ASX mining shares – or ASX resources shares in general – are often overlooked by many ASX investors. It’s common to hear protestations like ‘they’re volatile’, or ‘they’re price takers’ when discussing the miners.

Now both of these statements are true (and we’ll go over why in a minute). But in my view, they don’t preclude these shares from making good investments as a part of a well-balanced portfolio.

What are the benefits of owning ASX mining shares?

A well-run ASX miner can bring many benefits to a well-balanced portfolio – most importantly, diversification.

Many commodity markets operate quite independently of the broader economy. How else can you explain the iron ore price today – trading at multi-year highs above US$100 a tonne? Or the gold price – not too far from all-time highs at prices above US$1,700 an ounce?

Most ASX companies are facing significant short-term headwinds as a result of the coronavirus pandemic. But this economic pain has yet to extend to the iron or gold mining sector. That’s partly why the Fortescue Metals Group Limited (ASX: FMG) reached a new all-time high just today, for example. Ditto with Evolution Mining Ltd (ASX: EVN).

Large iron miners like Fortescue will probably spend 2020 dishing out record dividend payments to shareholders in a year where most companies are facing pressure to even keep their dividend steady.

As such, anyone with these kinds of shares in their portfolio (especially dividend investors) would be feeling incredibly grateful today.

What to watch out for in an ASX miner

As I touched on earlier, there are a couple of ‘Achilles heels’ that can make mining a treacherous field to plough.

Mining companies are price takers – meaning they have to accept the sale of their resources at whatever price the market is dictating at the time. This is why mining shares can be so volatile – they rise or die on the back of what the market is willing to pay for their products.

This gives them little control over their profits from year to year.

The best way to counter these inbuilt disadvantages in my view is to invest in the largest, most established miners with the lowest cost-bases.

Take Fortescue for instance. It mines its iron ore with a cost basis of around US$12–13 a tonne. That means it can keep its head above water if the iron price ever plunges – while its higher-cost competitors drown. And when prices are good? It can virtually print money for its shareholders.

Foolish takeaway

Mining shares can be highly volatile and also face structural disadvantages that don’t plague most other ASX shares. However, they can also provide invaluable diversification to a portfolio, and so I think any investor (dividend investors in particular) should consider at least some mining exposure.

More reading

• Forget cheap stocks. Why investors should watch ASX gold shares instead
• 5 winning ASX dividend shares to buy in June
• How our richest Australians are getting richer
• Why Austal, CSL, Fortescue, & Star shares are charging higher today
• Why these 3 ASX 200 blue chips could be set for growth this week

Motley Fool contributor Sebastian Bowen 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.

The post Why you might want to own ASX mining shares in 2020 appeared first on Motley Fool Australia.

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Is Pushpay Holdings Ltd (ASX: PPH) a millionaire maker share? It has already been a solid grower since it listed on the ASX a few years ago.

Indeed, since the market crash caused by the coronavirus pandemic, the Pushpay share price has rocketed 163% from that low.

Pushpay is a software business that facilitates electronic donations. It provides tools and a community app for its clients. It’s particularly focused on the large and medium US church sector – there is large amount of money donated each year in this area.

What was driving Pushpay before COVID-19?

The company was steadily winning over churches before the pandemic. It’s always a good idea for organisations to make it as easy as possible for people to donate (or pay). Electronic donations are rising in popularity, just like electric payments in general are.

You can see this growth from the increase of total processing volume by 39% to US$5 billion in FY20.

The company also recently acquired Church Community Builder for US$87.5 million that helps churches connect with their community members, record member service history, track online giving and perform a range of administrative functions. In April 2020 Pushpay and Church Community Builder launched a joint product. They can sell to each of the client bases, plus the combined offering will be more compelling for potential new clients.

Pushpay’s business model is attractive because of the growing operating leverage of the business. In FY20, the company’s revenue (excluding Church Community Builder) rose by 28% to US$123.1 million. The gross margin improved by five percentage points from 60% to 65%, excluding the acquisition it improved to 64%.

One of the main pleasing things is that the combined business is expecting further gross margin improvement. 

Total operating expenses only increased by 5%. Excluding the acquisition, operating expenses actually decreased by 8%.

It was the above factors that caused earnings before interest, tax, depreciation, amortisation and foreign currency (EBITDAF) to rise by US$23.5 million to US$25.1 million. It also helps that it’s now generating solid operating cashflow. 

Why it could be a millionaire maker share

I think Pushpay could be a great share to own because the current pandemic is causing many more people to donate electronically than they otherwise would have, bringing forward the shift to electronic giving.

Management expect the company to achieve EBITDAF of between US$48 million to US$52 million, which would be approximately doubling the operating profit. That would be a very strong result. 

Over the long-term, the business is targeting market share of over 50% of the medium and large church segments, which would be an opportunity of over US$1 billion of revenue. Obviously this would come with higher profit margins.

The US church segment is only one opportunity. There are plenty of other not-for-profit areas for Pushpay to grow over the long-term. I’d very happily buy shares for the long-term today.

More reading

• These 5 exciting small cap ASX tech shares rose by up to 70% in May
• Why Nearmap’s share price surged by 50% in May
• Top ASX Stock Picks for June 2020
• 10 top ASX growth shares to buy in June for strong returns
• How to make $1,000 a month in dividends

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended PUSHPAY FPO NZX. 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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Australian growth investors are a lucky bunch. Right now, there are a large number of companies on the ASX that are growing their earnings at a rapid rate.

Three which I believe can continue this trend for some time to come are listed below. Here’s why I think they are top options for growth investors:

a2 Milk Company Ltd (ASX: A2M)

The first ASX growth share to buy is a2 Milk Company. As I covered here last week, a2 Milk Company has been an exceptionally strong performer since its listing on the ASX in 2015. Over this time the company has gone from running loss-making operations to having an extremely profitable business. The catalyst for this has been the insatiable demand for its infant formula in China. The good news is that it still only has a modest market share in the lucrative market. In light of this, I believe it has a long runway for growth and further strong returns await investors over the coming years.

Kogan.com Ltd (ASX: KGN)

Another company which I believe has the potential to grow materially in the future is Kogan. It is benefiting greatly from the structural change that is happening in the retail industry and has been accelerated by the pandemic. I expect more and more retail spending to be made online over the next few decades, which bodes well for its increasingly popular website. In addition to this, the launch of Kogan Marketplace appears to have been a huge success and looks likely to underpin strong growth in the coming years.

Xero Limited (ASX: XRO)

A final ASX growth share to consider buying is Xero. It is a leading cloud-based business and accounting software provider. It has been growing its recurring revenues at a very strong rate over the last few years thanks to the increasing popularity of its platform with small businesses across the world. Xero now has ~2.3 million subscribers globally, which may seem like a large number, but is actually only a small portion of a massive global market opportunity. 

More reading

• I think these 2 ASX 200 shares will beat the market
• 3 top Warren Buffett quotes to start your week right
• Why a2 Milk, Freedom Foods, Scentre, & TPG Telecom are dropping lower
• Real wealth from 3 roaring mid caps in May
• Why these ASX retail shares surged over 25% in the past 2 weeks

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd. The Motley Fool Australia owns shares of A2 Milk and 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.

The post Buy these ASX growth shares for monster returns appeared first on Motley Fool Australia.

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Australia has a small but fast-growing ASX tech sector. Some of these listed companies have already made it to the S&P/ASX 200 Index (ASX: XJO).

Here we look at 3 of those companies, all of which I believe are good options to buy and hold for the long term.

WiseTech Global Ltd (ASX: WTC)

WiseTech Global is the leading global developer of software solutions to the logistics industry. The company has a strong and entrenched position in this market.

The WiseTech share price fell heavily from mid-February to mid-March by more than 60%. The company’s supply chains were significantly impacted during the early phase of the coronavirus crisis. As a result, the company downgraded its earnings projections for FY2020 back in February to between 5% and 22% year-over-year growth.  

Since then, the WiseTech share price has rallied strongly and regained about half of those losses. Global markets are now beginning to open up, especially the Chinese market. This should hopefully lead to further uplift in sales.

More challenges in the months ahead may lead to additional share price volatility for WiseTech. However, I believe that its long-term growth prospects remain strong, driven by the growing demand for logistics solutions.

Appen Ltd (ASX: APX)

Appen provides data for use in machine learning and artificial intelligence (AI) and is the global leader in this field.

In a market update last week, Appen commented that its earnings base continues to be resilient. This is in spite of challenging market conditions. So far, there has been negligible impact on its customer base, except for some smaller customers.

Appen further revealed that its balance sheet continues to be strong with cash in excess of $100 million. It will also continue to invest in technology areas that will help achieve its long-term growth trajectory.

I think that Appen remains well placed for strong growth over the next 5 years. This will be driven by the rapidly rising demand for AI products and machine learning solutions.

Altium Limited (ASX: ALU)

Altium designs software that enables engineers to manufacture printed circuit boards for a broad range of devices. This includes everything from computers to cars and the growing number of interconnected devices that make up the ‘internet of things’ (IoT).

Altium has recently experienced challenges to sales, especially at the smaller end of its target market. It recently noticed signs of distress amongst some start-ups and other smaller customers.

Despite these short-term challenges, I believe that Altium’s long-term future still remains bright. It has a strong balance sheet and has continued to grow its margins over the past few years.

In particular, IoT is a rapidly growing sector. This provides Altium with plenty of scope to grow strongly over the next 5 to 10 years.

More reading

• Why Woolworths shares are offering a rare buying opportunity today
• In your 50s? Here are the 2 best ASX 200 shares to buy now
• These ASX shares are set to get a big boost from the next big government stimulus
• These 5 ASX 200 shares were last week’s biggest winners
• 3 leading ASX 200 shares to buy for market-beating returns

Motley Fool contributor Phil Harpur owns shares of Altium, Appen Ltd, and WiseTech Global. The Motley Fool Australia owns shares of Altium, Appen Ltd, and WiseTech Global. 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 3 ASX 200 tech shares to buy and hold beyond 2025 appeared first on Motley Fool Australia.

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I think that WAM Global Limited (ASX: WGB) is a great share for those investors who are older than 50.  

If you’re in retirement, or getting closer to retirement, I think it becomes more important to have good diversification in your portfolio.

I also believe that most Aussie investors should have some exposure to shares that are listed overseas. The ASX only makes up 2% of the global share market.

Why WAM Global is a great share for investors older than 50

WAM Global is a listed investment company (LIC). That means the job of the investment team at Wilson Asset Management (WAM) is to invest in shares on your behalf.

Investors older than 50 may not have the time or desire to continually manage their investment portfolio. WAM Global can do the investing decisions for you.

As the name might suggest, this LIC invests in global shares.

What are some of the shares it owns right now? At the end of April 2020 it owned shares like Tencent, Amazon, Aon, Activision, CME Group, Costco, Doller General, Hasbro, Hello Fresh, Intuit, Logitech, Lowe’s, Microsoft and Nomad Foods. That’s a defensive group of names that’s suited to no matter what happens with the coronavirus.

What about the dividend?

LICs have the ability to turn capital gains made and investment income received into a smoothed dividend to investors older than 50 (and all other shareholders). WAM Global has been steadily growing its dividend since it started paying one. Keep in mind it only listed in June 2018.

It currently offers an annualised fully franked dividend of 6 cents per share. This amounts to a grossed-up dividend yield of 4.2%.

For investors older than 50 that’s not a huge yield. But it will probably keep growing over time. Just like the other WAM LICs have done.

Is it a good time to buy right now?

WAM Global’s share price has recovered strongly since 23 March 2020 – it’s up 47%. In March would have been the best time to buy. The share price discount to the net tangible asset (NTA) isn’t as big as it used to be. Australia’s dollar has continued to strengthen. 

At the end of April 2020 it had a pre-tax NTA of $2.25, so today’s share price is an 8.5% discount to the NTA last month. Many share prices have been rising throughout May 2020, so the discount could be somewhere in the mid-teens.

I think it’s a good price today to buy for the long-term for investors older than 50, though be aware there could be another market fall later this year.

More reading

• Top ASX Stock Picks for June 2020
• 2 ASX shares that are absurdly cheap right now
• How to build good wealth with small investments
• Do you have $3,000 to invest in these 3 top ASX dividend shares?
• How to build your first ASX share portfolio

Motley Fool contributor Tristan Harrison 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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I think there’s a rare buying opportunity for Woolworths Group Ltd (ASX: WOW) shares today.

Woolworths shares have had a fairly interesting ride lately.

Back in February, Woolworths shares made a fresh new all-time high of $43.96. Then the March share market crash hit and the shares went all the way down to $32.12. When it became apparent that Australians were stocking up on food, toilet paper, and other essentials in February and March, the Woolies share price rebounded back to the $40 level.

But since then, Woolworths shares have languished while the rest of the market has surged. For some context, since 23 March the S&P/ASX 200 Index (ASX: XJO) has risen close to 28%. Woolworths shares? A 3.66% drop.

Why are Woolworths shares stuck in the mud?

You would think that after Woolworths reported a record quarter (ending 31 March 2020) that investors would be scrambling to get a hold of this company’s shares. Especially those investors who were willing to pay nearly $45 for the same shares just a few months ago.

But investors know that the healthy bump Woolies got in February and March isn’t here to stay. According to the company, consumption patterns have more or less returned to normal. What hasn’t returned to normal though is Woolworths’ spending. The company has had to ramp up costs considerably as a result of the coronavirus pandemic. Safety screens, extra cleaning, enforcing social distancing at its stores, and additional staffing costs are all expensive and will probably be weighing the company’s balance sheet down for at least the next year, possibly longer.

It’s my view that investors are seeing these costs and as a result, aren’t in a rush for Woolworths shares.

Why the Woolworths share price might be a buy today

At current levels, I’m seeing a pricing opportunity for Woolworths shares. Why? Because the company is trading at no premium to its arch-rival Coles Group Ltd (ASX: COL). Being a larger, more diverse company with a higher market share of the Australia grocery industry, Woolworths has historically commanded a pricing premium to Coles.

But today, the shares are neck-and-neck. On current prices of $35.28 (at the time of writing), Woolworths shares are trading on a price-to-earnings (P/E) ratio of 17.48 and a trailing dividend yield of 2.93%.

If we look at the Coles share price at $15.48, we can see a P/E ratio of 17.08 and a trailing dividend yield of 2.77%.

So the companies are pretty much dead-even on a P/E basis and Woolworths actually comes out on top regarding dividend yield.

Foolish takeaway

I think dividend shares will continue to be in demand in 2020 as a result of record-low interest rates. And in my view, Woolworths is one of the most reliable ASX dividend shares on the ASX today.

As such, I think Woolworths is a decent buy today.

More reading

• 3 ASX 200 tech shares to buy and hold beyond 2025
• In your 50s? Here are the 2 best ASX 200 shares to buy now
• These ASX shares are set to get a big boost from the next big government stimulus
• These 5 ASX 200 shares were last week’s biggest winners
• 3 leading ASX 200 shares to buy for market-beating returns

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

The post Why Woolworths shares are offering a rare buying opportunity today appeared first on Motley Fool Australia.

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If you’re looking to add a few blue chip ASX shares to your portfolio this month, then the two listed below could be good options.

I believe these blue chip ASX shares have the potential to provide strong returns for investors over the next few years. Here’s why I would buy them in June:

CSL Limited (ASX: CSL)

The first ASX blue chip share to consider buying is this leading biotherapeutics company. Its shares were surprisingly out of form in May and are now trading around 17% lower than their 52-week high. I think this is a buying opportunity for investors that have been wanting to get a piece of the company.

And while there is a danger that the pandemic could have impacted its plasma collections during lockdowns, I believe higher unemployment will support collections once the crisis passes. Outside this, I believe its long term outlook remains very positive. This is thanks to the strong demand for immunoglobulin products, its growing Seqirus vaccine business, and its burgeoning research and development pipeline. All in all, I believe CSL is a blue chip to own for the long term.

Telstra Corporation Ltd (ASX: TLS)

I think Telstra is another great blue chip ASX share to own right now. After several years of struggles, the telco giant appears close to returning to growth once again. This is thanks to a combination of its T22 strategy, rational competiton, and the easing of the NBN headwind.

In fact, if it had not been for the NBN headwind, Telstra’s operating earnings would have been up on the prior corresponding period during the first half. In light of this and the current free cash flows it is generating, I believe its dividend cuts are over and 16 cents per share is the bottom. This equates to an attractive fully franked yield of almost 5%.

More reading

• In your 50s? Here are the 2 best ASX 200 shares to buy now
• 5 winning ASX dividend shares to buy in June
• Why Austal, CSL, Fortescue, & Star shares are charging higher today
• 5 ASX 200 winners and 3 losers from last week
• ASX 200 Weekly Wrap: Surging bank shares push ASX toward 6,000

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 and has recommended Telstra 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 Why I would buy these ASX 200 blue chip shares in June appeared first on Motley Fool Australia.

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S&P/ASX 200 Index (ASX: XJO) investors in their 50s are likely starting to think about retirement. The makeup of your investment portfolio is an important consideration. You may want to purchase more dividend-paying shares, as well as larger more stable businesses. Further, diversification is more important than ever to preserve capital.

Investors in their 50s

As investors we’re a motley crew. We all have motley goals, motley resources and motley risk appetite. Because of this, it is important to understand your own personal circumstances and invest accordingly. The below ASX stocks will be fantastic options for most investors in their 50s, but not for all. 

2 best ASX 200 shares to buy now

CSL Limited (ASX: CSL)

The largest company in the ASX 200 is a compounding machine! Over the last 20 years CSL has provided investors with a mega 20% annualised total return. The company’s performance has been even better in recent times, returning more than 25% per annum in total returns over 5 and 10 years.

After seeing the CSL share price fall more than 10% in May, I think now provides a nice entry point for new ASX 200 investors. Most of the drop can be attributed to profit taking and concerns over plasma collection issues resulting from COVID-19.

Despite its vast size, CSL should continue to grow well in the future. The stock price may not appreciate as fast as in the past, but I believe that CSL can provide robust market outperformance with less volatility.

Betashares Asia Technology Tigers ETF (ASX: ASIA)

Most people earn their income in Australia, have their savings in Australia and invest in Australia. Australia is the lucky country, but I think ASIA is a great option for ASX 200 investors in their 50s because of its diversification.

This ETF is a great way to diversify geographically into one of the fastest growing economies in the world. Not only that, it provides access to the technology sector, which is underweight in the ASX. 

It can often be hard to pick the winner in new technologies. Investment trends such as e-commerce and cloud computing have enormous addressable markets. Because of this, there is likely to be more than one winner in a region. As a market capitalisation weighted ETF, you gain more and more exposure to the businesses winning in these trends over time.

Some of the largest holdings include Alibaba Group and Tencent.

Foolish takeaway

Your 50s is a great time to start diversifying your portfolio and structuring it towards your income needs. Shares should make up part of a well balanced portfolio of multiple investment classes.

More reading

• 3 ASX 200 tech shares to buy and hold beyond 2025
• Why Woolworths shares are offering a rare buying opportunity today
• Why I would buy these ASX 200 blue chip shares in June
• These ASX shares are set to get a big boost from the next big government stimulus
• These 5 ASX 200 shares were last week’s biggest winners

Lloyd Prout owns shares in Betashares Asia Technology Tigers Ltd and expresses his own opinions. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia owns shares of and has recommended BetaShares Asia Technology Tigers ETF. 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 In your 50s? Here are the 2 best ASX 200 shares to buy now appeared first on Motley Fool Australia.

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