I like to keep an eye on the substantial shareholder notices that are released to the ASX. This is because these notices give you an idea of which shares large investors, asset managers, and investment funds are buying or selling.

Two notices that have caught my eye this week are summarised below. Here’s what these fund managers have been buying:

Adairs Ltd (ASX: ADH)

A notice of initial substantial holder reveals that Commonwealth Bank of Australia (ASX: CBA) has been buying this homewares retailer’s shares. According to the notice, the banking giant and its subsidiaries have been building a position in the company since the middle of March. This was at a time when the Adairs share price had crashed lower at the height of the market volatility. In fact, the bank was able to pick up a large parcel of shares for as low as 63 cents each.

It has continued to buy through the recovery and was buying shares as recently as 15 July. That purchase brought its holding to just over 8.6 million shares, which represents a 5.09% stake in the company. At the time of writing the Adairs share price is trading at $2.37, which isn’t overly far from its 52-week high of $2.77. This certainly appears to have been a successful investment by Commonwealth Bank.

Uniti Group Ltd (ASX: UWL)

Another notice of initial substantial holder shows that Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) has become a major shareholder of this telecommunications company. According to the notice, the investment house has made a series of share purchases between 1 June and 13 July. The most recent purchase at the start of the week was for $4 million worth of shares and took its holding to a total of 24,906,745 shares. This equates to a 5.05% stake in Uniti Wireless.

I estimate that the average price it paid for the shares in this notice was approximately $1.65. So with the Uniti Wireless share price currently trading at $1.46, Washington H. Soul Pattinson clearly sees a lot of value in them at this level. And given its long track record of successful investments, it could pay to follow this trade.

More reading

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• Why Goldman Sachs’ revenue surge bodes well for the Macquarie Group share price
• Why I would buy BHP and CBA shares for dividends
• Biggest dividend cuts in 10 years to hit ASX investors next month
• This could be a problem for the Afterpay share price

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended 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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Investors may feel like they have missed a significant buying opportunity with both the S&P/ASX 200 Index (ASX: XJO) and All Ordinaries (ASX: XAO) bouncing back more than 30% since their March lows. While the market may continue to crawl higher, here are two ASX shares that I feel have remained dirt cheap.

2 ASX shares that are still dirt cheap

1. Money3 Corporation Limited (ASX: MNY) 

Money3 provides automotive finance for the purchase and maintenance of vehicles in Australia and New Zealand. The company estimates that 1 in every 500 vehicles in Australia and 1 in every 800 vehicles in New Zealand have current Money3 loans. Despite the economic uncertainty amidst COVID-19, the company highlighted in late April that its cash collections over Easter were superior to the prior corresponding period (PCP) and had not been materially impacted by the pandemic to date. 

Money3 believes that it is well positioned to be patient and opportunistic in M&A activity or originating new organic growth when demand returns to pre-pandemic levels. In Australia, government stimulus will have a positive impact on its customers’ ability to continue paying their loans, while new loan originations are continuing to customers with income. The company’s New Zealand business believes that demand for automotive finance will return as restrictions are lifted. 

In its YTD March 2020 unaudited financial results, Money3 saw revenues increase 44.4% on the PCP while normalised NPAT increased 49.2%. A 5 cent dividend was paid out following strong earnings, representing a dividend yield of approximately 5.90%. The Money3 share price trades at a relatively low price-to-earnings (P/E) ratio of just 10.4. Given its growth potential and market leading dividend, I believe Money3 is one of the cheapest ASX shares out there. 

2. Bell Financial Group Ltd (ASX: BFG) 

Bell Financial Group is an Australian-based provider of stockbroking, investments and financial advisory services to private, institutional and corporate clients. On 10 July, the company advised that it expects to report a first half 2020 profit before tax of approximately $23.5m, an increase of around 5% on the PCP. The key drivers of growth were its subsidiaries, Bell Potter Capital and Third Party Platform, delivering 120% and 140% respective increases in unaudited profit before tax ($2.4 million and $3.3 million respectively). 

I believe Bell Financial’s services will continue to be highly sought after despite challenging economic conditions. Demand may be driven by factors such as increased trading volumes from all types of investors, companies requiring additional capital/capital raisings and access to financial advisory services for things such as potential M&A activity. Much like Money3, the Bell Financial Group share price trades at a P/E of just 12.08 while paying a dividend yield of approximately 6.5%.

More reading

• These ASX fintech shares are tackling COVID-19 head on
• Safe ASX 200 dividend shares to buy today

Motley Fool contributor Lina Lim 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 tech sector has once again been one of the best places to invest your money over the last 12 months.

Despite the pandemic, during this time the S&P/ASX 200 Info Tech index has generated a return of over 22% for investors.

As a comparison, the S&P/ASX 200 Index (ASX: XJO) has fallen 10% over the same period.

The good news is that I believe this outperformance can continue for many years to come, which could make investing in the tech sector a great idea.

But which ASX tech shares should you buy? Two to consider buying are as follows:

Altium Limited (ASX: ALU)

The first ASX tech share to consider buying is Altium. I think it is a great long-term investment option due to its position as the leading electronic design software provider in an Internet of Things (IoT) industry which is expected to grow materially in the future.

According to research by McKinsey, the worldwide number of IoT-connected devices is projected to increase to 43 billion by 2023. This will be an almost threefold increase from 2018. I expect this to lead to increasing demand for its software, which should drive strong earnings growth over the long term.

Appen Ltd (ASX: APX)

Another ASX tech share which has exposure to a rapidly growing market is Appen. It is a global leader in the development of high-quality, human-annotated training data for machine learning and artificial intelligence (AI).

According to a recent presentation, management expects the AI market to grow to be worth upwards of US$191 billion per annum by 2025. With approximately 10% of this spending estimated to relate directly to data labelling, I believe it is well-placed to continue its impressive earnings growth for many years to come. This could make the Appen share price a market beater over the 2020s.

More reading

• Top ASX dividend shares to buy in July 2020
• 3 must-buy ASX growth shares for July
• 2 ASX tech shares to buy and hold beyond 2025
• 3 top ASX growth shares I’ll buy if the ASX crashes again
• Top brokers name 3 ASX 200 shares to buy today

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 Altium. 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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At present the base rate on an Australia and New Zealand Banking GrpLtd (ASX: ANZ) term deposit is just a paltry 0.75% per annum

With a rate as low as that, it is almost impossible for investors to generate a sufficient income to live from.

For example, even if you were to invest $2 million into these term deposits, you’d only receive $15,000 back at the end of the term.

Fortunately, better yields can be found on the Australian share market.

Two ASX dividend shares that I would buy are listed below. Here’s why I like them:

BWP Trust (ASX: BWP)

I think BWP Trust would be a great alternative to a term deposit. It is the largest owner of Bunnings Warehouse sites in Australia with a portfolio of 68 stores leased to the hardware giant. I think Bunnings is a quality tenant to have, especially given how it has thrived during the pandemic. Combined with government stimulus, which is supporting the home improvement market, I believe there is a very low risk of rental defaults or stores closures in the near term. This should mean BWP is in a position to continue growing its income and distribution at a solid rate for the foreseeable future. Based on the current BWP share price, I estimate that it offers a generous 4.7% FY 2021 distribution yield.

Transurban Group (ASX: TCL)

Another ASX dividend share to consider buying instead of a term deposit is Transurban. While it has had a tough few months because of the pandemic, with restrictions now easing, traffic volumes and toll revenues have been recovering. I’m not overly confident the company will pay a final distribution in FY 2020, but I expect its distributions to return to attractive levels next year. I now expect the company to pay shareholders a 44 cents per unit distribution next year. Based on the current Transurban share price, this equates to a 3.2% distribution yield.

More reading

• BKI Investment share price rises despite 35% drop in FY20 profit
• Why this fundie sees an ASX bank share recovery
• Are Transurban shares a hot buy today?
• Forget property! I’d buy these ASX dividend shares instead
• Why Goldman Sachs’ revenue surge bodes well for the Macquarie Group share price

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Transurban Group. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Most investors will be sitting on their hands with the reporting season this close, but top brokers are urging you to buy these S&P/ASX 200 Index (Index:^AXJO) shares today.

The profit results season kicks off in just two weeks and many are understandably nervous due to the uncertainty caused by the COVID-19 pandemic.

While this isn’t usually the time to be making big bets, there are two ASX stocks that most leading brokers are recommending investors buy.

Conviction buy

The QBE Insurance Group Ltd (ASX: QBE) share price is one that’s expected to outperform with Goldman Sachs putting the insurer on its conviction buy list.

While the broker acknowledged the “great deal of uncertainty” as we head into QBE’s result, it’s confident the stock is cheap after undertaking a mark-to-market assessment of QBE’s investments in the June quarter.

Goldman’s 12-month price target on the stock is $11.26 a share.

Restarting dividends

Citigroup is also bullish on the stock as it reiterated its “buy” rating on QBE yesterday. The broker believes conditions have improved enough for the insurer to issue a token 2 cents a share dividend next month.

“QBE has a number of transitory uncertainties causing the market some concern,” said Citigroup.

“However, we see ongoing improvements in the rate environment, which should ultimately lead to underlying margin improvement, as likely to be a more lasting share price driver.”

Citigroup lifted its price target on QBE to $11 from $10.55 a share.

Regaining its shine

Another ASX 200 stock that’s shaping up to be a popular “buy” rated stock among brokers is the Alumina Limited (ASX: AWC) share price.

Credit Suisse become the latest believer in the stock as it upgraded Alumina to “outperform” from “neutral” today.

Demand for aluminium is improving, imports of alumina into China remains strong and the price increase in aluminium is running ahead of Alumina’s share price.

“No disputing the global macro outlook remains uncertain and we still expect volatility,” said Credit Suisse.

“That said, we see enough indicators to suggest AWC can perform well over the next 12 months.

“In the very least the assets and balance sheet provide a reasonable hedge to the downside if conditions and pricing turn for the worse again.”

Potential upgrade cycle

UBS is another bull. The broker reiterated its “buy” call on the stock after Aloca (Alumina’s joint venture partner) posted a second quarter result that was well ahead of expectations.

What’s more, UBS said that Alumina’s earnings before interest, tax, depreciation and amortisation (EBITDA) margin would jump to US$70 a tonne from US$64 a tonne if the spot commodity price was used.

The broker’s 12-month price target on AWC is $2 a share.

More reading

• ASX 200 flat: Westpac class action, Rio Tinto Q2 update, travel shares sink
• BlueScope’s earnings to halve as it takes $200m write-down
• Why Alumina, BWX, Life360, & Perpetual shares are charging higher
• Why this fundie sees an ASX bank share recovery
• Are Transurban shares a hot buy today?

Motley Fool contributor Brendon Lau 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 S&P/ASX 50 index is home to 50 of the highest quality and well-known companies in Australia.

While I wouldn’t necessarily be buying all the shares on the index, I think there are some quality options for investors to consider.

Three ASX 50 shares I would buy today are listed below:

a2 Milk Company Ltd (ASX: A2M)

The first ASX 50 share to consider buying is this infant formula and fresh milk company I think a2 Milk Company is a great option due to its very positive long term growth outlook. This is due to the expansion of its fresh milk footprint, potential earnings accretive acquisitions, and the increasing demand for its infant formula in China. In respect to the latter, although a2 Milk Company is generating significant sales in the China, it still only has a modest consumption market share of 6.6%. I believe this gives it a long runway for growth in the country over the next decade.

BHP Group Ltd (ASX: BHP)

Another ASX 50 share to consider buying is BHP. I believe the Big Australian is the highest quality option in the resources sector thanks to its diverse and world class operations. In addition to this, BHP is currently benefiting greatly from favourable commodity prices. This is especially the case with iron ore prices, which are still trading above US$100 a tonne. This is materially higher than its operating costs and means its iron ore operations are generating huge free cash flows. And with its balance sheet in a very strong position, the majority of this is likely to be returned to shareholders through dividends.

Goodman Group (ASX: GMG)

A final ASX 50 share to consider buying is Goodman Group. It is an integrated commercial and industrial property group with a high quality portfolio of assets. I think it is one of the best long term options on the index due to the positive outlooks of its assets. This is due to their exposure to structural tailwinds such as ecommerce. I expect these assets to be in demand with their blue chip tenants for many years to come, which should underpin solid income and distribution growth over the next decade.

More reading

• Where to invest $1,000 into ASX shares immediately
• Why this fundie sees an ASX bank share recovery
• Top ASX dividend shares to buy in July 2020
• Should you buy Fortescue shares at an all-time high?
• Why I would buy BHP and CBA shares for dividends

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of A2 Milk. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The BKI Investment Co Ltd (ASX: BKI) share price is up by 1.03% to $1.48 today, following the release of the company’s full year results. BKI Investment announced large declines across the board, citing difficult trading conditions. Profit was down 35% as several companies held by BKI announced the cancellation of dividends.

What does BKI do?

BKI is a research-driven listed investment company (LIC). Through BKI’s research driven, active management approach it invests for the long term in profitable, well managed companies that offer a compelling yield and growth opportunities. 

The company boasts 8.9% total shareholder returns over a 15-year period, beating its benchmark S&P/ASX 300 Accumulation Index by 0.5%. BKI has paid out over $700 million in dividends and franking credits to shareholders since listing in 2003. At the time of writing, BKI’s trailing dividend is 5.7%.

BKI’s full year results

Today, BKI released results from what it labels “a difficult year”. Some of the key points from the announcement include:

• Revenue down 14% to $46.7 million (excluding special investment revenue)
• Net operating profit after tax down 35% to $48.6 million (including special investment revenue)
• Earnings per share down 35% to 6.63 cents
• Total dividend for FY20 down by 29% to 6.945 cents a share.

BKI’s earnings were largely affected by a number of dividend cancellations for some of its largest holdings. These include Harvey Norman Holdings Limited (ASX: HVN), Sydney Airport Holdings Pty Ltd (ASX: SYD), Australia and New Zealand Banking Grp Ltd (ASX: ANZ) and Westpac Banking Corp (ASX: WBC). 

Despite this, BKI announced it would still be paying a special dividend of 1 cent per share. This was largely thanks to a special dividend received from the company’s holding in TPG Telecom Ltd (ASX: TPG).

While the results above may seem dire, they look to have largely already been priced in to the BKI Investment share price, given shares are up by more than 1% at the time of writing.

In terms of portfolio management, BKI made a number of sales across FY20, including exiting positions in Boral Limited (ASX: BLD) and Ampol Ltd (ASX: ALD) (formerly Caltex). It divested completely from ANZ following the bank’s failure to pay an interim 2020 dividend, as well as Challenger Ltd (ASX: CGF) and CIMIC Group Ltd (ASX: CIM).

BKI invested $128 million during FY20, with large investments in a number of ASX blue-chips such as BHP Group Ltd (ASX: BHP), Macquarie Group Ltd (ASX: MQG) and Transurban Group (ASX: TCL). 

Commenting on the FY20 results and the impact of COVID-19, BKI’s co-portfolio manager Tom Millner said:

We believe that every Australian company has been impacted by the COVID-19 economic crisis, and as we’ve already seen, it has had a direct negative impact on earnings, balance sheet strength and dividend distributions on many companies within our market. Unfortunately, the way we are viewing the broader economy suggests that the current situation may deteriorate over the next 6-12 months.

About the BKI share price

The BKI share price has had a rocky year, losing 13.74% in 2020 so far and underperforming the All Ordinaries (INDEXASX: XAO), which is down 10% in the same period. BKI shares are down 11.74% on this time last year.

More reading

• These ASX dividend shares are better than term deposits
• Brokers name 3 ASX shares to buy right now
• ASX 200 flat: Westpac class action, Rio Tinto Q2 update, travel shares sink
• Westpac share price on watch after being hit with flex commissions class action
• Why this fundie sees an ASX bank share recovery

Motley Fool contributor Daniel Ewing owns shares of Sydney Airport Holdings Limited. The Motley Fool Australia owns shares of and has recommended Challenger 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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