If you’re looking to invest in shares following the recent market crash, then the three listed below could be good options.

I believe all three have the potential to provide investors with strong returns over the next decade. Here’s why I would buy them:

a2 Milk Company Ltd (ASX: A2M)

I’m a big fan of a2 Milk Company due to its long track record of earnings growth, strong and unique brand, massive market opportunity, and sizeable cash balance. Combined, I believe these have positioned a2 Milk Company to continue its strong form for many more years to come. This certainly is expected be the case this year. Management recently upgraded its guidance for the full year thanks to stronger than expected infant formula demand. The top end of its guidance range implies year on year revenue growth of 34.1% and EBITDA growth of 35.4%.

BetaShares Asia Technology Tigers ETF (ASX: ASIA)

If you’re interested in investing outside Australia then the BetaShares Asia Technology Tigers ETF could be a good option. This exchange traded fund gives investors exposure to many of the biggest and brightest tech companies in the Asian market. These companies are revolutionising the lives of billions of people in the region and look well-positioned for strong growth over the next decade. The fund includes ecommerce giant Alibaba, search engine company Baidu, and Afterpay Ltd (ASX: APT) shareholder and WeChat owner, Tencent.

Freedom Foods Group Ltd (ASX: FNP)

I think this diversified food company could be a good option for investors. Over the last couple of years it has been investing heavily in its future growth. This investment period has now come to an end, leaving Freedom Foods well-placed to reap the benefits. I believe it is in a position to deliver strong earnings growth over the coming years. Especially given the increasing demand its Plant Based Beverage and Dairy Nutritionals businesses continue to experience thanks to the healthy eating trend.

More reading

• If you invested $10,000 in the Afterpay IPO, this is how much you’d have now
• Is the Zip share price in the buy zone?
• Is $1,000 of A2 Milk shares a good investment?
• Why Afterpay, Flight Centre, Mesoblast, & Sezzle shares are dropping lower
• Safe dividend stocks to buy today for the COVID-19 world

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended BetaShares Asia Technology Tigers ETF. The Motley Fool Australia owns shares of A2 Milk and AFTERPAY T FPO. The Motley Fool Australia has recommended Freedom Foods 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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Are ASX travel shares like Qantas Airways Limited (ASX: QAN) great value because of the coronavirus share market selloff?

Plenty of other ASX travel shares have seen dramatic declines like Webjet Limited (ASX: WEB), Corporate Travel Management Ltd (ASX: CTD) and Flight Centre Travel Group Ltd (ASX: FLT).

There’s a lot of conflicting thoughts about whether they’re buys or not. It can be clever to buy when there’s ‘blood in the streets’. But there’s a major reason why they’re trading so much lower. International travel has almost completely stopped. Domestic travel is also very limited right now.

However, remember that many of the ASX travel shares don’t need international travel to resume. Domestic travel in Australia (and domestic travel in other regions) is expected to resume much sooner. If Aussie travellers simply go to another state rather than another country, then Qantas, Webjet and so on can still get a lot of their volume back.

Has there been any news for ASX travel shares recently?

Yesterday we learned that the EU wants to lift travel restrictions so that there can be a tourist season this year. Austria and Germany are the latest countries to remove travel limits. On 15 June 2020 free movement of people within the EU should return. I think it’s a positive move. But of course this is going to be dependent on staying in control of the coronavirus. 

But today we also heard from the CEO of International Air Transport Association, Alexandre de Juniac, who said that normal international travel may not be back until 2023. I think that could be tough for ASX travel shares.

I’m not sure that every travel share is good value at the moment. There has been a big shift to business video calling during this period. I believe something like Corporate Travel may not see as quick of a recovery.

But if I were targeting ASX travel shares then I’d look at Webjet and Qantas first. I think domestic travel will return sooner rather than later, which will mean some earnings can recover and sentiment may return further for the share price. Don’t forget that the RBA interest rate is now very low, which boosts asset prices.

More reading

• 5 things to watch on the ASX 200 on Thursday
• ABS reveals overseas travel arrivals plummeted a massive 99% in April
• ASX stock of the day: This ASX airline share jumped 45% today on expansion speculation
• Regional Express soars 45% higher amid plans to take on Qantas and Virgin Australia
• The smartest ASX shares to buy if you have $2,000

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited and Webjet Ltd. The Motley Fool Australia has recommended Flight Centre Travel 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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On Wednesday I looked at how a $10,000 investment in the CSL Limited (ASX: CSL) IPO in 1994 would have fared. Spoiler alert, you’d be very wealthy now.

Today I thought I would turn my attention to fellow market darling, Afterpay Ltd (ASX: APT).

The buy now pay later provider hasn’t been listed on the Australian share market anywhere near as long as CSL, but it certainly has achieved a lot during this time.

For example, here’s me fawning over Afterpay in July 2016 when it was just starting to gain traction with a handful of retailers in Australia.

Fast-forward to its recent business update and Afterpay now has a total of 48,400 merchants on its platform. This comprises 38,600 merchants in the ANZ market, 9,100 in the U.S. market, and 600 in the UK.

In addition to this, there are now a whopping 8.4 million active customers transacting through its platform globally. A sizeable 4.4 million of these are in the U.S. market.

The Afterpay IPO.

Afterpay has been listed on the Australian share market for just a touch over four years. Its shares landed on the ASX boards on May 4 2016 for $1.00 per share. This gave it a market capitalisation of $125 million.

This means that a $10,000 investment in its IPO would have yielded you 10,000 shares.

And although the company has merged with Touchcorp since then, Afterpay shareholders were given one share in the new entity for every share they already owned. So this figure remains the same.

Today the payments company’s shares are changing hands for $43.46, which implies a market capitalisation of approximately $11.6 billion.

This means that those 10,000 shares now have a market value of $434,600. I think you’ll agree that this is a stunning return on investment in just four years.

And given its strong growth potential, I wouldn’t be in a hurry to cash in these shares just yet. Especially if Tencent Holdings opens the door to the Asia market for it in the future. Combined with its other expansion opportunities in North America and Europe, the future looks very bright for this star stock.

More reading

• 3 top ASX shares to buy now and hold for 10 years
• Is the Zip share price in the buy zone?
• If you invested $10,000 in the CSL IPO, this is how much you’d have now
• How to become a better investor in just 2 minutes
• 4 top ASX shares to invest $4,000 into immediately

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 CSL Ltd. The Motley Fool Australia owns shares of AFTERPAY T FPO. 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 founder of Appaloosa Management believes the U.S. stock market is one of the most overpriced he’s ever seen.

On Wednesday David Tepper told CNBC that it is the second-most overvalued stock market he’s ever seen, behind only 1999.

According to the report, the S&P 500 is currently trading with a forward price to earnings ratio of over 20, which is a level not seen since 2002.

While this is of course the U.S. market, it has consequences for the local share market.

Most days the S&P/ASX 200 Index (ASX: XJO) will follow the lead of U.S. markets. If it were to pullback by 20%, it is very unlikely that the ASX 200 would not be dragged lower with it.

“Pretty full”.

Mr Tepper said: “The market is pretty high and the Fed has put a lot of money in here. There’s been different misallocation of capital in the markets. Certainly you are seeing pockets of that now in the stock market. The market is by anybody’s standard pretty full.”

The hedge fund manager believes tech heavyweights Amazon, Facebook and Alphabet are potentially fully valued now.

“Just because Amazon is perfectly positioned doesn’t mean it’s not fully valued. Google or Facebook … they are advertising companies. …They are not rich but they may be fully valued,” he told CNBC.

In light of this, he has been conservative with his investments and currently holds only 10% to 15% long positions in equities.

Should you be concerned?

While I think that Tepper makes some fair points, I would argue that things are very different to 1999.

For a start, with rates close to zero, valuations are naturally higher than they would have been 20 years ago.

In addition to this, I suspect the market is expecting a swift recovery from this current crisis. So while it may look expensive on a forward 12-month basis, valuations look a little more reasonable the further out you go.

But that is of course if economies bounce back strongly. I’m optimistic that they will, but the next few months will be key.

More reading

• 5 things to watch on the ASX 200 on Thursday
• The latest ASX shares upgraded by brokers to “buy”
• How to use your superannuation to become a millionaire
• Top brokers name 3 ASX 200 shares to buy right now
• LNG spot price surge benefits ASX 200 shares

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. 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 and recommends Alphabet (C shares), Amazon, and Facebook and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool Australia has recommended Alphabet (C shares), Amazon, and Facebook. 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 Xero Limited (ASX: XRO) share price will be one to watch on Thursday after the release of its full year results.

How did Xero perform in FY 2020?

For the 12 months ending March 31, Xero delivered a 30% increase in operating revenue to NZ$718.2 million and a 29% lift in annualised monthly recurring revenue (AMRR) to NZ$820.6 million.

This was driven by a 2% increase in average revenue per user to NZ$29.93 and a 26% jump in subscribers to 2.285 million. Xero added 467,000 net subscribers during the 12 months, which was up 8% on FY 2019’s additions.

The company’s margins expanded once again thanks to the benefits of scale. Xero ended the period with a gross margin of 85.2%, up 1.6 percentage points year on year.

This ultimately led to Xero delivering a 52% increase in EBITDA to NZ$139.17 million. On the bottom line, the company recorded a profit after tax of NZ$3.34 million, compared to a loss of NZ$27.14 million a year earlier.

What were the drivers of its growth?

During the 12 months its Australia subscribers grew by 26% to reach 914,000. Management notes that it has continued to benefit from the opportunity represented by Single Touch Payroll.

In the UK its subscribers grew by 32% to 613,000. The strong subscriber additions of 150,000 were assisted in part by the Making Tax Digital initiative and Xero Tax now offering end-to-end integration with HMRC.

Over in New Zealand its subscribers grew by 12% to 392,000, with 41,000 subscribers joining in FY 2020.

North America subscribers grew by 24% during the 12 months to reach 241,000. Management notes that its subscriber growth is accelerating. It believes this is a strong indicator of the early progress from its renewed positioning in a key global market.

Finally, its Rest of World subscribers grew by 51% to 125,000. This maintained the momentum that this part of the business has reported in recent periods.

At the end of the period Xero’s total lifetime value of subscribers was up 27% to NZ$5.53 billion.

COVID-19 impact.

With Xero’s financial year ending on March 31, the company notes that the COVID-19 pandemic only had a modest impact on its operating and financial performance for the year.

However, it did result in some reduction in its AMRR progress during March and has continued doing so early in FY 2021. Management notes that it is a difficult time for many people in small business.

Xero’s CEO Steve Vamos commented: “Many of our customers and partners are having to adapt the way they operate, while investing enormous effort to survive at this difficult time. Helping them is our immediate priority.”

“While COVID-19 brings uncertainty, our long-term strategic ambitions are unchanged and we remain committed to our three strategic priorities: to drive cloud accounting around the world, grow the small business platform, and to continue to build for global scale and innovation. Now more than ever, small businesses are recognising the benefit of being able to use the cloud to run their businesses and manage their finances,” he added.

Management believes “it would be speculative for us to say anything more at this time on its potential impact on our expected performance for FY21.”

As a result, no guidance has been provided with today’s results release. Though, it has reiterated that its “ambition is to be a long-term oriented, high-growth business.”

More reading

• 5 things to watch on the ASX 200 on Thursday
• Why high yield dividend shares can be detrimental to your wealth
• 3 must-read investing books for new investors
• These were the top 10 ASX 200 shares over the last year
• Buy these 4 ASX shares to survive the pandemic

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Xero. 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 Zip Co Ltd (ASX: Z1P) share price has been on a rollercoaster ride in 2020. The buy now, pay later (BNPL) provider’s shares are down 4.52% to $3.38 per share. However, that doesn’t tell the full story.

Zip shares plummeted to a new 52-week low of just $1.05 per share on 19 March. Investors were spooked by the potential impact of COVID-19 on discretionary spending levels here in Australia.

Many of Zip’s sales come from discretionary spending, whether that be in retail, travel, electronics or a number of others. However, the Zip share price has been surging back to life and is up 221.90% from its 52-week low. That means a $10,000 investment in Zip could be worth as much as $32,190 in less than 2 months.

So, is it a good time to invest in Zip, or have you missed the boat on the Afterpay Ltd (ASX: APT) competitor?

Is the Zip share price in the buy zone?

Zip shares have had quite the resurgence in April and May. A strong quarterly update followed by a solid April trading update have been key to the strong share price rebound. In fact, the BNPL sector has been doing well with consumers continuing to spend and Afterpay shares also rocketing higher.

Zip offers point-of-sale credit and digital payment services to consumers and merchants. The group counts big names like Amazon, Chemist Warehouse, Bunnings and Big W amongst its key clients. Customers were still spending big and using Zip’s services despite COVID-19 concerns. Times are tough, but many Aussies are still looking to fix up their homes or enjoy some retail therapy amid the economic shutdown.

That spending underpinned the Zip share price growth in April and May. In fact, Zip reported an 81% year on year increase in monthly revenue in April to $15.1 million. On top of that, Zip added some 70,000 customers during April, taking total customer numbers to 2 million, a 66% increase year-on-year. Merchant numbers increased to 23,100, a 50% increase from April FY19.

Foolish takeaway

The Zip share price has been rebounding strongly despite market panic in February. I think the recent trading updates show that there is still growth potential in the years ahead. We could be looking back at $3.38 per share as an absolute bargain price for Zip shares in no time…

More reading

• Top brokers name 3 ASX 200 shares to buy right now
• Why Afterpay, Flight Centre, Mesoblast, & Sezzle shares are dropping lower
• Safe dividend stocks to buy today for the COVID-19 world
• Short sellers are going after Afterpay’s rivals and these ASX shares
• 3 top-notch ASX shares on my May watchlist

Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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If you’re looking for dividends in 2020, you’ll have to look a little harder than normal. The pandemic has led to many dividend favourites deferring or cancelling their payments in FY 2020.

But not all companies have been affected by the pandemic. Some have continued their growth unabated and will be paying dividends as normal this year.

Income investors can still earn a decent income with the dividend shares listed below:

Coles Group Ltd (ASX: COL)

This supermarket operator’s defensive qualities have been on display for all to see in 2020. I believe this demonstrates why it would be a quality long term option for income investors to consider buying right now. In addition to this, its long term earnings and dividend outlook is very positive. This is due to its long track record of same store sales growth and focus on cost cutting. The latter will see Coles aim to deliver $1 billion in cumulative savings by FY 2023. I estimate that its shares currently offer a forward fully franked 4.25% dividend yield. 

Dicker Data Ltd (ASX: DDR)

Another dividend share to consider buying is Dicker Data. It has also been performing strongly in 2020 despite the crisis. Last month the wholesale distributor of computer hardware and software revealed that its first quarter profits grew 36.3% on the prior corresponding period to $18.4 million. It also advised that it intends to increase its dividend by 31% to 35.5 cents per share in FY 2020. This represents a 4.9% fully franked dividend yield.

Rural Funds Group (ASX: RFF)

Another option for income investors to consider is Rural Funds. It is an agriculture-focused property group with a diverse portfolio of assets across a number of industries. Given its long-term tenancy agreements and periodic rent increases, it has good visibility on its future earnings. Last month Rural Funds reaffirmed its guidance for both FY 2020 and FY 2021. It expects to pay a distribution of 10.85 cents per share in FY 2020 and then 11.28 cents per share in FY 2021. This equates to yields of 5.7% and 5.9%, respectively.

More reading

• With Aussie wages set to fall, could ASX 200 shares follow?
• 3 blue chip ASX dividend shares to buy right now
• Why high yield dividend shares can be detrimental to your wealth
• 3 ASX dividend kings to buy and hold forever
• UBS picks the real ASX winners from the COVID-19 grocery boom

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

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