Masimo rose above a 214.24 early entry, following a rebound from 10-week line last week. Conventional buy point is 258.10. Masimo did very well during the market crash, was an early breakout and has consolidated again.
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The Super Retail Group Ltd (ASX: SUL) share price could be a bargain right now, in my view.
Shares in the Aussie retailer fell 4.8% lower yesterday to $7.80 per share. It was far from the only ASX 200 share falling lower as the S&P/ASX 200 Index (ASX: XJO) closed down 0.5% at 6,001.60 points.
So, after a big share price fall, is Super Retail worth a look right now?
I think the main cause for concern is the rising coronavirus cases across Australia. The pandemic continues to spread in Victoria and somewhat in New South Wales as well.
That could spell trouble for the Aussie economy and lead to tightening restrictions. In turn, a reduction in foot traffic and potentially discretionary income could hit the retail sector hard.
These fears saw investors head for safety on Monday, which pushed the Super Retail share price lower.
There’s no denying there could be some impact on retailers from tightening restrictions a second time round. However, that was also the case in March when the ASX 200 entered a bear market.
But Super Retail has been relatively resilient in the face of these challenges. In fact, after bottoming out at $2.99 per share in March, the Super Retail share price has rocketed 160% higher since then to $7.80 per share. That’s on the back of strong earnings from Super Retail’s online channels, in particular a surge in sales from its Supercheap Auto and Rebel Sport brands.
I don’t see any reason why that trend can’t continue if we see another lockdown. Yes, there will be some customers who have already bought what they needed. But a targeted strategy towards boosting online sales could pay dividends for the Super Retail share price and the group’s investors.
On top of that, shares in the Aussie retailer are now down 25.3% from their 52-week high. That could mean that now is the chance to snap up a bargain.
Leading fundie Paul Xiradis from fund manager Ausbil holds a similar view. According to a recent client memo from Mr Xiradis, Ausbil’s base case for Super Retail is for a quick recovery.
That represents a bullish scenario that could see the Super Retail share price and others like JB Hi-Fi Limited (ASX: JBH) outperform in 2020.
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Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Super Retail 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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It wasn’t a good start to the week for Bendigo and Adelaide Bank Ltd (ASX: BEN) shares.
The company’s share price slumped 5.17% as ASX bank shares were hammered in Monday’s trade. The Aussie banks led the S&P/ASX 200 Index (ASX: XJO) 0.5% lower to close at 6,001.60 points.
But is the Aussie bank cheap after yesterday’s slump or does it have further to fall in 2020?
The big factor in Monday’s trading sessions was, you guessed it, coronavirus concerns.
An increase in cases across Victoria and New South Wales once again spooked investors. There are increasing talks of tighter restrictions that could hurt Australia’s economic rebound.
The banks are exposed to a deteriorating economy. This could be through more home, personal and business loan defaults and lower earnings.
That sent investors heading for the exits with Bendigo and Adelaide Bank shares closing down 5.17% on Monday.
I think the best way to evaluate Bendigo and Adelaide Bank shares is by benchmarking them against their peers.
Bendigo is the largest Australian retail bank outside of the big four. That means banks like Commonwealth Bank of Australia (ASX: CBA) or National Australia Bank Ltd (ASX: NAB) might be a reasonable benchmark.
Commonwealth Bank shares trade at a price to earnings (P/E) ratio of 13.1 while NAB shares trade at 16.0. However, Bendigo and Adelaide Bank shares have them both beaten with a P/E of just 11.5.
That could mean that the Aussie bank is a good relative buy versus its peers. Unfortunately for us keen-eyed Fools, it’s not that simple.
For one, P/E ratios and dividend yields are a bit unreliable right now. No one knows just how different the next period’s earnings will be from the last period due to the pandemic.
It’s also arguable that Bendigo is in a worse position compared to the big four. Bendigo is a smaller bank and has heavy regional exposure. That could mean more defaults in hard-hit regions and difficulty to compete on pricing with the majors.
On the other hand, Bendigo is looking towards the long-term. The Aussie bank owns neobank Up which leaves it well-placed for any potential shift in the banking sector.
ASX bank shares like Bendigo and Adelaide Bank are hard to value right now. I think it’s too uncertain to be buying in for a marginally lower P/E ratio under the current conditions.
Personally, I would be waiting until the bank’s August earnings result for a better idea of whether to buy or not.
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Motley Fool contributor Ken Hall 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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The 2020 ASX share market crash has caused a lot of pain for many S&P/ASX 200 Index (ASX: XJO) investors. In the short run, further declines could happen from a second wave of coronavirus and its potential impact on the world economy.
Here are 3 investing strategies to profit from a potential second ASX share market crash in 2020:
ASX 200 shares are by no means the only asset class you should hold in a diversified portfolio during a share market crash. Two “safer” options are gold and cash.
Investors looking for exposure to gold could consider miners like Northern Star Resources Ltd (ASX: NST), physical gold, or an ETF like Perth Mint Gold (ASX: PMGOLD).
Perth Mint Gold has a very low management fee of just 0.15%. Another great feature is that unlike many gold exchange traded products, PMGOLD can be physically redeemed for any of The Perth Mint’s bullion coins and bars.
If you’re particularly bullish on the safe-haven metal during a 2020 share market crash, investing in a gold miner should provide you with additional leverage to the gold price, meaning that you could have greater upside potential. However, with greater potential comes greater risk.
Cash is a great asset to hold for both optionality and peace of mind. More risk averse investors should hold some cash to give them the confidence to hold their growth stocks through any stock market turbulence. More aggressive investors can use cash to “buy the dip”, which I explain in more detail below.
Shorting stocks or the share market is my least favourite option to profit from a pull back. Why? Because it requires you to successfully time the market. Maybe you can, but I know that I certainly can’t do that.
With that being said, if you have a sound understanding of economics or investor sentiment, this strategy can make you money. The easiest way to take a position like this is through an ETF like BetaShares Australian Equities Bear Hedge Fund (ASX: BEAR).
You’ve heard my least favourite way to invest during a share market crash, now here is my favourite. Buy ASX 200 shares! If you remain fully invested, I would recommend dollar cost averaging a portion of each paycheck into the market. If you have cash waiting to be deployed, I still think that you should stage it into shares to avoid missing out on depressed prices.
In my view, you should look for high quality, profitable companies with strong balance sheets, and growth companies that have seen their lofty valuations cut more than their fundamental business. Perfect examples of these are CSL Limited (ASX: CSL) and ETFS FANG+ ETF (ASX: FANG).
Over the long-term, high quality ASX 200 shares should continue to be a life changing asset to own. Potential share market crash or not, continuing to invest in the right businesses will stand you and your family in good stead.
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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Lloyd Prout has no position in any of the stocks mentioned and expresses his own opinions. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL 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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I believe that ASX dividend shares are great options for income.
The official RBA interest rate is now just 0.25%. You won’t get much interest from a bank account. I’d want to make my money work harder than that, so I’d go for ASX shares that will be good dividend picks.
However, I don’t think that most ASX blue chips are the answer. We have seen dividend cuts from shares like National Australia Bank Ltd (ASX: NAB) and Sydney Airport Holdings Pty Ltd (ASX: SYD) during this COVID-19 era.
I think these ASX dividend shares could be much better ideas for long-term income:
Future Generation is a listed investment company (LIC). The job of a LIC is to invest in other assets on your behalf. LICs are good options to be ASX dividend shares because they can turn investment returns (including capital growth) into a consistent dividend for their shareholders.
This LIC is quite different to most other LICs on the ASX. It doesn’t charge any management fees or performance fees. Instead, it donates 1% of its net assets each year to youth charities. Future Generation invests in the funds of fund managers who invest in ASX shares. These fund managers don’t charge any fees so that Future Generation can make those donations to youth charities.
Its investment returns are compelling. At the end of June 2020 it reported that over FY20 its gross portfolio performance showed a decline of just 1.2%, outperforming the S&P/ASX All Ordinaries Accumulation Index by 6% (which fell 7.2%).
At the current Future Generation share price it offers a grossed-up dividend yield of 7%. The share price is trading at an 11.5% discount to the June 2020 net tangible assets (NTA) per share. That means you’re buying $1 of assets for less than $0.90.
Soul Patts has one of the best ASX share dividend records around. It has grown its dividend every year since 2000. It has actually been listed since 1903 and it has paid a dividend every single year including through world wars, recessions, the Spanish Flu and any other disaster you can name over the past century.
It’s an investment house that’s invested in a variety of listed and unlisted businesses. Some of its main ASX share investments are: TPG Telecom Ltd (ASX: TPG), Brickworks Limited (ASX: BKW), Milton Corporation Limited (ASX: MLT), Bki Investment Co Ltd (ASX: BKI), Palla Pharma Ltd (ASX: PAL) and Clover Corporation Limited (ASX: CLV).
Some of its unlisted assets include swimming schools, agriculture, luxury retirement living and soon it will be involved in regional data centres.
Soul Patts has defensive assets which are well diversified. The investment conglomerate continues to diversify its portfolio and it has a strong focus on cashflow. Each year it tells investors what its regular operating cashflows are – this is the investment income minus operating expenses (and a few other small items). Soul Patts funds its dividend from its annual net cashflow. In FY19 it only paid out 80% of its net cashflow.
At the current Soul Patts share price it offers a grossed-up dividend yield of 4.2%.
I think APA is a high-quality ASX dividend share. It has increased its distribution every year for the past decade and a half.
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.
It generates a reliable source of cashflow from its national customer base. This allows APA to pay a dependable distribution to shareholders each year. That’s why it was able to stick to its annual FY20 guidance of 50 cents per unit.
Using the FY20 annual distribution, at the current APA share price, it’s trading with a 4.5% distribution yield. I think it’s very likely that FY21 will see another increase for investors.
I really like all three of these ASX dividend shares. At the current prices I think Future Generation looks like the best value, but Soul Patts has a great dividend history and it’s the one that I’d rely on for my investment income in retirement because of its reliability.
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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Tristan Harrison owns shares of FUTURE GEN FPO 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 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.
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Congress has authorized $3.6 trillion in stimulus money to help offset the punishing cost of the lockdowns and business closures caused by the coronavirus pandemic. Congress is now developing another massive round of stimulus spending that will probably top $1 trillion. Yahoo Finance’s Rick Newman joins The Final Round to discuss.
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Fortunately for income investors in this low interest rate environment, there are a good number of shares on the ASX paying shareholders generous dividends.
Three which I think are quality options right now are listed below. Here’s why I would buy them:
I think ANZ could be a good option for income investors. I believe the selloff of its shares has been overdone and has left them trading at an attractive price of just 13x estimated FY 2021 earnings and 0.9x FY 2021 book value. And while dividend cuts are inevitable, I’m expecting the banking giant to still pay one which provides a very generous yield next year. I’m forecasting a partially franked dividend of $1.05 per share in FY 2021. Based on the current ANZ share price, this will provide investors with a very generous forward 5.7% yield.
Another dividend share to consider buying is BHP. I believe the Big Australian is well-positioned to generate strong free cash flows in FY 2020 and FY 2021 thanks to its low cost operations and favourable commodity prices. This is particularly the case for its iron ore operations, which are benefiting from spot prices of ~US$110 a tonne. This compares to its full year cost guidance of just US$13-14 per tonne for the Western Australia Iron Ore operation. Based on the latest BHP share price, I estimate that its shares offer investors a forward fully franked ~4.9% dividend yield.
A final ASX dividend share to consider buying is Woolworths. I think the conglomerate would be a good option for income investors due to its quality brands, their defensive qualities, and their positive long term outlooks. Combined with its supply chain improvement plans, I believe the company is well-positioned to continue growing its earnings and dividend at a solid rate over the next decade. Based on the current Woolworths share price, I estimate that its shares provide investors with a fully franked 3% FY 2021 dividend yield.
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 James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of 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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