    Sydney Airport Holdings Pty Ltd (ASX: SYD)

    A note out of the Macquarie equities desk reveals that its analysts have retained their outperform rating and $6.57 price target on this airport operator’s shares following its traffic update. The broker expects the spike in coronavirus cases to delay the recovery in the domestic travel market and has suggested a full recovery in passenger volumes could take a few years. However, it sees value in its shares and growth opportunities from developments and acquisitions. I agree with Macquarie and feel Sydney Airport shares would be a good long term option for investors.

    5 stocks under $5

    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!

    *Extreme Opportunities returns as of June 5th 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 A2 Milk. 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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  • Atossa Stock at $8 a Share? This 5-Star Analyst Thinks It’s Possible

    Atossa Stock at $8 a Share? This 5-Star Analyst Thinks It’s PossibleShares of Atossa Therapeutics (ATOS) have done what shares of most companies in the hunt for coronavirus solutions have done in 2020 – appreciate. Since the turn of the year, there has been 171% of upside for the Seattle-based biotech firm.Despite the impressive gains, the micro-cap still has a market cap of only $39 million. Going by his revised outlook for Atossa, Maxim’s 5-star analyst Jason McCarthy believes the stock remains seriously undervalued.McCarthy recently doubled his price target from $4 to $8. The implication for investors? Upside of a very hefty 119%. There’s no change to McCarthy’s rating, which remains a Buy. (To watch McCarthy’s track record, click here)Along with the company’s core breast cancer and mammographic breast density programs, McCarthy adds recent developments in Atossa’s battle against COVID-19 as possible catalysts to drive shares even higher.Atossa already has one COVID-19 treatment in development – AT-H201 (HOPE), for which it announced positive in vitro data in May (the drug inhibited SARS-CoV-2 from infecting VERO cells in laboratory culture). Atossa is currently awaiting FDA and IRB (institutional review board) approval to move forward with the AT-H201 HOPE study.But last week, Atossa announcedpositive results from an in vitro study of another COVID-19 drug candidate, its nasal spray AT-301. As with AT-H201, preliminary data revealed that AT-301 successfully prevented SARS-CoV-2 infection of VERO cells.The company has now partnered with Australia based Avance Clinical, to go ahead with a clinical trial expected to begin this quarter.While AT-H201 focuses on severely ill patients who need mechanical ventilation, AT-301 is being developed for use in people who have yet to exhibit any symptoms but have been tested positive for COVID-19.Although it is still early days, McCarthy believes both treatments now merit inclusion in his Atossa model.The analyst said, “We have factored in both AT-H201 and AT-301 for COVID-19. Considering the early development stage of both assets and the uncertainty in the COVID-19 therapeutic environment, we apply a higher risk adjustment, 90%, for both AT-H201 and AT-301. Furthermore, we assume both AT-H201 and AT-301 could obtain EUA approval for healthcare workers in 2021 and 2022 respectively, followed by approval for the general population in 2022 and 2023.”While in the long term, neither treatment can probably replace the need for a vaccine, both can have a part to play until a viable solution is bought to market.“These candidates, while early stage,” McCarthy said, “Could offer a more near-term solution while progress continues to be made on the vaccine front by multiple companies. A vaccine for the general population could still be 12-18+ months away.”To find good ideas for healthcare stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights. More recent articles from Smarter Analyst: * Stimulus Should Keep Boeing Afloat, But This 5-Star Analyst Remains Sidelined * Zoom: Work from Home is Here to Stay, But This Analyst Says Hold Off * Adobe, IBM Partner On Hybrid Cloud For Banking, Healthcare Industries * Logitech Ramps Up Annual Profit Outlook As Q1 Income Leaps 75%

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  • How mandatory masks could impact these ASX shares

    piggy bank wearing mask

    As of midnight tonight, Victoria will become the first state to make the wearing of masks mandatory in coronavirus lockdown regions. In addition, the Australian Medical Association has also called for the national cabinet to establish a nationwide mask policy.

    As a result of these measures, the demand for face masks has gone through the roof. Over the weekend, it was reported that Chemist Warehouse stores in Victoria sold 1.5 million masks.

    Here are some ASX shares that have exposure to face masks and which could benefit from the surge in demand.  

    ASX shares that could benefit from mandatory face masks 

    Australian Pharmaceutical Industries Ltd (ASX: API)

    According to an article in yesterday’s The Australian, Australian Pharmaceuticals (API), which operates the Priceline Pharmacy chain, saw a 30-fold increase in demand for face masks. In order to ease the panic buying, the company assured customers that there are sufficient masks in stock to meet demand.

    In late April, the company released its half year results for FY20, with API highlighting increased demand as a result of the pandemic. Despite the surge in demand, the API share price is still trading nearly 18% lower for the year.

    Wesfarmers Ltd (ASX: WES)

    Wesfarmers could be another ASX share to watch as the company’s subsidiary Bunnings experiences a surge in demand for face masks. As a result of the soaring demand, Bunnings has placed a purchase limit on the product with customers only allowed to purchase a maximum of 50 masks.

    In addition to face masks, Wesfarmers also has exposure to other trends seen during the pandemic. The company’s Officeworks stores have seen a surge in demand as consumers establish home offices, whilst Bunnings has also benefitted from the increased interest in home improvements and DIY projects.

    Ansell Limited (ASX: ANN)

    Ansell is a global leader in manufacturing and distributing health and safety protection solutions. The company operates in the industrial and healthcare sectors and could see continued growing interest in its personal protective equipment.

    In its market update in late March, Ansell informed investors that the company had seen very strong demand for its AlpahaTec hand and body protection products, whilst also seeing a surge in demand for single-use and surgical gloves.

    Keep an eye on these ASX shares

    The mandatory order to wear masks in Victoria comes as the state recorded its highest daily number of COVID-19 cases earlier today. With fears of a second wave of infections spreading across the country, the demand for facial masks and other protective equipment could see a renewed surge.  

    Although the demand for face masks won’t turn the companies listed here into automatic market darlings, it does highlight the essential nature of their products and also reflects the changes in consumer behaviour. As a result, I think it’s important for investors to keep an eye on these defensive companies and create a watchlist of other auxiliary services.

    Where to invest $1,000 right now

    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.*

    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 Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Wesfarmers Limited. The Motley Fool Australia has recommended Ansell 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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  • 3 ASX fintech shares with exciting growth prospects

    woman touching digital screen stating fintech

    The ASX fintech sector has been on fire in recent months, driven in particular by the booming buy now, pay later (BNPL) shares. The number of ASX listings in this segment only continue to grow.

    Here we take a closer look at three fintech shares that I believe have strong potential for growth over the next few years.

    3 ASX fintech shares to consider adding to your portfolio

    Sezzle Inc (ASX: SZL)

    BNPL provider Sezzle is listed on the ASX, however its operations are based in the United States. The Sezzle share price has surged in recent months, increasing from 37 cents in late March to now be trading at $7.54.

    Sezzle’s rapid recent growth continued during the second quarter. The company reported underlying merchant sales (UMS) of A$272.3 million during the quarter. That’s a 58% increase quarter on quarter and a whopping 349% year on year. The coronavirus pandemic has actually assisted, not hindered the BNPL sector, due to a surge in online shopping.

    Sezzle continues to raise capital to support its rapid expansion strategy. In mid-July, it raised $79.1 million via the issue of 14.9 million shares.

    Tyro Payments Ltd (ASX: TYR) 

    ASX fintech share, Tyro Payments, provides payment solutions for credit and debit card transactions to Australian businesses. The Tyro share price was hit hard during the early phase of the coronavirus pandemic. It fell from $4.49 in February to 97 cents in late March. Since then, it has regained most of those losses, driven by the easing of lockdown restrictions.

    Tyro saw a 15% increase in transactions during FY 2020 compared to FY 2019. Overall, transactions fell during April and May, but were back in positive territory in June.

    EML Payments Ltd (ASX: EML)

    EML Payments is an electronics technology solutions provider. It initially offered just gift cards and pre-paid cards. However, its product range now extends to salary packaging, digital banking products and gaming.

    Revenue for the nine months ending 31 March increased by 20% on the prior corresponding period to $87.1 million. EBITDA also grew strongly by 24% during this period.

    The EML Payments share price grew very strongly during 2019 and early 2020, but was hit hard during the first wave of the pandemic. Since then, its share price has partially recovered but is still trading significantly lower than the $5.66 we saw in mid-February. Business activity is likely to pick up in the months ahead as the economy comes back to life, which could see the EML share price recover further.

    Foolish takeaway

    In my view, Sezzle, Tyro Payments and EML Payments are 3 ASX fintech shares that all have strong future growth prospects over the next few years. The provider that I would pick as having the fastest growth trajectory is Sezzle, due to the current rapid growth of the BNPL sector.

    5 stocks under $5

    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!

    *Extreme Opportunities returns as of June 5th 2020

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    Phil Harpur has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Tyro Payments. The Motley Fool Australia owns shares of and has recommended Emerchants Limited. The Motley Fool Australia has recommended 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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  • Why Baby Bunting, Beach Energy, QBE, & Resolute shares are pushing higher

    shares higher, growth shares

    In afternoon trade the S&P/ASX 200 Index (ASX: XJO) is on course to give back a lot of yesterday’s strong gains. At the time of writing the benchmark index is down 1.1% to 6,088.4 points.

    Four shares that have not let that hold them back are listed below. Here’s why they are pushing higher:

    The Baby Bunting Group Ltd (ASX: BBN) share price is up 8% to $3.40. Investors have been buying the baby products retailer’s shares after the release of its unaudited preliminary full year results. Baby Bunting delivered a 12% increase in total sales to $405 million and expects to post a 29% to 35% lift in pro forma net profit after tax to between $18.5 million and $19.5 million. A key driver of its growth was strong online sales during the second half.

    The Beach Energy Ltd (ASX: BPT) share price is up 5% to $1.56. This follows the release of the energy company’s fourth quarter and full year production update. Beach Energy reported total fourth quarter production of 6.8 MMboe, bringing its full year production to a total of 26.7 MMboe. This represents a 2% increase on FY 2019 pro forma production of 26.2 MMboe. And although its sales slumped because of the oil price collapse, the decline wasn’t as bad as many feared.

    The QBE Insurance Group Ltd (ASX: QBE) share price is up 2% to $9.84. This morning the insurance giant revealed an update on its expectations for the first half of FY 2020. QBE now expects to report a first half combined operating ratio of around 104%, which reflects COVID-19 impacts of around $335 million, adverse catastrophe experience of around $60 million, and adverse prior accident year claims development of around $120 million.

    The Resolute Mining Limited (ASX: RSG) share price has jumped 11% to $1.38. Investors have been buying the gold miner’s shares after the release of its second quarter update. During the quarter, Resolute achieved gold production of 107,183 ounces at an all-in sustaining cost (AISC) of US$1,033 an ounce. This means it is on course to achieve its FY 2020 guidance of 430,000 ounces at an AISC of US$980 an ounce. Resolute also revealed an average realised price of US$1,446 an ounce for the period.

    5 stocks under $5

    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!

    *Extreme Opportunities returns as of June 5th 2020

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    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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  • BHP’s share price tumbles with this other ASX miner after being hit by broker downgrades

    miners in front of mining truck

    The BHP Group Ltd (ASX: BHP) share price tumbled this morning after brokers downgraded the stock along with another ASX miner.

    Shares in the Big Australian tanked 2.9% to $37.70 at the time of writing while the S&P/ASX 200 Index (Index:^AXJO) fell 1%.

    BHP is also underperforming its peers. The Rio Tinto Limited (ASX: RIO) share price slipped 1.2% to $104.85 while the Fortescue Metals Group Limited (ASX: FMG) share price fell 1.9% to $16.43.

    Hit by two downgrades

    BHP is worst for wear as not one, but two brokers cut their rating on the stock. Citigroup lowered its recommendation on the stock to “neutral” from “buy” following the release of the miner’s quarterly production report.

    “In terms of Citi expectations, [June quarter production] was better than expected in Copper and Iron Ore but weaker in Metallurgical and Energy Coal and Petroleum,” said the broker.

    “FY20 Underlying NPAT revised down 10% to $9.1bn given FY20 prodn and financial impacts.”

    Despite this, Citi kept its price target on BHP at $40 a share but with the stock trading close to this target, BHP couldn’t still be seen as a buy.

    Looking fully valued

    Meanwhile, Morgans also cut its rating on the miner to “hold” from “add” even though it thought BHP’s quarterly was “strong”. Only petroleum output failed to meet its expectations.

    “WAIO production of 76mt was 5% above our estimate, while copper came in 9% ahead of our estimate at 414kt,” said Morgans who lifted its price target to $37.20 from $36.70 a share.

    However, BHP’s recent share price outperformance means there’s little valuation upside left to justify a more bullish rating from the broker.

    Losing its shine

    Meanwhile, the Perseus Mining Limited (ASX: PRU) slumped by over 3% at the time of writing. It too suffered a broker’s downgrade following its quarterly production update.

    Credit Suisse lowered its recommendation on the gold miner to “underperform” (which means a sell) from “neutral” even as it increased its 12-month price target to $1.30 from $1.11 a share.

    Perseus produced 65,000 ounces of gold in the final quarter of FY20 to take the full year gold output to 258,000 ounces.

    Production and cost missed targets

    This is below management’s earlier guidance of 275,000 to 295,000 ounces, which was subsequently withdrawn due to the COVID-19 pandemic.

    This isn’t the only disappointment. The miner’s all-in sustaining cash cost for FY20 came in at US$972 an ounce when management was aiming for US$850 to US$950 per ounce.

    “A modestly disappointing operating quarter from persistently challenging Edikan which was responsible for the 6% shortfall vs withdrawn group guidance,” said the broker.

    “Sissingue continues to perform well, although its recent grade undercall is a minor concern (overall recovered reconciliation to date positive).”

    If you are looking for stocks with better upside, you might want to download this free report from the experts at the Motley Fool.

    They’ve picked some of their best ASX share buys for FY21 and you can find out what these are by following the link below.

    5 stocks under $5

    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!

    *Extreme Opportunities returns as of June 5th 2020

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    Motley Fool contributor Brendon Lau owns shares of BHP Billiton Limited and Rio Tinto 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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  • Damstra share price jumps 14% following strong quarterly report

    Woman investor looking at ASX financial results on laptop

    The Damstra Holdings Ltd (ASX: DTC) share price is surging following the release of its strong quarterly activities report. In morning trade the workplace management solutions shares were up 14.5% to $1.83.

    How did Damstra perform in the fourth quarter?

    Damstra performed very well in the fourth quarter despite the more negative outlook due to COVID-19. This was seen as users increased over the period, up from 320,000 at the end of FY19 to 404,000. The number of clients also increased by 116% to 279.

    Strong performance across the business delivered revenue and other income on an unaudited basis of $22 million, up 38% from FY19. Recurring revenue represented 91% of operating revenue in FY20.

    In regards to earnings, EBITDA for FY20 is expected to be $5.6 million. This is ahead of the previously stated guidance and, according to Damstra, demonstrates the delivery of attractive unit economics and strong operating leverage. The operating cash to earnings conversion for FY20 was 93%.

    Damstra announced normalised positive operating cash flow of $1.9 million for the quarter, a growth of 760% compared to the prior corresponding period. However, this was down from the $3 million announced last quarter.

    Normalised cash receipts also fell from Q3 down $1.6 million to $5.6 million. However, compared to the same quarter last year this result was up 57%.

    The company maintains a healthy cash balance of $10.4 million, including the costs of recent acquisitions.

    Damstra CEO, Christian Damstra, was particularly pleased with the company’s performance during these trying times, stating:

    “Damstra has demonstrated great resilience in these trying times, and we are incredibly pleased with our results, especially the innovation in new products that we have launched to our clients. We see a structural tailwind and, given our resilient business model, we believe we are strategically wellplaced to navigate the disruptions caused by COVID-19. In Australia, strong future growth should be underpinned by future infrastructure investments from federal and state governments as part of post COVID-19 economic policies.”

    What now for Damstra?

    Damstra continued to demonstrate its importance as a critical business tool during COVID-19, with customers continuing to use its products. There has been increased demand for Damstra’s services across mining, construction, and telecommunications. This has been underpinned by continued product innovation, and new client wins both internationally and in Australia. It is important moving forward that the three businesses acquired during FY20 integrate effectively, with expanded products offering positions to accelerate cross-selling opportunities during FY21.

    Finally, investors will be eagerly awaiting the acquisition of Vault Intelligence Limited (ASX: VLT) that was announced earlier this year. It is expected to be concluded by the end of October 2020.

    5 stocks under $5

    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!

    *Extreme Opportunities returns as of June 5th 2020

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    Daniel Ewing has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Damstra Holdings Ltd. The Motley Fool Australia has recommended Damstra Holdings 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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  • ‘Testing is at a level we never contemplated’ prior to COVID-19: Change Healthcare CEO

    'Testing is at a level we never contemplated' prior to COVID-19: Change Healthcare CEOIn states like California, Florida and Kentucky, confirmed cases of COVID-19 are increasing each day. Yahoo Finance’s Alexis Christoforous and Brian Sozzi speak to Neil de Crescenzo, Change Healthcare CEO about COVID-19 testing, future of technology in healthcare and much more.

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  • 3 Warren Buffett dividend shares you can buy today

    warren buffett

    There are some ASX dividend shares that you can buy right now that Warren Buffett would probably want in his own portfolio. If he focused on ASX shares. 

    I think Warren Buffett is one of the greatest investors in the world. He has a particular investment style which has worked wonderfully over the decades. He only invests in what he can understand, which helps him avoid some blow-ups.

    Here are three dividend shares that could be good long-term picks for income:

    Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

    Soul Patts is one of the best dividend shares on the ASX in my opinion. It’s actually fairly similar to Berkshire Hathaway in terms of how it operates.

    Both of them invest for the long-term in listed and unlisted businesses. Whilst Berkshire Hathaway is invested in businesses like Apple and US banks, Soul Patts is invested in businesses like TPG Telecom Ltd (ASX: TPG), Australian Pharmaceutical Industries Ltd (ASX: API) and Clover Corporation Limited (ASX: CLV). Some of Soul Patts’ unlisted investments include resources, agriculture and swimming schools.

    Soul Patts has actually been listed since 1903, so it has excellent longevity. I think it’s the type of business that you could own forever. I certainly plan to be a very long-term shareholder. Warren Buffett’s favourite holding period is forever.

    In terms of being a dividend share, it has great credentials. It has paid a dividend every year in its listed life going back to 1903. Soul Patts has increased its dividend each year since 2000. It has guided that it plans to increase its dividend later this year, despite COVID-19.

    Soul Patts has a grossed-up dividend yield of 4.2%.

    Brickworks Limited (ASX: BKW)

    I think Brickworks is another of the best dividend shares on the ASX. I think it’s a Warren Buffett share because Clayton Homes is one of the larger divisions of Berkshire Hathaway. There will always be long-term demand for quality property-related services and products in my opinion.

    Interestingly, Brickworks is actually one of Soul Patts’ largest investment positions and Brickworks owns a large amount of Soul Patts shares. The Soul Patts investment is one of the main reasons why Brickworks has been able to pay a reliable dividend to shareholders. Brickworks has seen pleasing growth in the capital value of its Soul Patts shares as well as rising dividend payments.

    Brickworks also owns a 50% stake of a quality industrial property trust, along with Goodman Group (ASX: GMG). The idea is to build high quality industrial properties which are benefiting from the growth of e-commerce and the need for better logistics for many businesses. Two huge warehouses will soon be built for Amazon and Coles Group Limited (ASX: COL) which should materially increase the rent and valuation of the property trust.

    Brickworks is a great dividend share because its dividend is sustained just from the two segments I’ve mentioned, which pay very defensive cashflow to Brickworks. The property trust and Soul Patts shares alone fund Brickworks’ current dividend.

    Brickworks hasn’t cut its dividend for over 40 years. The dividend share currently has a grossed-up dividend yield of around 5%.

    The business also has the potential to make large earnings in the fuure from its building product divisions once COVID-19 is over, particularly in the US. I think the best time to buy cyclical shares is as close to the bottom of the cycle as you can (in share price terms).

    APA Group (ASX: APA)

    APA Group is another Warren Buffett dividend share pick in my opinion. Berkshire Hathaway Energy and railroads are two of the largest businesses within Buffett’s business. I think APA is somewhat a mix of these two businesses.

    The business owns a vast network of 15,000km of natural gas pipelines around Australia with a presence in every mainland state and the Northern Territory. It also owns or has interests in gas storage facilities, gas-fired power stations and renewable energy generation (wind and solar farms). APA owns, or manages and operates, a portfolio of assets worth more than $21 billion and delivers half the nation’s natural gas usage.

    The business boasts of very reliable annual cashflow. APA’s distribution is funded from that cashflow. That cashflow is steadily growing as APA invests into new energy projects which should boost cashflow further.

    APA has grown its distribution every year for the past decade and a half. It currently has a distribution yield of 4.5%.

    Foolish takeaway

    I think Warren Buffett would like all three of these ASX dividend shares. Considering nearly all of Warren Buffett’s wealth is tied up in Berkshire Hathaway shares, I think he’d probably go for Soul Patts with its good internal diversification. It would be my pick as well.

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    Tristan Harrison owns shares of 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. The Motley Fool Australia owns shares of APA 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.

    The post 3 Warren Buffett dividend shares you can buy today appeared first on Motley Fool Australia.

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