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These ASX healthcare shares could be long term market beaters

Due to the favourable tailwinds that it is experiencing, I believe the healthcare sector is a great place to invest with a long term view.
But with so many options for investors to choose from, which ones should you be buying?
Below are three ASX healthcare shares I think could provide stellar returns for investors over the long term:
Avita Medical Ltd (ASX: AVH)
The first healthcare share to look at is Avita Medical. It is a global regenerative medicine company which I think has a lot of potential. It is best known for its Recell system, which is a spray-on skin treatment used for burns victims. Demand for its offering has been growing very strongly over the last couple of years. This led to the company recently revealing an 84% increase in revenue for the 9 months ending 31 March 2020. While the company has a huge market opportunity already, it is seeking to extend Recell’s use to treat vitiligo. Combined, the company has a significant runway for growth over the next decade.
Pro Medicus Limited (ASX: PME)
Another ASX healthcare share to consider buying is Pro Medicus. It provides a full range of radiology IT software and services to hospitals, imaging centres, and healthcare groups. The key product in its portfolio is the increasingly popular Visage 7 Enterprise Imaging Platform. This platform delivers fast, multi-dimensional images streamed via an intelligent thin-client viewer. Demand for Visage 7 has been growing strongly in recent years and continues to this day. In fact, on Monday Pro Medicus announced a major new contract with one of the highest rated hospitals in the United States. I believe this is a testament to the quality of its offering. It also revealed that it has a number of other sales opportunities in its pipeline that it is working on.
Ramsay Health Care Limited (ASX: RHC)
A final healthcare share to look at is Ramsay Health Care. It is a global private hospital operator with 480 facilities across 11 countries. The next 12 months are not going to be easy for Ramsay due to both the pandemic and overall tough trading conditions in the private hospital space. However, I believe these headwinds will ease over the medium term and Ramsay’s growth will accelerate. Especially given how well-placed the company is to capture the expected increase in demand for healthcare services due to ageing populations.
And here are more top shares to consider. All five recommendations below look like future market beaters…
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One is a diversified conglomerate trading over 30% off it’s all-time high, all while offering a fully franked dividend yield of over 3%…
Another is a former stock market darling that is one of Australia’s most popular and iconic businesses. Trading at a significant discount to its 52-week high, not only does this stock offer massive upside potential, but it also trades on an attractive fully franked dividend yield of almost 4%.
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But you will have to hurry because the cheap share prices on offer today might not last for long.
As of 2/6/2020
More reading
- Why Austal, Evolution, Newcrest, & Pro Medicus are tumbling lower
- 2 cheap ASX 200 shares to buy right now
- Why Evolution, Iress, Pro Medicus, & Vicinity shares are dropping lower
- ASX 200 up 0.6%: NAB charges higher, ACCC investigates Qantas acquisition
- Why this exciting ASX 200 tech share is pushing higher on Monday
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 Pro Medicus Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Avita Medical Limited. The Motley Fool Australia has recommended Avita Medical Limited, Pro Medicus Ltd., and Ramsay Health Care 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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Top brokers name 3 ASX 200 shares to sell today

On Wednesday I looked at three ASX shares that brokers have given buy ratings to this week.
Unfortunately, not all shares are in favour with them right now. Three ASX 200 shares that have just been given sell ratings by brokers are listed below.
Here’s why these brokers are bearish on them:
Australia and New Zealand Banking GrpLtd (ASX: ANZ)
According to a note out of the Macquarie equities desk, its analysts have retained their underperform rating and $18.50 price target on this banking giant’s shares. Although the broker believes ANZ’s divestment of its New Zealand-based UDC Finance business was a positive, it isn’t enough for a change of rating. It continues with its bearish view of the bank and retains its underperform rating. The ANZ share price is trading at $19.10 this afternoon.
Cochlear Limited (ASX: COH)
Analysts at UBS have retained their sell rating but lifted the price target on this hearing solutions company’s shares to $160.50. According to the note, the broker has revised its earnings estimates higher to reflect its belief that Cochlear unit sales will recover a touch quicker than expected. Nevertheless, with its shares trading well ahead of its price target, the broker is holding firm with its sell rating for the time being. Cochlear’s shares are changing hands for $197.89 on Thursday.
Nufarm Limited (ASX: NUF)
Another note out of Macquarie reveals that its analysts have downgraded this agricultural chemical company’s shares to an underperform rating and cut the price target on them to $4.85. The broker was left underwhelmed by Nufarm’s recent trading update and has concerns over its prospects in the fourth quarter. Given the importance of this quarter to its overall result, this could mean a disappointing full year result in September. The Nufarm share price has fallen heavily today and is now trading at $4.79.
Those may be the shares to sell, but these are the shares that analysts have given buy ratings to…
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One is a diversified conglomerate trading over 30% off it’s all-time high, all while offering a fully franked dividend yield of over 3%…
Another is a former stock market darling that is one of Australia’s most popular and iconic businesses. Trading at a significant discount to its 52-week high, not only does this stock offer massive upside potential, but it also trades on an attractive fully franked dividend yield of almost 4%.
Plus, this free report highlights 3 more cheap bets that could position you to profit in 2020 and beyond.
Simply click here to scoop up your FREE copy and discover the names of all 5 cheap shares.
But you will have to hurry because the cheap share prices on offer today might not last for long.
As of 2/6/2020
More reading
- Should you be an ASX bull or bear right now?
- ASX 200 hits 6,000 points: Westpac provide AUSTRAC update, Vocus reaffirms guidance
- Why Austal, Ecofibre, Northern Star, & Nufarm are dropping lower
- Where to invest $2,000 in cheap shares
- Is the CBA share price cheap 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 Cochlear Ltd. The Motley Fool Australia has recommended Cochlear 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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ASX 200 hits 6,000 points: Westpac provide AUSTRAC update, Vocus reaffirms guidance

At lunch on Thursday the S&P/ASX 200 Index (ASX: XJO) is on course to record another strong gain. The benchmark index is currently up 1% to 6,000.9 points.
Here’s what has been happening:
ASX 200 hits 6,000 points.
The ASX 200 index has shaken off the recession news and stormed higher again on Thursday. So much so, the index has broken through the symbolic 6,000 points mark. This is the first time the ASX 200 has traded above this level in almost three months. The big four banks have played a key role in driving it through this level today. All four are trading higher at lunch.
Westpac AUSTRAC update.
The Westpac Banking Corp (ASX: WBC) share price is pushing higher today despite the release of an update on its Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) compliance issues. Australia’s oldest bank has been investigating its compliance issues and believes three primary factors led to the breaches. These include some areas of AML/CTF risk not being sufficiently understood within the bank.
Vocus reaffirms guidance.
The Vocus Group Ltd (ASX: VOC) share price is charging higher today after the release of a positive announcement. The specialist fibre and network solutions provider revealed that it has refinanced its debt and remains on course to achieve its guidance for FY 2020. Vocus expects its earnings before interest, tax, depreciation, and amortisation (EBITDA) to be in the range of $359 million to $369 million. This compares to the EBITDA of $360.1 million it posted in FY 2019. The core Vocus network services business is expected to deliver EBITDA growth of 10% this year.
Best and worst ASX 200 performers.
The best performer on the ASX 200 on Thursday has been the Unibail-Rodamco-Westfield (ASX: URW) share price with a 15% gain. Investors may believe the shopping centre operator’s shares have bottomed now. The worst performer has been the Nufarm Limited (ASX: NUF) share price with a decline of almost 11%. This morning analysts at Macquarie downgraded its shares to an underperform rating with a $4.85 price target.
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More reading
- Should you be an ASX bull or bear right now?
- Top brokers name 3 ASX 200 shares to sell today
- Why Corporate Travel Management, SKYCITY, Vocus, & Westpac are pushing higher
- Why Austal, Ecofibre, Northern Star, & Nufarm are dropping lower
- Where to invest $2,000 in cheap shares
Motley Fool contributor James Mickleboro 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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Buru Energy share price jumps 15% as the ASX small-cap benefits from firming oil prices

The Buru Energy Limited (ASX: BRU) share price is charging higher today after the small-cap ASX energy share provided an operations update. At the time of writing, Buru shares have rallied 15% to 11.5 cents per share, taking the company’s current market capitalisation to around $50 million.
Buru Energy is an oil and gas exploration and production company. It is focused on exploring and developing the petroleum resources of the Canning Basin in the Kimberley region of Western Australia. With this, the company holds interests in a portfolio of exploration permits covering around 5.5 million gross acres in the Canning Basin. It also has a 50% operating interest in the currently producing Ungani Oilfield.
What did Buru Energy announce?
This morning, Buru provided an operations update regarding Ungani oil sales and production. Notably, the company revealed it has been buoyed by the improving crude market, with increases in the Brent oil price during May resulting in additional revenue from the May lifting of around US$200,000.
The company also announced that the next lifting of Ungani crude from Wyndham Port, which is expected to be in mid-July, has been sold on a spot basis.
The Ungani joint venture plans to continue to sell crude on a spot basis while it reviews the potential for entering into another longer-term offtake agreement.
The received price of the July lifting will be based on the average dated Brent oil price for the month of July, less an agreed discount to reflect an increase in marine transport charges to a refinery in Asia.
Meanwhile, Ungani field production is currently 1,250 barrels of oil per day and a series of well optimisation activities have been planned.
Buru also noted that its current farm-out process is progressing well. Various parties have accessed the virtual data room and with COVID-19 restrictions easing, locally-based interested parties are now able to physically attend Buru’s office to access the geophysical database.
Commenting on today’s update, executive chair Eric Streitberg said:
“We are very pleased and relieved to see the firming oil price that gives us a healthier return from our oil sales. Although we are facing higher shipping charges and tightening refinery terms, there is still a good market for our particular high quality crude from Ungani.
Our strong cash position and our high quality exploration portfolio puts us in a good position to weather the current storms and it has also been very pleasing to see the share price improving. Although like many other companies our share price is still near historic lows, it is at least now reflecting a value greater than our cash position.”
If you’re after some larger-cap ASX share ideas that aren’t reliant on underlying commodity prices, be sure to check out the free report below.
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Another is a diversified conglomerate trading over 40% off its high, all while offering a fully franked dividend yield over 3%…
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See for yourself now. Simply click here or the link below to scoop up your FREE copy and discover all 5 shares. But you will want to hurry – this free report is available for a brief time only.
More reading
- Should you be an ASX bull or bear right now?
- Will the HomeBuilder stimulus boost ASX 200 building shares?
- These ASX healthcare shares could be long term market beaters
- Top brokers name 3 ASX 200 shares to sell today
- ASX 200 hits 6,000 points: Westpac provide AUSTRAC update, Vocus reaffirms guidance
Motley Fool contributor Cathryn Goh 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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Got $5,000 for a dividend yield over 10%?

Finding shares with a dividend yield over 10% requires looking in a few odd places and sometimes making a few sacrifices. Income investing requires a bit more initial capital and a bit more time.
The practice of dividend harvesting is still popular; where you buy high-yielding shares prior to the ex-dividend date and then sell them off again shortly afterwards. However, I personally have found that to be fraught with risks.
The truly great income investing opportunities were around 23 March when the market bottomed out. But there are still very good investments available if you look for them.
High-confidence dividend yield, short duration
Orora Ltd (ASX: ORA) goes ex-dividend on 19 June. At Wednesday’s closing price it would produce a special dividend payout of 13.6%. Moreover, the company also received a windfall from the sale of one of its businesses. This means it is going to distribute an additional payment to shareholders. At yesterday’s closing price this means a total payment of 18.1% to be paid on 29 June.
Orora has consistently grown its dividend by about 13.8% over the past 6 years. While this is a special dividend, the company’s current low share price increases the yield of future payments. The Orora share price is down by 12.9% YTD.
Out-of-favour shares
Yancoal Australia Ltd (ASX: YAL) is one of those shares that some people may well refuse to own. Despite this, it is a very well run company and has positioned itself for further production growth. It currently trades at a very low price-to-earnings ratio of 3.95. Its present twelve-month trailing dividend is 14.68%. Which is an almighty yield from a company worth $2.8 billion.
The company has only been paying dividends for the past 2 years. However, its policy statement reads “…Yancoal will target a dividend payout of (A) 50% of net profit after tax (pre-Abnormal Items); or (B) 50% of the free cash flow (pre-Abnormal Items), whichever is higher.”
Foolish takeaway
Presuming you split $5,000 evenly between these two options, and that the Yancoal dividend remained the same or higher, the return would be at least $818 (16.4%) a year from now.
Finding reliable high-yielding dividends can be very tricky. Make sure to download our free expert report before you go.
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This fully franked “under the radar” company is currently trading more than 24% below its all-time high and paying a 6.7% grossed-up dividend.
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More reading
- 3 cheap ASX manufacturing shares for the supply chain boom
- Top ASX Stock Picks for June 2020
- Buy this ASX 200 share now for an 18% dividend yield in a month
- Has China banned Australian coal?
- Top ASX Dividend Stock Picks for May 2020
Motley Fool contributor Daryl Mather 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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Have $10,000? This is where Iād invest it into ASX shares

Do you have $10,000? I think ASX shares are the perfect place to invest it.
I believe ASX shares are a great way to grow your wealth with minimal effort. But in this coronavirus era we need to be careful. I’d only want to buy shares with good prospects that will be fine if there’s a worse-than-expected downturn.
Here are long-term ASX shares I’d go for:
Bubs Australia Ltd (ASX: BUB) – $2,000
Bubs is an exciting infant formula business which specialises in goat milk products. Just like previously successful infant formula businesses, Bubs is growing revenue strongly in Asia. Both China and Vietnam are generating good growth right now for Bubs.
The ASX share is steadily adding new products, including an organic grass-fed cow infant formula product which may also prove to be popular.
Growth is accelerating due to the coronavirus and Bubs generated a positive operating cashflow in the last quarter. It’s in a strong position.
MFF Capital Investments Ltd (ASX: MFF) – $3,500
MFF Capital is a listed investment company (LIC). It’s run by the high-performing Chris Mackay who has recently moved almost half of the portfolio to cash. So at the moment MFF Capital is a good hedge against another US share market fall which could easily happen because of what’s going with the pandemic and riots.
ASX shares are great, but globally there are some fantastic businesses to be invested in like Visa and Mastercard. It’s these types of businesses that will benefit from the shift to online shopping.
Pushpay Holdings Ltd (ASX: PPH) – $3,000
Pushpay is an electronic donation business. At the moment its focus is facilitating donations from congregations at medium and large US churches.
There is a strong demand for digital giving right now due to the social distancing measures in the US. That’s partly why management are expecting earnings before interest, tax, depreciation, amortisation and foreign currency (EBITDAF) to approximately double in FY21.
Pushpay is one of my favourite ASX shares at the moment because of how much growth it could achieve over the long-term. It’s targeting a $1 billion revenue opportunity in the US church sector. There are other countries and other not-for-profit areas it can grow in.
Brickworks Limited (ASX: BKW) – $1,500
The Brickworks share price has climbed 23% since the middle of May, so I don’t think it’s as good value now as a few weeks ago. But I think it’s still compelling.
The value of its Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) shares continues to grow. Its 50% stake in the industrial property trust will be even more important because of the shift to ecommerce.
The ASX share could be a beneficiary from the government’s plan to encourage house building and large renovations, which would really help the Australian building products division. I think construction could recover quicker than some expect.
Foolish takeaway
I believe all four of these ASX shares have a good chance of beating the market over the next four years. I like the optionality that MFF Capital provides with its large cash balance, but Pushpay and Bubs could also grow into quite large businesses over time.
If I had another $5,000 to invest into shares I’d want to pick one of these top ASX stocks…
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One is a diversified conglomerate trading over 30% off it’s all-time high, all while offering a fully franked dividend yield of over 3%…
Another is a former stock market darling that is one of Australia’s most popular and iconic businesses. Trading at a significant discount to its 52-week high, not only does this stock offer massive upside potential, but it also trades on an attractive fully franked dividend yield of almost 4%.
Plus, this free report highlights 3 more cheap bets that could position you to profit in 2020 and beyond.
Simply click here to scoop up your FREE copy and discover the names of all 5 cheap shares.
But you will have to hurry because the cheap share prices on offer today might not last for long.
As of 2/6/2020
More reading
- Why it’s a good week to buy international shares
- Should your share portfolio actually be 50% cash right now?
- 3 Warren Buffett ASX dividend shares you can buy right now
- 3 of the best ASX shares to buy with $3,000 right now
- Why I’m not afraid to invest in shares during this recession
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Why Corporate Travel Management, SKYCITY, Vocus, & Westpac are pushing higher

The S&P/ASX 200 Index (ASX: XJO) looks set to continue its stellar run on Thursday. In late morning trade the benchmark index is up 1% to 6,003.1 points.
Four shares that are climbing more than most today are listed below. Here’s why they are pushing higher:
The Corporate Travel Management Ltd (ASX: CTD) share price is up 7% to $13.12. This is despite there being no news out of the corporate travel booker. This latest gain means that Corporate Travel Management’s shares are now up approximately 200% from their March low.
The SKYCITY Entertainment Group Limited (ASX: SKC) share price has jumped 7% to $2.77. Investors have been buying the casino and resorts operator’s shares since the release of an update on Wednesday. That update revealed that its New Zealand operations have performed well since reopening in the middle of May. Investors appear optimistic that the worst is now behind the company.
The Vocus Group Ltd (ASX: VOC) share price is up 3.5% to $3.23. This morning Vocus announced that it has refinanced its debt and reaffirmed its guidance for FY 2020. Vocus expects its earnings before interest, tax, depreciation, and amortisation (EBITDA) to be in the range of $359 million to $369 million. This compares to FY 2019’s EBITDA of $360.1 million. Its core Vocus network services business has been performing well. It is expecting the key segment to deliver EBITDA growth of 10% this year.
The Westpac Banking Corp (ASX: WBC) share price has continued its run and is up almost 2% to $18.26. Investors have been buying Westpac’s shares despite it releasing an update on its Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF ) compliance issues. Australian oldest bank blamed the compliance issues on three primary factors. This includes some areas of AML/CTF risk not being sufficiently understood within Westpac.
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One is a diversified conglomerate trading over 30% off it’s all-time high, all while offering a fully franked dividend yield of over 3%…
Another is a former stock market darling that is one of Australia’s most popular and iconic businesses. Trading at a significant discount to its 52-week high, not only does this stock offer massive upside potential, but it also trades on an attractive fully franked dividend yield of almost 4%.
Plus, this free report highlights 3 more cheap bets that could position you to profit in 2020 and beyond.
Simply click here to scoop up your FREE copy and discover the names of all 5 cheap shares.
But you will have to hurry because the cheap share prices on offer today might not last for long.
As of 2/6/2020
More reading
- Why this ASX 200 telco share is storming higher today
- Westpac share price on watch after AUSTRAC update
- ASX 200 jumps 1.8%, Australian headed for recession
- ASX 200 up 1%: Big four banks jump, Afterpay hits record high
- Is the Westpac share price a buy?
Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited. The Motley Fool Australia has recommended Sky City Entertainment Group 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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Why Austal, Ecofibre, Northern Star, & Nufarm are dropping lower

In late morning trade the S&P/ASX 200 Index (ASX: XJO) is on course to record another very strong gain. At the time of writing the benchmark index is up 1.3% to 6,018.3 points.
Four shares that have failed to follow the market higher today are listed below. Here’s why they are dropping lower:
The Austal Limited (ASX: ASB) share price is down over 3% to $3.37. The shipbuilder’s shares have come under pressure since it announced the retirement of its CEO on Wednesday. Austal has found its replacement already, though. Chief Operating Officer, Patrick Gregg, will take over from the retiring David Singleton on 1 January 2021. Until then, Mr Singleton will continue to work closely with his replacement to ensure there is a smooth handover.
The Ecofibre Ltd (ASX: EOF) share price has crashed 7% lower to $2.88. This morning the hemp products company advised that the protests in the United States are expected to impact near term sales in its core Ananda Health business. In light of this, Ecofibre has withdrawn its second half guidance.
The Northern Star Resources Ltd (ASX: NST) share price is down 7% to $13.27. Investors have been selling Northern Star and the rest of the gold miners on Wednesday after the price of the precious metal sank lower. Improving risk appetite is weighing heavily on the price of gold and other safe haven assets. At the time of writing the S&P/ASX All Ordinaries Gold index is down 3.8%.
The Nufarm Limited (ASX: NUF) share price has dropped almost 9% to $5.01. This appears to have been driven by a broker note out of Macquarie this morning. According to the note, the broker has downgraded Nufarm’s shares to an underperform rating with a $4.85 price target. Its analysts appear concerned over the company’s prospects in the important fourth quarter.
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Another is a former stock market darling that is one of Australia’s most popular and iconic businesses. Trading at a significant discount to its 52-week high, not only does this stock offer massive upside potential, but it also trades on an attractive fully franked dividend yield of almost 4%.
Plus, this free report highlights 3 more cheap bets that could position you to profit in 2020 and beyond.
Simply click here to scoop up your FREE copy and discover the names of all 5 cheap shares.
But you will have to hurry because the cheap share prices on offer today might not last for long.
As of 2/6/2020
More reading
- The latest ASX 200 stocks to be upgraded to “buy” amid the recession
- Why Austal, Evolution, Newcrest, & Pro Medicus are tumbling lower
- 3 cheap ASX manufacturing shares for the supply chain boom
- Forget cheap stocks. Why investors should watch ASX gold shares instead
- These 5 ASX 200 shares were last week’s biggest winners
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 Austal Limited. 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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Where to invest $2,000 in cheap shares

Don’t panic. The racing share market may have you wondering where to invest, but you haven’t missed it yet. There are still plenty of opportunities to buy great shares for income, growth or value. In fact, there are always opportunities.
If I had $2,000 spare today I would be looking squarely at dividing it between both growth and value opportunities. I believe many of today’s shares are still oversold and represent great value. Personally I would be looking to divide it 25% in growth and 75% in value shares.
Income investing requires a different focus and timeframe, in my experience.
Where to invest for growth
Of the available growth shares, I would be looking very hard at Zip Co Ltd (ASX: Z1P) even after the recent rise. Growth shares can be a risky business and it is difficult to know where to invest. Today, it’s easy to see that Amazon.com (NASDAQ: AMZN) was going to be a behemoth. It was a lot harder to see it clearly in 2010, though.
In fact, I thought it was overpriced!
At Tuesday’s close, Zip Co was valued at $2.4 billion. A massive leap in two days to be sure. But I believe the company still has a long way to go. Potentially further, even, than Afterpay Ltd (ASX: APT).
Zip has more financial products than Afterpay and a track record of making profits. The recent US acquisition gives it access to a $5 trillion retail market. It may be hard to see now, but in the future, I believe we will think today’s price was cheap.
Value investing
When considering where to invest for value, I have always looked for undervalued mature growth shares. The COVID-19 pandemic has created this opportunity for us.
I believe that Altium Limited (ASX: ALU) and Jumbo Interactive Ltd (ASX: JIN) are two really great examples of this.
Altium, the PCB design software producer, has returned investors over 130 times their initial investment since 2010. Its sales growth in the past two years has been better than the previous 7 years. I believe it is slightly undervalued in the market today.
Jumbo Interactive is one of the great shares on the S&P/ASX 200 (INDEXASX: XJO). It has returned 25 times the initial investment since 2010. Despite this, it had a greater leap in sales last year than in any previous years. In addition, it was forecasting another increase this FY before the coronavirus.
In average times, approximately 75% of lottery sales are via retail outlets. With these closed, but lottery continuing, it is likely they have picked up additional revenues via internet sales.
Foolish takeaway
The ASX is full of cheap value opportunities for people with limited funds who are wondering where to invest. You just need to spend some time looking for them.
For example, the five dirt-cheap shares recommended below could be the ones to buy right now.
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As of 2/6/2020
More reading
- Why the shares of Afterpay rival Openpay are up 840% since March
- Is the CBA share price cheap today?
- Meet the ASX stocks to benefit from the new $688m home stimulus
- Why Zip Co and these ASX shares just zoomed to new highs
- Should the Xero share price have a P/E ratio of 4,000?
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Daryl Mather 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 Amazon and Jumbo Interactive Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO, Altium, and ZIPCOLTD FPO 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 Amazon and Jumbo Interactive 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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