Are you planning to invest $500 into the share market in the near future?

If you are, I believe you should be looking long term with your investments. This is because at ~$10 per trade, brokerage costs will eat into your profits if you are constantly buying and selling shares.

But which shares should you buy with $500? Listed below are three quality ASX shares I think would be great options for investors:

Afterpay Ltd (ASX: APT)

I believe this buy now pay later (BNPL) provider could be a great option for a $500 investment. I believe Afterpay could be a long term market beater thanks to the growing popularity of BNPL with consumers and retailers and its global expansion plans. The latter includes plans to expand into Europe and potentially Asia in FY 2021. Combined with its long runway for growth in the $5 trillion United States market, I believe Afterpay’s earnings could grow at a rapid rate for many years to come. And if everything goes to plan, I feel Afterpay has the potential to become a giant of the payments industry.

Nearmap Ltd (ASX: NEA)

Another ASX share to consider investing $500 into is Nearmap. It is an aerial imagery technology and location data company with operations currently in the ANZ and North American markets. I believe it could also be a long term market beater. This is due to the quality of its software and its strong position in a fragmented market worth an estimated $2.9 billion per year. Another positive is that the company has the option to increase its addressable market by expanding into other countries in the future.

Pushpay Holdings Group Ltd (ASX: PPH)

A final ASX share to consider investing $500 into is Pushpay. It is a leading donor management platform provider for the faith sector. Due to the digitisation of the church and the shift to a cashless society, I believe Pushpay is well-positioned for growth over the 2020s. This certainly will be the case in FY 2021. Management recently advised that it is on course to deliver EBITDAF of between US$48 million and US$52 million this year. This will be a 91.2% to 107% increase, respectively, year on year. Looking further ahead, Pushpay is targeting a 50% share of the medium to large church market. This represents a US$1 billion revenue opportunity.

More reading

• ASX 200 Weekly Wrap: Friday crash pulls ASX back below 6,000 points
• Here’s how to make a $1 million portfolio by investing $1,000 a month
• These were the worst performing ASX 200 shares last week
• ASX All Technology Index swells with new additions
• ASX 200 plunges 3.1%, Afterpay suffers

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 Nearmap Ltd. and PUSHPAY FPO NZX. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Nearmap Ltd. and PUSHPAY FPO NZX. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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If I had to buy one ASX share this week it would be listed investment company (LIC) Future Generation Global Investment Co Ltd (ASX: FGG).

What is a LIC?

In most ways a LIC is just like any other company. The main difference with a LIC is that instead of selling products and services, it makes investments on behalf of shareholders.

The profit generated by a LIC comes from the capital gains (both realised and unrealised) as well as the investment income it receives. The LIC can then choose to keep all of those investment profits to grow the portfolio further, or it could decide to pay out some of that profit as a dividend.

There are some very old ASX share LICs on the ASX like Australian Foundation Investment Co.Ltd. (ASX: AFI) and Argo Investments Limited (ASX: ARG). There are also newer ones such as Future Generation Global.

A quick overview of Future Generation Global Investment Co Ltd

Future Generation Global is one of the philanthropic LICs launched by Wilson Asset Management (WAM) founder Geoff Wilson. The idea behind Future Generation is to donate money to youth charities. I think it’s a great cause. Future Generation Global invests 1% of its net assets each year to youth mental health charities.

In 2020 Future Generation Global’s donation is $5.7 million. Some of the charities it supports include: Black Dog Institute, Reachout.com, Sane Australia, Kidshelpline and Butterfly.

So what ASX shares does Future Generation Global invest in? It doesn’t actually invest in Australian shares. It invests in Australian fund managers that target international shares. Those managers work for free so that Future Generation Global can make its annual donation.

Some of the fund managers that it’s invested with are: Magellan Financial Group Ltd (ASX: MFG), Cooper, Caledonia, Paradice and Munro Partners. These are some of the best fund managers in Australia.

Recent performance update

Future Generation Global releases a monthly update. The ASX share reports how its gross portfolio return compares against the MSCI AC World Index (AUD). Over July it outperformed the benchmark by 1%, over six months it outperformed by 5%, over the previous 12 months it outperformed by 4.8% and over the past three years it outperformed by 2.1% per annum with an average annual return of 13.1%.

I think this level of outperformance is attractive, particularly as it offers such a wide level of diversification.

Why I’d buy Future Generation Global Investment this week

The ASX share is invested in multiple portfolios of businesses. I really like that you get underlying exposure to many dozens of different stocks. It has been a good defensive option during COVID-19. 

I like that the Australian dollar has strengthened in recent months. That means it’s better to buy international shares such as US businesses. Right now the Australian dollar is almost at the strongest level compared to the US dollar that it has been over the past 12 months.

The Future Generation Global board recently decided to increase the full year dividend from 1.5 cents to 2 cents per share. The focus of this ASX share is capital growth, but it’s nice to see that the dividend can grow as the profit reserve gets bigger.

The value is the most important reason to consider Future Generation Global. I’m not sure what today’s pre-tax net tangible assets (NTA) per share is. But at the end of July 2020, the LIC had $1.505 of NTA per share. Compared to the pre-open Future Generation Global Investment share price of $1.29, it’s trading at an attractive 14.3% NTA discount.

Diversification, outperformance and a discount is an attractive combination in my opinion. I recently bought a parcel of shares and I’d happily do it again today.

More reading

• Here are 2 ASX shares perfect for a beginner

Motley Fool contributor Tristan Harrison owns shares of Future Generational Global Investment Company Limited. 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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Are you looking for ASX dividend shares to add to your portfolio this week? Then the ones listed below could be top options for you right now.

Here’s why I think these ASX dividend shares are currently in the buy zone for income investors:

Accent Group Ltd (ASX: AX1)

The first option for income investors to look at this week is Accent. It is a footwear-focused retailer which owns retail store brands such as HYPE DC and Platypus. Although the pandemic has hit the retail sector hard, Accent has continued its positive form thanks to the popularity of its brands, its strong market position, and growing online business.

And due to its expansion plans, strong online offering, and its focus on active/casual wear, I’m confident Accent is well positioned to grow its profits and dividends at a solid rate over the next decade. For now, I’m expecting Accent to pay a 9 cents per share fully franked dividend in FY 2021. Based on the current Accent share price, this means investors will receive a forward 5.75% dividend yield.

National Storage REIT (ASX: NSR)

Another option to consider buying is this self storage operator. I think it could be a top long term option for income investors due to its strong market position and growth through acquisition strategy. This strategy has supported solid income and distribution growth over the last few years and even during FY 2020.

National Storage posted a 9% increase in underlying earnings to $67.7 million in FY 2020. And while its earnings are expected to be flat at best in FY 2021, I’m confident its growth will resume once the crisis passes. Until then, based on the current National Storage share price, I estimate that it offers an attractive forward 4% distribution yield.

More reading

• 5 things to watch on the ASX 200 next week
• 2 high yield ASX dividend shares to buy right now
• Leading brokers name 3 ASX shares to sell today
• Buy these ASX dividend shares if the RBA cuts rates
• Is the Mirvac share price the best real estate buy right now?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Accent 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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The tech sector has been hit very hard this month following a profit-taking selloff on Wall Street’s Nasdaq index.

While this is disappointing, it has pulled down a number of high quality ASX tech shares to attractive levels.

Two ASX tech shares that I would buy are listed below. Here’s why I think investors should snap them up when the dust settles:

Appen Ltd (ASX: APX)

The Appen share price is down 26% from its 52-week high. I believe this is a buying opportunity for long-term focused investors. Appen is the leading developer of high-quality, human annotated datasets for machine learning and artificial intelligence (AI). This essentially means that when businesses are developing AI models, they come to Appen to have its million-strong crowd-sourced team of experts prepare the data to go inside it. This is a vital part of the process, as without quality training data, a model will never reach its potential.

The good news for Appen is that demand for AI services is expected to grow strongly over the next decade as businesses and governments invest heavily in the space. I believe this bodes well for Appen and expect it to underpin strong earnings growth over the next decade. In light of this, I think now would be an opportune time to invest.

ELMO Software Ltd (ASX: ELO)

The ELMO Software share price is down a whopping 35% from its 52-week high. I think this has brought the shares of the cloud-based human resources and payroll software company to an attractive level. Especially given its strong long term growth potential and its positive performance during the pandemic. ELMO was a strong performer in FY 2020 and grew its annualised recurring revenue (ARR) by 19.7% to $55.1 million. Management expects similarly strong organic ARR growth in FY 2021 and looks likely to bolster this with acquisitions.

Looking further ahead, the company estimates that the ANZ market is currently worth $2.4 billion per year and the UK market is worth $6.8 billion. This gives ELMO and its quality software platform a long runway for growth over the next decade.

More reading

• 4 exciting small cap ASX tech shares to watch
• ASX 200 plunges 3.1%, Afterpay suffers
• Buy these beaten down ASX 200 shares after the market selloff
• 3 ASX growth shares to buy after the market selloff
• I love volatile ASX share market days like today

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Elmo Software. The Motley Fool Australia owns shares of and has recommended Elmo Software. The Motley Fool Australia owns shares of Appen 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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On Friday the S&P/ASX 200 Index (ASX: XJO) had a day to forget and crashed notably lower. The benchmark index fell almost 3.1% to 5,925.5 points.

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

ASX 200 to drop lower gain.

It looks set to be another disappointing day of trade for the ASX 200 index. According to the latest SPI futures, the benchmark index is expected to open the day 36 points or 0.6% lower this morning. This follows a poor end to the week on Wall Street, which saw the Dow Jones fall 0.55%, the S&P 500 drop 0.8%, and the Nasdaq index tumble 1.3% lower.

Oil prices crash lower.

It could be a tough day for energy producers such as Beach Energy Ltd (ASX: BPT) and Woodside Petroleum Limited (ASX: WPL) after oil prices crashed lower on Friday night. According to Bloomberg, the WTI crude oil price fell 3.9% to US$39.77 a barrel and the Brent crude oil price dropped 3.2% to US$42.66 a barrel. Concerns over global oil demand weighed heavily on prices.

DEXUS looking at AMP fund.

The DEXUS Property Group (ASX: DXS) share price could be one to watch this morning. There are reports that the property company is looking to snare the rights to a big Australian investment fund operated by AMP Limited (ASX: AMP). The AFR understands that DEXUS is aiming to merge one of its own funds with the $4.5 billion AMP Capital Diversified Property Fund. The latter owns stakes in the Pacific Fair shopping centre, the Macquarie Centre, and the Quay Quarter.

Shares going ex-dividend.

Another group of shares will be trading ex-dividend this morning and could drop lower. Two highlights today are stock exchange operator ASX Ltd (ASX: ASX), which goes ex-dividend for its 122.5 cents per share dividend, and healthcare company Sonic Healthcare Limited (ASX: SHL) for its 51 cents per share dividend. They are joined by dairy company Bega Cheese Ltd (ASX: BGA) and financial services company IOOF Holdings Limited (ASX: IFL).

Gold price softens.

The shares of Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) will be on watch today after the gold price softened. According to CNBC, the spot gold price fell 0.2% to US$1,934.30 an ounce on Friday night. A strong U.S. jobs report boosted the U.S. dollar and weighed on the gold price.

More reading

• 5 things to watch on the ASX 200 next week
• These were the best performing ASX 200 shares last week
• These were the worst performing ASX 200 shares last week
• ASX 200 plunges 3.1%, Afterpay suffers
• Top brokers are urging you to buy these ASX stocks in this market meltdown

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Sonic Healthcare 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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When you first start out investing, you might seek market beating returns from high risk, high reward growth shares. After all, if things don’t go quite to plan, you have plenty of time to recover from your losses.

But as you approach or enter retirement, I think these types of investments should start to take a backseat and become just a small part of a portfolio. 

Instead I think investors at this stage in their investment journey should focus on those that offer both income and capital preservation.

With that in mind, I have picked out two ASX shares which I think would be great options for a retirement portfolio right now. They are as follows:

Coles Group Ltd (ASX: COL)

The first ASX share I would consider buying for a retirement portfolio is Coles. In fact, I think the supermarket giant is arguably the best option on the Australian share market for retirees to buy. This is because it offers the winning combination of defensive earnings, solid growth prospects, and a decent yield. In respect to the latter, based on the current Coles share price, I estimate that it offers investors a fully franked forward 3.1% dividend. I think this is very attractive in the current low interest rate environment.

Dicker Data Ltd (ASX: DDR)

Another top option for a retirement portfolio could be this wholesale distributor of computer hardware and software. I think Dicker Data would be a great option due to its robust business model, solid growth prospects, high levels of insider ownership, and its quarterly dividends. Business has been booming in FY 2020 and management intends to increase its dividend by around a third to 35.5 cents per share. With the Dicker Data share price currently fetching $7.36, this equates to a generous fully franked 4.8% dividend yield.

More reading

• ASX All Technology Index swells with new additions
• ASX 200 plunges 3.1%, Afterpay suffers
• The best dividend shares to buy today
• Quarterly rebalance: Coles and Fortescue added to ASX 20, Zip joins the ASX 200
• 2 solid ASX dividend shares for income in 2020

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. The Motley Fool Australia owns shares of 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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At present, Westpac Banking Corp (ASX: WBC) is offering 0.7% per annum yields on its 12-month term deposits. This is broadly in line with what other banks are offering.

This means that even if you invested $1 million into these term deposits, you’d only get $7,000 of income from them annually.

Fortunately, the Australian share market is home to a number of ASX dividend shares which offer vastly superior yields.

Three dividend shares which I think would be great as part of a balanced income portfolio are listed below. Here’s why I would buy them:

BWP Trust (ASX: BWP)

The first ASX dividend share to consider buying is BWP. It is a real estate investment trust with a focus on warehouses. The majority of its properties are leased to hardware giant Bunnings, which I believe is one of the highest quality retailers in the country. Bunnings has been a strong performer during the pandemic and looks well-positioned to continue this positive form over the long term. In light of this, I think BWP is well-positioned to grow its rental income and distribution at a solid rate over the next decade. Based on the current BWP share price, I estimate that it offers investors a forward 4.5% yield.

Fortescue Metals Group Limited (ASX: FMG)

Another option for income investors to consider buying its Fortescue. I believe it is a great option due to the quality of its operations and the high prices that iron ore is commanding at present. With the iron ore price trading above US$120 a tonne, Fortescue is well-placed to generate high levels of free cash flow in FY 2021. The majority of this is likely to be returned to shareholders in the form of dividends. In light of this and the current Fortescue share price, I would expect a forward fully franked dividend of 5% to 6%.

Vanguard Australian Shares High Yield ETF (ASX: VHY)

A final option to look at is the Vanguard Australian Shares High Yield ETF. It invests in a total of 66 high yielding dividend shares from a range of different sectors. This includes mining giants, the banks, and blue chip favourites. I like the fund because of the diversity it gives investors. Something which the pandemic has proven is very important to have. I estimate that its units offer a forward dividend yield of 4% to 5%.

More reading

• How to earn a passive income of $50,000 with ASX dividend shares
• ASX 200 plunges 3.1%, Afterpay suffers
• The best dividend shares to buy today
• Insiders have been buying Fortescue and this ASX share
• Fortescue share price drops lower despite positive update

Motley Fool contributor James Mickleboro owns shares of Westpac Banking. 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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While some stocks have fully recovered from the 2020 market crash, others continue to trade at exceptionally low prices. Although there is scope for them to move even lower in the short run, over the long term a number of sectors appear to offer excellent recovery potential.

Therefore, buying a diverse range of undervalued stocks now could boost your portfolio returns over the coming years. They could prove to be among the most attractive buying opportunities of your lifetime.

Recovering from the market crash

The market crash caused a wide range of stocks to experience severe declines in their price levels in the first quarter of 2020. While some of them have recovered since then, many industries continue to be extremely unpopular among investors. Stocks trading within such sectors could, therefore, offer excellent value for money for long-term investors.

For example, low interest rates in many of the world’s major economies mean that banking stocks are generally viewed unfavourably by investors. Although they are set to experience lower profitability in the short run, over the long term they could deliver sound recoveries. Similarly, travel stocks, retail businesses and energy companies that have solid balance sheets may be able to adapt their business models to a changing economy. This may allow them to generate improving profitability that leads to rising share prices over the coming years.

Through focusing your capital on unpopular sectors after the market crash, you could enjoy market-beating returns over the long run. For many stocks in the aforementioned sectors, investor sentiment has very rarely been as weak as it is today. Therefore, now could be a rare buying opportunity.

Capitalising on undervalued stocks

Clearly, the market crash could be repeated in the near term. Risks such as the US election, Brexit and the coronavirus pandemic may cause investor sentiment to weaken further. Similarly, the weak prospects for sectors such as banking, travel and energy companies may lead to financial difficulties for their incumbents.

As such, it is important to buy a diverse range of businesses. Having a portfolio that is too concentrated on a small number of companies means you are reliant on them to deliver your returns. Should one or more of them disappoint in this regard, your portfolio’s performance could be severely impacted. This risk can be diversified away, which could produce higher returns in the long run.

Furthermore, buying the strongest and most dominant businesses in unpopular sectors after the market crash is a logical approach. They may not be among the cheapest stocks compared to some of their peers. But buying high-quality stocks at low prices may prove to be a better strategy than simply purchasing cheap stocks. Over time, strong businesses are likely to survive and prosper as their operating conditions improve, and investor sentiment does likewise. This could lead to higher returns for your portfolio.

More reading

• 3 ASX shares every retiree should own
• Top brokers name 3 ASX shares to sell next week
• Top brokers name 3 ASX shares to buy next week
• 4 exciting small cap ASX tech shares to watch
• Here’s how to make a $1 million portfolio by investing $1,000 a month

Motley Fool contributor Peter Stephens 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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I think there are some ASX shares that every retiree should own in their portfolio.

I’m not a fan of ‘old school’ ASX shares like Westpac Banking Corp (ASX: WBC) or Telstra Corporation Ltd (ASX: TLS). I believe that good earnings growth needs to be likely over the medium-term-to-long-term for an investment to make sense. I don’t see that for Westpac or Telstra, but I do see it for these ASX shares:

Rural Funds Group (ASX: RFF)

Rural Funds is an agricultural real estate investment trust (REIT) which owns a variety of farms including cattle, cotton, macadamias, almonds and vineyards.

I like the diversification offered. Its farms are diversified by farm type, different climatic conditions and they are geographically diverse.

I believe that Rural Funds is an ASX share that would be a good choice for all retirees.

It aims to increase its distribution by 4% each year. It’s able to do this thanks to a few different factors. It has contracted rental growth which is either fixed at a 2.5% increase per annum or linked to CPI inflation, plus market reviews. Rural Funds also invests in its farms for productivity improvements, which increases rental income and the valuation of the farms. Rural Farms will occasionally make an accretive acquisition too.

I think Rural Funds is a very defensive business with a pleasing distribution. At the current Rural Funds share price it has a FY21 distribution yield of 5%.

Magellan Global Trust (ASX: MGG)

Magellan Global Trust is a listed investment trust (LIT) which invests in the highest-quality global shares that it can find.

Not many of the best global businesses are ASX shares. They are listed overseas, usually in the US. Some of its largest holdings are: Alibaba, Alphabet, Atmos Energy, Eversource Energy, Facebook, Microsoft, Reckitt Benckiser, Tencent, Visa and Excel Energy.

It offers good diversification both geographically and through the industries it’s invested in. Whilst many of the businesses it’s invested in are listed in the US, the underlying revenue is generated from across the world.

The biggest investment allocation is to internet and ecommerce businesses. These are the businesses with inherent operating advantages and they can also continue to perform during these difficult COVID-19 times.

Magellan Financial Group Ltd (ASX: MFG) has performed strongly with its investment funds over the past decade and I think many Aussie investors need to expand their portfolio to non-ASX shares. This LIT is a good way to do it.

A bonus is that Magellan Global Trust targets a 4% distribution yield. At the current Magellan Global Trust share price it’s trading at a 5% discount to the net asset value (NAV) per unit.

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

Soul Patts could be one of the best ASX shares for retirees. It’s a great ASX dividend share.

It has grown its dividend every year since 2000. It has actually been listed since 1903 and paid a dividend every year since then. That’s a reliable track record. It’s good to know you’re likely to get a bigger dividend than last year.

The investment conglomerate owns a variety of investments. It’s invested in ASX shares like TPG Telecom Ltd (ASX: TPG), Brickworks Limited (ASX: BKW), Australian Pharmaceutical Industries Ltd (ASX: API), Clover Corporation Limited (ASX: CLV), Milton Corporation Limited (ASX: MLT) and Bki Investment Co Ltd (ASX: BKI).

Soul Patts also owns unlisted businesses like resources, agriculture and swimming schools.

It’s probably not going to generate huge returns like tech shares, but it’s a business you could invest in and hold for decades.

At the current Soul Patts share price it offers a grossed-up dividend yield of 4.1%.

Foolish takeaway

I think each of these ASX shares are good options for retirees for the long-term. I believe it’s important to get international exposure, so Magellan Global Trust could be a decent option. However, for long-term Australian business investing I think Soul Patts is the best option.

More reading

• Here’s how to make a $1 million portfolio by investing $1,000 a month
• How to earn a passive income of $50,000 with ASX dividend shares
• 3 ASX blue chip shares I’d buy with $3,000 right now
• 2 solid ASX dividend shares for income in 2020
• New to investing? 3 top ASX shares to kickstart your portfolio

Tristan Harrison owns shares of MAGLOBTRST UNITS, RURALFUNDS STAPLED, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Clover Limited. The Motley Fool Australia owns shares of and has recommended Brickworks, RURALFUNDS STAPLED, Telstra Limited, and Washington H. Soul Pattinson and Company Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Once again, a large number of broker notes hit the wires last week. Some of these notes were positive and some were bearish.

Three sell ratings that caught my eye are summarised below. Here’s why top brokers think investors ought to sell these shares next week:

Pilbara Minerals Ltd (ASX: PLS)

According to a note out of Citi, its analysts have retained their sell rating and 32 cents price target on this lithium miner’s shares. Pilbara Minerals’ full year result fell a touch short of Citi’s expectations in FY 2020. Unfortunately, it doesn’t think that there will be a meaningful improvement in its performance in the near term due to soft market conditions which are weighing on lithium prices. The Pilbara Minerals share price ended the week at 34 cents.

Pointsbet Holdings Ltd (ASX: PBH)

Analysts at Credit Suisse have downgraded this sports betting company’s shares to an underperform rating with a $6.50 price target. This follows the announcement of a major deal with NBC Universal. The broker appears concerned that the committed marketing spend involved with the deal will mean it takes some time for the company to generate earnings in the United States. In addition to this, with its shares notably higher than the broker’s valuation following some very strong gains in recent months, a downgrade to its rating was inevitable. The PointsBet share price was changing hands for $13.69 on Friday.

Zip Co Ltd (ASX: Z1P)

Another note out of Citi reveals that its analysts have downgraded this buy now pay later provider’s shares to a sell rating with a $6.70 price target. It made the move partly on valuation grounds and also on concerns over the entry of PayPal into the U.S. buy now pay later market with its Pay in 4 offering. It appears to believe that Zip’s QuadPay business could have a battle on its hands in the lucrative market due to the increasing competition. The Zip share price ended the week at $6.76.

More reading

• ASX 200 plunges 3.1%, Afterpay suffers
• Why ASX investors shouldn’t fear a market crash
• After the crash, is it time to buy this Nasdaq ETF?
• ASX 200 down 2.75%: Afterpay & Appen sink lower, SKYCITY pushes higher
• Quarterly rebalance: Coles and Fortescue added to ASX 20, Zip joins the ASX 200

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 Pointsbet Holdings Ltd and ZIPCOLTD FPO. The Motley Fool Australia has recommended Pointsbet 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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