The Fortescue Metals Group Limited (ASX: FMG) share price was on form on Tuesday and pushed higher again.

The iron ore producer’s shares climbed over 1% to reach a record high of $15.56.

This latest gain means the Fortescue share price is now up a massive 44% since the start of the year.

As a comparison, the S&P/ASX 200 Index (ASX: XJO) is down 11% over the same period.

Why did the Fortescue share price hit a record high?

Investors were buying Fortescue’s shares on Tuesday after the iron ore price jumped higher again.

The good news for shareholders is that the price of the steel making ingredient has continued its rise overnight. According to CommSec, the spot iron ore price rose a further 0.5% to a lofty US$112.40 a tonne.

The strong rise in the iron ore price this year has been driven by supply disruptions in Brazil and stronger than expected demand in China. The latter is been caused by the Chinese government’s efforts to boost economic growth after the pandemic.

How profitable is Fortescue?

With iron ore prices at these sky high levels, Fortescue’s Pilbara-based operations are now extremely profitable.

For example, during the third quarter, Fortescue shipped 42.3 million tonnes of iron ore at a cost of US$13.27 per wet metric tonne.

And while Fortescue’s iron ore doesn’t command the full spot price due to its lower (but improving) grades, it is still generating material free cash flows.

Is it too late to invest?

While I have a preference for BHP Group Ltd (ASX: BHP) due to its diversified operations and growth opportunities, I still feel Fortescue could be a good option even after its strong rise this year.

Especially if you’re an income investor. Given the strength of its balance sheet and the high level of free cash flow it is generating, I expect Fortescue to reward shareholders with bumper dividends this year and next.  

More reading

• 3 blue chip ASX 200 dividend shares to buy in the next market correction
• Macquarie picks ASX stocks that can deliver positive earnings surprises next month
• Is the gold price too high for investing in ASX gold shares?
• Why the Fortescue share price rallied over 40% to a record high in 2020
• 3 ASX shares with incredible cost moats

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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Woodside Petroleum Limited (ASX: WPL) has announced a multi-billion dollar hit to its asset base after trading on Tuesday. In summary, the company is expected to recognise non-cash, post-tax impairment losses of US$4.37 billion (~$6.2 billion AUD) across most of the company’s assets. Specifically, US$2.76 billion for oil and gas properties and an additional US$1.16 billion for exploration and evaluation assets. Lastly, it includes a post-tax onerous contract provision for the Corpus Christi LNG sale and purchase agreement of US$447 million.

This follows the A$570 million write down announced yesterday by Oil Search Limited (ASX: OSH). In addition, there have been revisions by numerous international oil and gas companies. BP in particular commented that it believed the coronavirus crisis would accelerate the shift away from fossil fuels. However, Woodside has stated that its balance sheet is “not materially impacted” by the impairment. 

Causes of the impairment

The company revealed low oil and natural gas prices caused 80% of the impairment losses. Oil prices have been conservatively assumed up to 2025. Additional contributors are long term demand uncertainty from Covid-19 and increased risk of higher carbon pricing.

Woodside insists that the fundamentals of its business remain strong. In particular, that LNG is part of a decarbonising world and a continuing strong outlook for its core product, natural gas to Asia. The company also spoke of its planned move into hydrogen and ammonia. 

Management commentary

Woodside CEO Peter Coleman said the company is in a strong position to take advantage of opportunities, which will inevitably arise.

“We’ve taken some tough decisions over recent months in response to the COVID-19 pandemic and oversupply in our key markets, but Woodside’s focus remains on cash preservation, capital discipline, and maintaining the strength of our balance sheet. This will ensure we can deliver appropriate returns to shareholders and maintain our investment grade credit rating over the long term.”

“…The unique confluence of events that has unfolded through 2020 will challenge all participants in the global energy sector and we expect to see adjustment of capital allocation priorities by other asset owners as the cycle plays out…”

The company’s forward oil price estimates are for US$44 in FY21 and US$55 in 2022. 

Woodside share price

The Woodside share price is currently trading at a price to earnings ratio of 40.69. This gives the company a valuation of $20.44 billion and a current trailing 12 month dividend yield of 6.37%.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• ASX 200 drops 0.6% today, Afterpay share price down 7%
• Macquarie picks ASX stocks that can deliver positive earnings surprises next month
• 5 things to watch on the ASX 200 on Tuesday
• 3 ASX shares with incredible cost moats

Motley Fool contributor Daryl Mather 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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As the wealthiest fund manager in Australia, Magellan Financial Group Ltd‘s (ASX: MFG) Hamish Douglass is someone that a lot of investors have time for. And for good reasons too. Magellan has grown to be the largest fund manager in Australia with $95.5 billion in funds under management as of 30 June.

Magellan’s flagship Global Fund (unlisted) has delivered its investors an average of 15.77% per annum over the past 10 years (after fees), which is an exceptional result that most ASX fundies would find out of reach. The Magellan Global Fund has an ASX-listed quasi-equivalent in the Magellan Global Equities Fund (ASX: MGE).

What shares has Magellan been buying?

Magellan has recently disclosed the total holdings of its funds for the end of the financial year. It makes some interesting reading.

For its Global Fund and Global Equities fund, the top 10 shares held are as follows:

1. Microsoft Corporation
2. Tencent Holdings
3. Alibaba Group
4. Alphabet
5. Facebook
6. Reckitt Benckiser Group
7. Starbucks Corporation
8. Novartis AG
9. Crown Castle International Corporation
10. SAP SE

The portfolio’s cash position is sitting at 15% as of 30 June.

For Magellan’s High Conviction Trust, which is an unlisted fund that offers a high conviction, high concentration strategy with ‘8-12 of Magellan’s best ideas’, the holdings are as follows:

1. Microsoft Corporation
2. Alibaba Group
3. Tencent Holdings
4. Alphabet
5. Facebook
6. Starbucks Corporation
7. SAP SE
8. Visa
9. Estee Lauder

The portfolio’s cash position is sitting at 22% as of 30 June.

Magellan also offers an ASX-listed version of this fund as well – the Magellan High Conviction Trust (ASX: MHH).

How is Magellan investing in this uncertain world?

In an interview with the Australian Financial Review (AFR), Hamish Douglass also discusses his conflicting ‘visions for the future’. Douglass told the AFR that he can see 2 possible scenarios for the future of global markets. One is where the world “gets on top of the pandemic”, fiscal and monetary support continue and economies reopen.

The other (you might have guessed already) is a little direr. It involves an uncontained coronavirus with waves of infection and rolling shutdowns and lockdowns, which would, of course, be a terrible development for global markets. Douglass isn’t willing to bet one way or the other but sees both as definite possibilities.

It’s through this prism that we should analyse Magellan’s current portfolio holdings. Douglass tells the AFR that his management team has already removed companies that would be heavily affected by the second scenario. Even though he loves the business models of LVMH (owner of luxury brands like Luis Vitton), brewers Heineken and Anheuser-Busch InBev, and US-based private hospital operator HCA, Douglass sees too mich risk facing these companies to justify an investment in the current environment.

But longtime cornerstone shares like Tencent, Alphabet, and Microsoft remain as they look set to thrive in either scenario.

Foolish takeaway

Even though Douglass and Magellan don’t really invest in ASX-listed shares, I think all Aussie investors would benefit from taking a look at this reputable fund manager’s moves and market outlook. Douglass has got to the position he is in today by getting enough calls right, after all.

More reading

• My ASX share for the week
• 2 easy ASX shares for beginners
• The Afterpay share price among ASX stocks hit by a broker downgrade today
• Why Afterpay, Alumina, Magellan, & Webjet shares are dropping lower
• ASX 200 drops on return of lockdown in Melbourne

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Sebastian Bowen owns shares of Alphabet (A shares), Facebook, and Magellan High Conviction Trust. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares) and Facebook. The Motley Fool Australia has recommended Alphabet (A shares) and Facebook. 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 second wave of coronavirus through Victoria is understandably weighing heavily on shares such as Flight Centre Travel Group Ltd (ASX: FLT) and Webjet Limited (ASX: WEB).

After all, a second wave has the potential to derail Australia’s economic recovery and particularly the recovery of the travel market.

However, not all shares are under pressure because of second wave concerns. In fact, some ASX shares have been propelled to new highs by these concerns.

Here’s why these ASX shares are on a high right now:

Ansell Limited (ASX: ANN)

The Ansell share price hit a record high of $38.32 on Tuesday. Investors have been buying the health and safety products company’s shares this year due to the increasing demand it is experiencing it is during the pandemic. Judging by the rampant buying, investors appear to believe the pandemic will cause a sustained increase in demand for Ansell’s hand and body protection solutions.

Fisher & Paykel Healthcare Corp Ltd (ASX: FPH)

The Fisher & Paykel Healthcare share price has continued its incredible rise and hit a record high of $34.50 yesterday. This stretched the medical device company’s year to date gain to a sizeable 64%. Investors have been fighting to get hold of the company’s shares amid the increasing number of COVID-19 infections globally. Investors appear confident this will lead to growing demand for its ventilators over the coming months and drive further strong growth in FY 2021.

Marley Spoon AG (ASX: MMM)

The Marley Spoon share price hit a new record high of $2.25 on Tuesday. The meal kit delivery company’s shares have been exceptionally strong performers during the last few months after the pandemic led to a surge in demand. In fact, demand has been so strong that Marley Spoon’s first quarter revenue grew 46% on the prior corresponding period to 42.8 million euros. Given that this covered the three months to 31 March 2020, I suspect its second quarter result could be even stronger. Positively, this stronger than planned growth is expected to accelerate its path to profitability.

More reading

• Which ASX shares will benefit from the second lockdown?
• Is the Webjet share price a buy after falling 40% from its June high?
• Why I think the Polynovo share price is a buy right now
• A great ASX dividend share to buy this week
• ASX 200 Weekly Wrap: Rocketing BNPL shares fail to stop ASX 200 slide

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. The Motley Fool Australia has recommended Ansell Ltd. and Flight Centre Travel 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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If you’re looking to add a few new dividend shares to your portfolio, then the two listed below could be top options this month.

Both these ASX shares offer generous yields and look well-placed to continue paying dividends in 2020 despite the crisis. Here’s why I think they are in the buy zone right now:

Aventus Group (ASX: AVN)

Aventus is a retail property company which owns a total of 20 large format retail parks across Australia. While retail property is going through a difficult time right now because of the pandemic, Aventus looks better positioned that most. This is because its rental income has a high weighting towards everyday needs, which have been largely unaffected by the crisis.

Goldman Sachs is very positive on the company and has forecast a ~17.3 cents per unit distribution in FY 2021. Based on the current Aventus share price, this equates to a very generous forward ~8.1% distribution yield. Overall, I think this could make Aventus a dividend share to buy right now.

Telstra Corporation Ltd (ASX: TLS)

Another dividend share to consider buying is Telstra. After years of declining earnings and dividend cuts, I’m confident the tide is now turning for this telco giant. This is due to a combination of the NBN headwind easing, rational competition returning, and the material cost cutting from its T22 strategy.

All in all, I believe this has put Telstra in a position to generate sufficient free cash flow in the coming years to maintain its 16 cents per share fully franked dividend. After which, I’m optimistic that it won’t be long until the company returns to growth at long last. For now, based on the latest Telstra share price, it offers investors an attractive fully franked 4.6% dividend yield.

More reading

• 3 safe and strong ASX dividend shares to buy during the pandemic
• Why I would buy Telstra and these ASX dividend shares
• These ASX dividend shares will help you beat low interest rates
• a2 Milk and 1 other quality ASX share to buy right now
• ASX 200 Weekly Wrap: Rocketing BNPL shares fail to stop ASX 200 slide

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia has recommended AVENTUS RE UNIT. 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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After a strong start to the week, the S&P/ASX 200 Index (ASX: XJO) gave back some of its gains and dropped notably lower on Tuesday. The benchmark index fell 0.6% to 5,941.1 points.

Will the market be able to bounce back on Tuesday? Here are five things to watch:

ASX 200 to rebound.

It looks set to be a positive day of trade for the ASX 200 index on Wednesday after a very strong night of trade on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 30 points or 0.5% higher. In the United States the Dow Jones rose 2.1%, the S&P 500 climbed 1.3%, and the Nasdaq pushed 0.9% higher. Easing coronavirus cases in Florida and California appears to have given investor sentiment a boost.

Oil prices rise.

Energy producers Beach Energy Ltd (ASX: BPT) and Oil Search Limited (ASX: OSH) could be positive performers on Wednesday after oil prices pushed higher. According to Bloomberg, the WTI crude oil price has risen 1% to US$40.49 a barrel and the Brent crude oil price climbed 0.7% to US$43.05 a barrel. Oil prices rose after OPEC and its allies revealed that they cut production by more than agreed in June.

Gold price largely flat.

Gold miners such as Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) could have a subdued day of trade after a flat night of trade for the gold price. According to CNBC, the spot gold price is ever so slightly higher at US$1,812.50 an ounce. Coronavirus concerns has helped drive the precious metal beyond US$1,800 an ounce this month.

Woodside asset review.

The Woodside Petroleum Limited (ASX: WPL) share price could come under pressure on Wednesday after the energy producer announced billions of dollars of impairments. According to the release, Woodside expects to recognise non-cash, post-tax impairment losses of US$3.92 billion with its first half results. This comprises $2.76 billion for oil and gas properties and $1.16 billion for exploration and evaluation assets.

Collins Foods goes ex-dividend.

The Collins Foods Ltd (ASX: CKF) share price is likely to drop lower this morning when it trades ex-dividend for its final dividend. Eligible shareholders of the KFC and Taco Bell restaurant operator can now look forward to being paid its fully franked 10.5 cents per share dividend later this month on 30 July 2020.

More reading

• ASX 200 drops 0.6% today, Afterpay share price down 7%
• Is the Coles share price still attractive after it surged to a record high today?
• Investor in your 30s? Buy these cheap ASX shares
• Top brokers pick the latest ASX small cap stocks to buy today
• Macquarie picks ASX stocks that can deliver positive earnings surprises next month

Motley Fool contributor James Mickleboro owns shares of Collins Foods Limited. The Motley Fool Australia has recommended Collins Foods 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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