Stock Pick

  • If I won the lottery I’d buy these 6 ASX shares

    Lottery Balls

    If I won the lottery I’d want to buy high-quality ASX shares to protect and grow my wealth.

    Winning the lottery would be a life-changing event. But I wouldn’t want to spend it all and be back to square one in a few years. I would want to invest it. That way I’d receive investment income for many years. It could fund my life forever! Shares are currently cheaper because of the COVID-19 pandemic. 

    These are the ASX shares I’d buy:

    Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) – 25% of the portfolio

    Soul Patts could be one of the best ASX shares for long-term reliability and dividends. It’s an investment conglomerate that has grown its dividend every year since 2000. That’s the best dividend growth record on the ASX.

    It’s invested in a variety of different listed and unlisted businesses. There’s good diversification with businesses like TPG Telecom Ltd (ASX: TPM), resources, agriculture and swimming schools.

    Soul Patts currently has a grossed-up dividend yield of 4.4%.

    Rural Funds Group (ASX: RFF) – 10% of the portfolio

    Rural Funds is a real estate investment trust (REIT) that owns a portfolio of farms. I think it’s a good ASX share for the long-term. Farmland has been a useful asset for many hundreds of years, I think that will continue to be the case for the rest of my lifetime.

    It aims to increase its distribution by 4% each year. With a starting FY21 yield of 5.7%, I think Rural Funds will generate pleasing income in the coming years. The ASX share’s weighted average lease expiry (WALE) is currently more than 10 years – that provides attractive income visibility and security.

    Magellan Global Trust (ASX: MGG) – 25% of the portfolio

    Magellan Global Trust is a listed investment trust (LIT) invests in the highest-quality global businesses it can find. That means it doesn’t invest in ASX shares.

    Some of the businesses that it’s invested in are Alibaba, Tencent, Facebook, Alphabet, Microsoft and Reckitt Benckiser. The LIT’s portfolio provides a good mix of growth shares and defensive shares.

    One of the most attractive things about this LIT is that it targets a distribution yield of 4%. That’s a solid yield in today’s low interest environment. The RBA rate is just 0.25% right now. 

    WAM Leaders Ltd (ASX: WLE) – 15% of the portfolio

    WAM Leaders is a listed investment company (LIC) that invests in the larger ASX shares.

    It’s a fairly active LIC, so it can move money to different shares around to outperform the ASX in good times or bad times. WAM Leaders can also increase its cash position to provide protection and buy opportunities if the ASX drops.

    The LIC has grown its dividend each year since FY17. It was formed in May 2016. It currently offers an annualised grossed-up dividend yield of 8.6%.

    Betashares FTSE 100 ETF (ASX: F100) – 15% of the portfolio

    UK shares are pretty similar to ASX shares in some regards. One of the most important similarities is that UK shares also have a reasonably high dividend payout ratio. That’s why this exchange-traded fund’s trailing underlying yield was close to 6% at the end of April 2020.

    This ETF provides attractive diversification with the 100 biggest businesses on the London Stock Exchange. Some of the businesses it’s invested in are healthcare giants GlaxoSmithKline and Astrazeneca, consumer product leaders Unilever and Reckitt Benckiser, resource giants BHP and Rio Tinto, global alcohol business Diageo and multinational bank HSBC.

    Brickworks Limited (ASX: BKW) – 10% of the portfolio

    This ASX share is one of the most reliable dividend options around. It hasn’t cut its dividend for over 40 years. Brickworks currently has a grossed-up dividend yield of 5.5%.

    It may be best known as a building products business, but it’s the other divisions which effectively fund Brickworks’ dividend. It owns almost 40% of Soul Patts, which as I mentioned above, pays a very reliable dividend.

    Brickworks also owns 50% of a compelling industrial property trust alongside Goodman Group (ASX: GMG). These properties are generating attractive rental income and the trust is working on a large new project at Oakdale in NSW. 

    Foolish takeaway

    Each of these ASX shares has a solid starting dividend yield and could generate attractive capital growth over time. If I won the lottery I think these picks would help fund my life for the foreseeable future.

    Once you’ve taken care of your income needs you could then go for some great ASX growth shares like these top picks…

    3 “Double Down” stocks to ride the bull market higher

    Motley Fool resident tech stock expert Dr. Anirban Mahanti has identified three stocks he thinks can ride the bull market even higher, potentially supercharging your wealth in 2020 and beyond.

    Doc Mahanti likes them so much he has issued “double down” buy alerts on all three stocks to members of his Motley Fool Extreme Opportunities stock picking service.

    See the Double Down Stocks

    *Extreme Opportunities returns as of June 5th 2020

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    Motley Fool contributor Tristan Harrison owns shares of MAGLOBTRST UNITS, RURALFUNDS STAPLED, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks, RURALFUNDS STAPLED, 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 If I won the lottery I’d buy these 6 ASX shares appeared first on Motley Fool Australia.

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  • Tax time is approaching – what you need to know

    Tax Time Ahead, asx 200

    Tax time is quickly approaching which means its time to get together your tax documents. Whether your tax return is completed yourself or through a tax agent, there are some things you need to know. 

    Let’s consider income and deductions that you may need to complete your return, specifically for investing in the S&P/ASX200 Index (ASX: XJO).

    Income

    For your ASX shares, you may have received dividends from, say, BHP Group Ltd (ASX: BHP) or from Scentre Group (ASX: SCG) and bought or sold investments. 

    Dividends are assessable income for investors and need to be reported on your annual tax return. To assist, you will need to keep on file your dividend statements. If you have misplaced the statements, it can be retrieved from a share registry such as Computershare Limited (ASX: CPU).

    In addition, organisations such as Scentre Group will issue a tax statement as they pay distributions from trusts. This will be needed to complete your tax return. 

    Furthermore, selling your shares attracts a capital gain event and you will need to keep a record of your purchase and sale contract.  

    Other types of investment income are interest and rent from investment properties.

    Deductions

    Investing in ASX shares can cost money in the form of borrowings, a subscription to an investment service or internet to manage investments. It’s important to know what you can claim to minimise your tax bill or maximise your tax refund.

    You may have borrowed money to acquire some shares. If you did, the Australian Taxation Office (ATO) advises that:

    • You can claim a deduction for interest charged on money borrowed to buy shares and other related investments that you derive assessable interest or dividend income from
    • Only interest expenses incurred for an income-producing purpose are deductible
    • If you used the money you borrowed for both private and income-producing purposes, you must apportion the interest between each purpose.

    In addition, other deductions from the ATO include:

    • financial advice fees
    • some travel expenses
    • the cost of specialist investment journals and subscriptions
    • borrowing costs
    • the cost of internet access
    • the decline in value of your computer.

    It’s important to be mindful of keeping your receipts. Unfortunately, receipts can fade. For this reason, I recommend taking a photo of any paper receipts or requesting a digital copy where possible.

    Foolish takeaway

    An often overlooked aspect of investing in ASX shares is the cost of tax when making investment decisions. It is important that tax is considered before any decision is made to buy and sell shares. Paying more tax than you need to may severely harm your investment returns. 

    Likewise, deductions can be used to decrease the amount of assessable income earned from investing. 

    You could maximise your capital gains with these ASX shares…

    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!

    Learn More

    *Extreme Opportunities returns as of June 5th 2020

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    Motley Fool contributor Matthew Donald owns shares of Scentre Group. The Motley Fool Australia has recommended Scentre 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.

    The post Tax time is approaching – what you need to know appeared first on Motley Fool Australia.

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  • Cloudflare Setting Up

    Cloudflare Setting UpCloudflare trading tightly on a weekly basis and holding support at 21day on a daily. Couple more weeks could have a base.

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  • Looking to buy a car? Hertz is selling thousands of used cars in its fleet in bankruptcy at bargain prices

    Looking to buy a car? Hertz is selling thousands of used cars in its fleet in bankruptcy at bargain pricesIf you're in the market for a used car, Hertz is selling vehicles in its fleet at discount prices. The company was hit hard in the COVID-19 pandemic.

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  • Chief Executive Officer of Frontline Management AS Robert Macleod Just Bought 5.0% More Shares In Frontline Ltd. (NYSE:FRO)

    Chief Executive Officer of Frontline Management AS Robert Macleod Just Bought 5.0% More Shares In Frontline Ltd. (NYSE:FRO)Investors who take an interest in Frontline Ltd. (NYSE:FRO) should definitely note that the Chief Executive Officer of…

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  • Building products maker ‘AZEK’ jumps in trading debut

    Building products maker 'AZEK' jumps in trading debut The AZEK Company CEO Jesse Singh joins Yahoo Finance’s Akiko Fujita to discuss the company’s first day of trading, as AZEK’s stock soars.

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  • Who Has Been Buying Cronos Group Inc. (TSE:CRON) Shares?

    Who Has Been Buying Cronos Group Inc. (TSE:CRON) Shares?We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is…

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  • Adobe Inc. Just Beat EPS By 7.7%: Here’s What Analysts Think Will Happen Next

    Adobe Inc. Just Beat EPS By 7.7%: Here's What Analysts Think Will Happen NextIt's been a good week for Adobe Inc. (NASDAQ:ADBE) shareholders, because the company has just released its latest…

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  • Robinhood Market Made Bursting Bubbles Wall Street’s Obsession

    Robinhood Market Made Bursting Bubbles Wall Street’s Obsession(Bloomberg) — Tuesday afternoon, a smallish Chinese real-estate firm, ticker symbol DUO, went crazy on the Nasdaq. Out of the blue, in a vacuum of news, depositary receipts of the Shenzhen-based outfit shot up 13-fold, taking its market capitalization to $4 billion.Nobody had a definitive reason why. But people could guess. Its name: Fangdd Network Group Ltd., sounds like the acronym for that amalgamation of American megacaps, the “Faangs,” comprising Facebook Inc. and others. Those shares were rallying, and it was easy to believe people had gotten it into their heads that Fangdd could — somehow — move along with them.A lot of the stock market has this tinge of late. Get people to believe that other people will believe that a stock will go up, and fear-of-missing-out will take over. More than 15,000 retail clients of the Robinhood investing app added DUO to their account last week, a phalanx of day traders marching to war.Newly minted equity experts in chat rooms, enticed by ever-falling fees, empower themselves and push shares of companies with not much profit into the stratosphere — sound familiar? Comparisons between today and the dot-com bubble write themselves, in the era of the Robinhood market. Whether this episode ends like that one has become an obsession of Wall Street.“Retail participation is at levels we haven’t seen in 20 years,” said Benn Eifert, managing partner of QVR Advisors. “In terms of the most dramatic rises in speculative behavior that’s generating many of the strangest outcomes in markets right now, it’s Robinhood-centric.”Everyone knows the dot-com bubble ended badly — in a two-year bear market that cut the value of the U.S. equity market in half. Then again, it took years for warnings to come true that people would pay a price for blind speculation. The Nasdaq 100 doubled in 1999 — fortunes were made for people who sold at the top. How many will pull that off this time is a question that haunts this and every speculative episode.Just because small-time investors are a presence doesn’t mean they’re wrong. To date — even with Thursday’s walloping — the lion’s share of their trades have been money makers. Stocks surging now are the ones that fell the most in February and March — evidence to some observers of a healthy buy-low bent. And while expected earnings may not justify the moves, buying equities when the Federal Reserve has all but guaranteed rock-bottom interest rates through 2022 may be a perfectly logical decision.Asked if the Fed was inflating markets on Wednesday, Chairman Jerome Powell said the central bank’s focus is the economy, the labor market and inflation, rather than the movement of asset prices in any direction.“The Fed doesn’t believe, and shouldn’t believe, that it can forecast the stock market, and therefore recognize a bubble in real time,” said Princeton University economist Alan Blinder, a former Fed vice chairman, in a Bloomberg Television interview. “They’re pretty easy to recognize after the fact, after they burst. But, in real time, in a predictive way, pretty much impossible.”Also: it’s not like people never get punished for hitching on to rallying stocks. A day after jumping 395%, Fangdd Network gave about four-fifths of the gain back. And the whole market gave up $2 trillion of value when the S&P 500 lurched almost 6% a day later.Still, by conventional measures, valuations are stretched, even after Thursday’s drop. The benchmark’s 12-month forward price-earnings ratio at 21.6 still ranks among the highest in two decades. Versus company sales, the Nasdaq Composite Index is trading around the most expensive levels since at least 2001. Then again, if the dot-com crash is the standard, prices would have to go significantly higher to match that episode.How crazy did it get this week? This is a market where a company with forecasts for almost no revenue jumped above a $30 billion market-cap partly because it used inventor Nikola Tesla’s first name as its own. Small Chinese firms that trade in the U.S. surged on no news, with percentage gains in the triple digits. Bankruptcy stocks are the flavor of the day, shares doubling left and right, with Hertz Global Holdings Inc. the poster child.Over three days, just weeks after filing for bankruptcy, Hertz surged 577%. The next session, the struggling car-rental company fell 39% in the first 15 minutes of trading, only to erase those gains and trade positive at one point in the day. By the end of the week, Hertz got approval from a bankruptcy judge to let it sell up to $1 billion of new shares that are potentially worthless. The stock jumped 37% Friday.Trading volume in Hertz shares has surged in June — 63 times what was usual in 2019. The number of Robinhood users holding the stock has swelled to 160,000 — that’s roughly 100,000 more than just a month ago, according to website Robintrack, which uses the brokerage’s data but isn’t affiliated with it. Near 140,000 Robinhood users now hold Nikola Corp, more than do Netflix Inc.“It is definitely a sign of a bubble,” said Matt Maley, chief market strategist for Miller Tabak. “That’s another sign of froth — people deciding, ‘I just need to bet, therefore I’ll bet on anything.’ And even though they don’t know anything about the stock market, they’re betting on it now. You’ve also seen that pick up in the options market, which is obviously a lot more speculative than the regular market.”Retail money is taking a bigger share of volume. Small-account trades, those with $2,000 or less in investment, have increased to 2.3% of the total, up from 1.5% at the beginning of the year, data compiled by Goldman Sachs show. A similar trend showed up in the options market, with one-contract transactions surging to 13% from roughly 9%. They’re relentlessly bullish. The smallest of traders bought more than 14 million speculative call options in the week ended June 5, according to Sundial Capital Research. That’s a record, by far.Traders are taking to chatrooms to hype stocks and brag about their winnings, reminiscent of the late 20th century. Users of a Reddit forum called r/wallstreetbets, or r/WSB for short, have shown an astonishing capacity to move prices. Back in February, companies including Virgin Galactic Holdings Inc. and Plug Power Inc. went berserk after being mentioned on the board.In hindsight, maybe there was a bubble back then — one that burst on Feb. 19. Shares of Virgin Galactic and Plug Power both peaked that day after eye-popping runs. So too did the S&P 500, before the benchmark began its $10 trillion plunge. Four months and an equity round-trip later — the Nasdaq 100 reaching 10,000 for the first time — much of it has been re-inflated. Tuesday, a post on the r/WSB cited Sundial data showing small-trader call buying made up more than 50% of total volume in the week ended June 5, the most since 2000. “Good job,” it read.“We have Instagram influencers and now we have Reddit influencers,” QVR’s Eifert said. “They post a trade idea in an option, in a single name, and within an hour you see hundreds of thousands of call options placed, which is totally insane.”Andrew Adams, a strategist at Saut Strategy, says his anecdotal indicators are “flashing warning signs like crazy.” He spent the first part of the week trimming his positions. His friends and family who don’t normally follow the stock market have been asking him what to buy. His inbox has emails saying: “I’ve missed this move but now want to buy, what should I do?” People are cracking jokes about Wall Street legends who denounced the rally.“I even had one stock-market novice friend text me to say that he’s been making a lot of money buying call options since he’s been working from home lately and he’s wondering if he should just quit his job to trade for a living,” said Adams. “I’ve learned from past experience to be very careful when we start seeing stuff like that.”Back in the dot-com days, there was a belief that no matter a company’s profits or sales, someone would come along to scoop up shares at an ever higher price — a “greater fool.” Online grocer Webvan Group Inc. spiked 66% in its first day of trading. When Drkoop.com Inc., an online consumer health-care network, went public, shares jumped 62% that first day. By 2001, both companies had failed.Today, TheGlobe.com Inc. trades for less than a penny, but back in its 1999 heyday, shares of the internet destination once surpassed $40. One day in April after announcing a stock split the stock surged 34% and more than 14 million shares changed hands, even though the company was still unprofitable.“In ‘99 you wanted to get the next trade for the next day and the next week. That’s a bit what it feels like here,” said Mark Wagner, director of investments at Campbell Wealth Management. “You’re just saying, how can I in the short-term make something from this? There’s similarities to it, but the pace of it seems to be much more intense and more broad-based now.”The buying stampede has whipped up price momentum to levels not seen in almost three decades. At Monday’s close, 224 members in the S&P 500 had their 14-day relative strength index, or RSI, exceeding 70, a threshold considered by chartists as a sign of stocks running too far too fast. That’s the most since 1991.Companies hit hardest in the Covid crash, like airlines and cruise lines, are surging. Next to it all is robust retail buying. The 10 Russell 3000 stocks that saw their popularity rise most on the Robinhood investing app — including American Airlines Group Inc. and Norwegian Cruise Line Holdings Ltd. — rose an average of 93% in the month through Monday. Average daily volume for these stocks has occasionally been 30 times what it was in 2019.To Jim Bianco, president and founder of Bianco Research LLC, it all comes down to the Fed structuring the market so that everyone always wins.“That’s why we’re seeing a giant rush of small retail investors and everybody else into the market,” Bianco told Bloomberg Television Wednesday. “When you go into the market, you go to the riskiest end of the market, so you buy bankrupt companies, you buy beaten down airlines, you buy cruise ships, you buy retailers because they will benefit the most from a support system where everything is targeted, and the markets will always go up.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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  • Here’s Why Cedar Fair (FUN) Stock is an Attractive Pick for Investors

    Here’s Why Cedar Fair (FUN) Stock is an Attractive Pick for InvestorsMiller Value Partners recently released its Q1 2020 Investor Letter, a copy of which you can download below. The Miller Value Partners Opportunity Equity Fund posted a return of -38.4% for the quarter (net of fees), underperforming its benchmark, the S&P 500 Index which returned -19.6% in the same quarter. You should check out Miller […]

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