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Were Hedge Funds Right About Souring On Wells Fargo & Company (WFC)?
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Frozen foods sales surge since state of pandemic: AFFI
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The 3 reasons why I’d build a dividend share portfolio right now
Building a dividend share portfolio at the present time could be a means of generating a generous passive income over the coming years. Valuations across the share market are relatively attractive after the March market crash from the coronavirus, with many shares offering wide margins of safety.
Furthermore, a lack of appeal among other income-producing assets may increase demand for dividend shares in the long run. With stimulus packages rolled out in major economies, the growth prospects for many industries could improve significantly.
Low valuations in a dividend share portfolio
Due to the March market crash, it is possible to build a dividend share portfolio that contains companies with low valuations. Although investor sentiment rebounded sharply after the market’s crash, many companies continue to trade on valuations that are below their long-term averages. This may mean that they offer relatively high yields that produce a generous passive income.
It may also lead to impressive capital returns in the coming years. Buying shares when they trade at attractive prices has previously been a successful means of generating above-average total returns. As the share market gradually recovers, your portfolio’s value could rise. This may make it easier to generate a passive income in the long run.
Relative appeal
A dividend share portfolio may offer significantly greater income prospects than other assets over the coming years. Interest rates have been relatively low for a number of years, and may now fail to rise rapidly as policymakers across the world seek to provide support to their economies. This may reduce demand for income-producing assets such as bonds and cash, which could push many income-seeking investors towards dividend shares.
Therefore, as well as offering a relatively high yield, dividend shares could become increasingly popular among investors. This may help to push their share prices higher, thereby leading to greater total returns for investors who hold them as part of a diversified portfolio.
Growth potential
Owning a dividend share portfolio may not produce high returns in the short run. The prospects for positive global economic growth have rapidly declined over the past few months, and risks such as a second wave of coronavirus may continue to weigh on the outlook for world GDP.
However, the global growth outlook could be positively impacted by fiscal and monetary policy stimulus taking place in major economies. After all, stimulus packages implemented in the global financial crisis had a positive impact on asset prices and economic activity.
Although this may not lead to instant gains for dividend share prices, over the long run it is likely to produce capital growth. Alongside the relatively high-income returns available on many dividend shares, the end result could be attractive total returns that make now the right time to start building a dividend share portfolio.
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
More reading
- Stock market crash round 2: why more buying opportunities could be ahead
- 2 ASX dividend shares with yields over 6%
- 2 dirt-cheap ASX shares to buy next week
- ASX 200 closes 0.4% higher, Cochlear share price up 6%
- Here are the 10 shares that move global markets
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.
The post The 3 reasons why I’d build a dividend share portfolio right now appeared first on Motley Fool Australia.
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LG Chem to produce Tesla batteries in South Korea this year as demand grows – source
South Korea’s LG Chem Ltd plans to start producing batteries for Tesla Inc vehicles at a domestic factory this year after the U.S. electric carmaker raised orders to cope with demand, a person familiar with the matter said on Friday. “Tesla is asking not only LG Chem but other suppliers to increase supplies, as its cars are selling well,” the person told Reuters. A second person with knowledge of the situation also said LG Chem is converting some of its production in South Korea to produce batteries for Tesla.
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Nord Stream 2 Could Sever Transatlantic Ties
(Bloomberg Opinion) — U.S. President Donald Trump is furious at Germany for many reasons, not all of them fathomable. In phone conversations with Angela Merkel, he’s allegedly called the German chancellor “stupid” and denigrated her in “near-sadistic” tones. Though this be madness, as the Bard might say, there is — on rare occasions — method in it. One such case is Nord Stream 2.It is an almost-finished gas pipeline under the Baltic Sea between Russia and Germany, running right next to the original Nord Stream, which has been in operation since 2011. “We’re supposed to protect Germany from Russia, but Germany is paying Russia billions of dollars for energy coming from a pipeline,” Trump roared at a recent campaign rally. “Excuse me, how does that work?”As is his wont, the president thereby conflated many things. One of his grievances is that Germany has long been scrimping on its military spending, in effect free-riding on U.S. protection, for which he wants to punish his “delinquent” ally. Another is that the European Union, which he considers Germany’s marionette, allegedly takes advantage of the U.S. in business. Trump also wants to sell Europe more American liquefied natural gas (LNG).But Trump isn’t the only American trying to stop Nord Stream 2. In December, Congress aimed sanctions at a Swiss company that supplied the ships to lower the pipes into the water. This delayed the pipeline’s launch. Then Russia sent another vessel to finish the job. So this week a bipartisan group of Senators moved to widen the sanctions in order to kill Nord Stream 2 altogether.The problem is that if this new round becomes law, it will amount to an all-out economic assault on Europe. It could hit individuals and companies from many countries that are only tangential to the project — by underwriting insurance for the pipeline, say, or providing port services to the ships involved.Considering this an instance of illegal American extraterritoriality, the German government now plans to make the EU retaliate against the U.S. Trump, in the heat of America’s “silly season” leading up to November, could then strike back with new tariffs on German cars or a full-blown trade war. The transatlantic alliance, which was already frayed, is close to tearing.To me, this situation increasingly resembles “chicken,” a classic in game theory. The question is whether both sides are merely feigning recklessness (as the game assumes) or are already too far gone. And that applies just as much to the Germans. They like to play the reasonable side in transatlantic fights but deserve just as much blame as Trump and Congress for causing this mess.If Russia were a normal country, the German rationale for this pipeline might make sense. Europe will need more gas, especially to replace much dirtier coal and to supplement renewable sources of energy on the way to becoming carbon-neutral. And to get that gas, it makes sense to diversify — between Norwegian imports, American LNG or any other sort, including the Russian stuff. And piping it into Europe along the shortest route — through the Baltic — is efficient.But Russia is far from a normal country. It has for years been waging hybrid warfare in Europe, ranging from disinformation campaigns to aggression in Ukraine. At Germany’s urging, Russia recently extended a contract with Kiev to keep piping gas through Ukraine for several more years. But in the longer term, the new pipeline gives Russia dangerous geopolitical and strategic options.With two pipelines through the Baltic and another big one through the Black Sea, Russia could in the future cut all central and eastern European countries out of billions in transit fees. The country already controls almost 40% of the EU’s gas market even without Nord Stream 2. Once that goes online, the rest of Europe may become too dependent and therefore vulnerable to blackmail. When Trump calls Germany “a captive to Russia,” he has half a point.This is why Poland and the Baltic republics of Latvia, Lithuania and Estonia also oppose Nord Stream 2. As NATO’s eastern front line and former victims of invasion and aggression, they fear Russia more viscerally than Germans do nowadays. Psychologically, the Poles distrust any deal between Germany and Russia over their heads, because it reminds them of the Molotov-Ribbentrop Pact of 1939, which carved up their region between Nazi and Soviet spheres of influence.My question to the Germans, then, is why they have for years been deaf to these strategic concerns by their partners in NATO and the European Union, while coddling their own pro-Russian business lobbies and, of course, the Kremlin.German intransigence looks even more unsavory when considering who within Germany is most passionately in favor of the pipeline. Support for it skews sharply to the left, with its long tradition of anti-American and pro-Russian leanings. The most egregious example is Gerhard Schroeder, a Social Democrat who was Angela Merkel’s predecessor as chancellor. He’s always been buddies with Russian President Vladimir Putin. These days he also chairs the supervisory board of Nord Stream AG, which is owned by Gazprom PJSC and thus controlled by the Kremlin, as well as the board of Rosneft Oil Co PJSC, a Russian oil giant.This week, Schroeder testified to the Bundestag that Germany and Europe should prepare tough countermeasures against U.S. sanctions. He won support from The Left, a party that descends from the former regime in East Germany.Nord Stream 2 was and is a terrible idea. It’s a geopolitical project disguised as a private business deal. It has shown Germany to be an insensitive and naïve ally, and the U.S. to be a truculent one. It is now rending what little remains of their former relationship. If there is any way to leave these pipes buried and forgotten under the sea, all involved should discreetly and diplomatically search for it. Otherwise, this game of chicken will end the way it’s not supposed to.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Andreas Kluth is a columnist for Bloomberg Opinion. He was previously editor in chief of Handelsblatt Global and a writer for the Economist. He's the author of "Hannibal and Me." For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
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Stock market crash round 2: why more buying opportunities could be ahead
A second stock market crash in 2020 could occur over the coming months. Risks such as a second wave of coronavirus and rising tensions between the United States and China may contribute to weak earnings growth across many industries.
While this may lead to disappointing returns in the short run, it could provide buying opportunities for the long run. Through buying high-quality businesses while they offer wide margins of safety, you could benefit from a likely long-term recovery in stock prices.
A further market crash
Many listed companies have delivered impressive rebounds since the stock market crash earlier in 2020. However, their performances could be negatively impacted by ongoing risks facing the world economy’s outlook that may lead to a second downturn for share prices.
Relatively little is still known about coronavirus. As such, it may be too early to say that lockdowns across many major economies will be successful in combatting it. Likewise, even though there was apparent progress in trade talks between the US and China prior to the pandemic, tensions between the two countries could rise. This may cause investor sentiment to come under pressure, which could lead to falling share prices over the near term.
Margin of safety
While a further stock market crash may cause some investors to worry, it could provide long-term investors with an opportunity to buy high-quality companies while they offer wide margins of safety.
Buying a stock at a discount to its intrinsic value may equate to a more attractive risk/reward ratio, since many of the risks it faces may already be priced in. As such, buying undervalued shares could be a means of building a solid portfolio that is well placed to deliver long-term growth as the economy recovers.
During a stock market downturn, there may be a wide range of businesses that appear to offer good value for money. As such, it may be worth assessing their financial strength and being selective about which companies you purchase.
Furthermore, buying a diverse range of stocks could be a shrewd move. It may help to protect your portfolio against challenging trading conditions for specific companies and sectors during what could prove to be a difficult period for the world economy.
Recovery potential
A stock market crash is not an especially unusual event. Stock prices have a track record of experiencing sharp downturns in a short space of time. The key takeaway for investors is that the stock market has always recovered from its bear markets to produce record highs.
Therefore, even if there is a further decline in stock prices over the near term, a recovery is very likely. Through purchasing a range of companies while they offer wide margins of safety, you could generate higher returns in the coming years as investor sentiment and company earnings gradually improve.
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
More reading
- 2 ASX dividend shares with yields over 6%
- 2 dirt-cheap ASX shares to buy next week
- ASX 200 closes 0.4% higher, Cochlear share price up 6%
- Here are the 10 shares that move global markets
- Where to invest $5,000 into ASX 200 shares immediately
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.
The post Stock market crash round 2: why more buying opportunities could be ahead appeared first on Motley Fool Australia.
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2 ASX dividend shares with yields over 6%
With interest rates now at a fresh record low of 0.25%, the attraction of ASX dividend shares has rarely been more acute. Many investors are asking themselves why they’re settling for an interest rate under 2% from the bank when some ASX dividend shares are offering more than triple that in potential yields. After all, 2% will barely cover inflation as it is, you wouldn’t be too much worse having your cash under the mattress.
But 2020 has seen a lot of former dividend heavyweights deliver cuts in their shareholder payouts. These include the big four ASX banks, Transurban Group (ASX: TCL) and Sydney Airport Holdings Pty Ltd (ASX: SYD).
So here are 2 ASX dividend shares that: 1) offer grossed-up dividend yields over 6%; and 2) are not likely (in my opinion) to cut said dividend going forward.
Origin Energy Limited (ASX: ORG)
Origin is a utility company that provides electricity and gas connections as well as owning several electrical generation assets. I like these kinds of companies as dividend plays, because energy is a very inelastic service (meaning its use doesn’t fluctuate too much, regardless of what else is happening in the economy). Origin shares haven’t been doing too well as of late. Friday’s closing price was $5.95, which is still well below the ~$8.70 highs we were seeing back in February.
Still, I think this is a safe-and-steady kind of investment that will give off some robust returns over the next few years, especially from dividend payments. On current prices, Origin shares are offering a trailing dividend yield of 5.04%, which grosses-up to 7.2% with full franking credits.
Metcash Ltd (ASX: MTS)
Metcash is the company behind the IGA chain of grocery stores in Australia, as well as the Mitre 10 and Home Timber & Hardware chains. The company also owns a small network of bottle shops, which include the Thirsty Camel and Bottle-O brands. Metcash is perennially the underdog in the grocery war, often overlooked for its larger rivals Woolworths Group Ltd (ASX: WOW) and Coles Group Ltd (ASX: COL).
But I think there is value still left in this underdog. Many people prefer shopping at the smaller, friendlier IGAs and the company has managed to hold on to a small but significant market share in the grocery industry overall. And hardware is also a fairly robust and defensive business to be in as well.
On current prices, Metcash shares are offering a trailing dividend yield of 4.45% – which grosses-up to 6.36% with full franking.
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
More reading
- Here are the 10 shares that move global markets
- Here’s how to play China’s V-shaped growth story
- What’s going on with the Coles share price?
- Why Lovisa, PointsBet, Transurban, & WiseTech shares are racing higher
- Risk to supermarkets is rising but is Woolworths share price still a buy?
Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET, Transurban Group, and Woolworths 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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2 dirt-cheap ASX shares to buy next week
As the S&P/ASX 200 Index (ASX: JXO) keeps climbing (up another 0.42% on Friday), many investors will be celebrating. Rising ASX share prices normally equates to rising wealth for anyone already invested in ASX shares. But for those investors who might still be sitting on a cash position and looking for more opportunities to invest in, it’s also a bittersweet time to be alive. That’s because the higher ASX shares climb, the more unattractive adding new money to one’s share market portfolio becomes.
So that’s why I’ve found 2 ASX shares that I still think are dirt cheap today.
1) A diversified ASX conglomerate
Washington H. Soul Pattinson & Co Ltd (ASX: SOL) is one of the oldest companies on the ASX and is even older than our modern nation, having started life back in pre-Federation days. Back then, Soul Patts owned a small chain of chemists in Sydney. Today, Soul Patts is a diversified conglomerate that is often described as the ASX’s answer to Warren Buffett’s Berkshire Hathaway. That’s because this company primarily invests in other ASX companies these days (although it still retains a couple of pharmacies). Some of its largest stakes are in the newly-merged TPG Telecom Ltd (ASX: TPG), Brickworks Ltd (ASX: BKW) and New Hope Corporation Ltd (ASX: NHC).
The Soul Patts share price has recovered somewhat since the lows of March but is still trading far below the highs we saw back in February. At under $20 a share, I think this company is dirt cheap right now.
2) An ASX telco giant
Telstra Corporation Ltd (ASX: TLS) is our second dirt-cheap ASX share today. Telstra shares have had an exceptionally good week, rising from $3.12 on Monday to finish on Friday at $3.36 (up 7.7%). Despite this, I think this company is still undervalued. We were seeing prices above $4 last year, and I think Telstra can easily get back there when investors start appreciating its solid dividend yield. On current prices, this amounts to 4.76% (or 6.8% grossed-up with full franking) if you include the special nbn dividends.
Further, Telstra is also investing heavily in a new 5G network, which could end up paying off handsomely over the rest of the decade. The commercial impacts of a 5G rollout are not too certain just yet, but I’m optimistic Telstra will be able to work it’s new network into a profitable business venture. As such, I think this telco is a good deal at the current prices, with (in my view anyway) a lot of potential upside without too much downside
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
More reading
- ASX 200 closes 0.4% higher, Cochlear share price up 6%
- Here are the 10 shares that move global markets
- Where to invest $5,000 into ASX 200 shares immediately
- The latest ASX stocks to be downgraded by top brokers today
- Fund managers have been buying these ASX 200 shares
Motley Fool contributor Sebastian Bowen owns shares of Telstra Limited and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks, 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.
The post 2 dirt-cheap ASX shares to buy next week appeared first on Motley Fool Australia.
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ASX 200 closes 0.4% higher, Cochlear share price up 6%
The S&P/ASX 200 Index (ASX: XJO) finished higher by 0.4% today to 6,068 points. It has managed to stay above that 6,000 level going into the weekend.
There continue to be worries about the Victorian COVID-19 outbreak spreading across the state and into other states which are free of community transmissions.
Cochlear Limited (ASX: COH) leads the way
The Cochlear share price went up by more than 6% today. It was the best performer within the ASX 200.
The share price rose after an announcement that the US FDA has approved four of Cochlear’s new products.
The hearing device business has received approval for the Nucleus Kanso 2 Sound Processor, the Nucleus 7 Sound Processor for Nucleus 22 implant recipients, the Custom Sound Pro fitting software, and the Nucleus SmartNav system.
These four new systems will be commercially released in the US and Western Europe in the next few months, subject to local approvals.
The Nucleus Kanso 2 Sound Processor is the first and only off-the-ear cochlear implant sound processor to offer direct streaming from compatible Apple or Android devices. The Nucleus SmartNav system provides wireless, actionable, intraoperative insights to help surgeons with real-time navigation, helping improve surgical outcomes.
Adbri Ltd (ASX: ABC) share price collapses
The Adbri share price was crunched by 25.4% today after giving an update about its Alcoa lime supply contract.
Cockburn Cement, a subsidiary of Adbri (previously known as Adelaide Brighton), has been told by Alcoa of Australia that it won’t be renewing its current lime supply contract. The contract expires on 30 June 2021.
The contract makes up around $70 million in annual revenue for the ASX 200 business. However, the loss of the contract isn’t expected to hurt revenue until after June 2021. Management will evaluate potential actions. At this stage management can’t quantify the full financial impact of the contract loss.
Adbri CEO Nick Miller said: “We are disappointed with Alcoa’s decision to displace locally manufactured product with imports from multiple sources, particularly considering our almost 50-year uninterrupted supply relationship. We will work quickly to mitigate the impact on local jobs supporting our lime business and we remain committed to supplying our WA resources sector customers.”
Worley Ltd (ASX: WOR) wins another contract
The Worley share price dropped around 1% despite announcing another contract win today.
Worley has been awarded a services contract for its European battery material investment project in Finland. The project is to build a plant that will produce precursor battery material for the European market. The plant will be powered by electricity generated from renewable energy.
Worley will provide engineering, procurement and construction management services. The ASX 200 company has already completed early engineering and design services for the project. The plant will be built in Finland for the fast-growing electrical vehicle market.
Pointsbet Holdings Ltd (ASX: PBH) signs on with a US baseball team
Pointsbet just announced it has been chosen as the first sports betting partner for any Major League Baseball (MLB) team.
It has signed a multi-year deal to become the gaming partner of the Detroit Tigers MLB team. It’s also the first partnership with any professional sports team in Michigan.
Pointsbet will have television broadcast-visible branding at Comerica Park and will be featured on the Detroit Tigers Radio Network. It will also have a sponsored presence on the Tigers’ digital platforms. Pointsbet will also feature on ‘The Wood on Woodward’ which is a twice-weekly live streaming show. Finally, Pointsbet will appear in relevant apps.
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
More reading
- 2 dirt-cheap ASX shares to buy next week
- Here are the 10 shares that move global markets
- Where to invest $5,000 into ASX 200 shares immediately
- The latest ASX stocks to be downgraded by top brokers today
- Fund managers have been buying these ASX 200 shares
Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Cochlear Ltd. and Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Cochlear Ltd. and 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.
The post ASX 200 closes 0.4% higher, Cochlear share price up 6% appeared first on Motley Fool Australia.
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Wirecard’s Missing Executive Played Alleged Role in India Deals
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