Stock Pick

  • These are the latest ASX shares to be upgraded by brokers to buy

    finger pressing red button on keyboard labelled Buy

    The S&P/ASX 200 Index (Index:^AXJO) may have jumped by more than 20% since hitting the bear market low in March, but there are still value buys to be had.

    Speculation that the federal government has another $60 billion to use as stimulus due to its forecasting bungle is triggering excitement.

    It was originally thought that the Morrison government’s JobKeeper program would cost $130 billion proved to be well off the mark – but in a good way.

    The extra support for our economy could keep our market well supported as we head into the new financial year, and it isn’t too late to buy these ASX shares as brokers have only just upgraded them to “buy”.

    Good connection

    The latest stock to be upgraded by Morgans is the TPG Telecom Ltd (ASX: TPM) share price as the broker mulled over its looming merger with Vodafone Australia.

    “On a stand-alone basis and in constant accounting terms, EBITDA [earnings before interest, tax, depreciation and amortisation] for both TPM and Vodafone is in decline,” said Morgans.

    “So, this merger is all about the economies of scale required to have a profitable and free cash generative #3 player.”

    Upside from synergies

    It’s worth noting that David Teoh, who will be the chairman of the merged entity, has a strong track record of achieving cost savings.

    “We see the largest area of cost saving as TPM using mobile to partially bypass the NBN,” added Morgans.

    “Without mobile, TPM would pay ~$1bn pa to the NBN, so the ability to bypass some of this using wireless technologies will likely save $150m pa in the medium term.”

    While the broker is forced to guess what the capex requirement is for the group, Morgans believes the new entity will be able to generate around $800 million a year in free cash flow.

    Morgans lifted its rating on the stock to “add” from “hold” with a price target of $9.14 a share.

    The stock to bank on

    Meanwhile, the National Australia Bank Ltd. (ASX: NAB) share price got a boost after Bell Potter upgraded the stock to “buy” from “hold”.

    The stock had been under pressure due to its larger exposure to small and medium business lending. Many of these businesses are expected to fold due to the COVID-19 shutdown.

    But despite the risks, the stock is now looking too cheap to ignore, according to Bell Potter.

    Risks are priced in

    “Looking past the COVID-19 noise, NAB exhibited good operational resilience in 1H20,” said the broker.

    “Business and Private Banking cash earnings were stable due to solid lending volumes, steady NIM [net interest margin], cost discipline, better impairment outcomes and higher asset productivity.”

    Bell Potter was also impressed with management’s cost discipline as underlying expenses were flat at $4.1 billion with NAB forecasting around $1 billion in extra savings by the end of this financial year.

    Bell Potter lifted its price target on the stock to $17.30 from $17 a share.

    One “All In” ASX Buy Alert, that could be one of our greatest discoveries

    Investing expert Scott Phillips has just named what he believes is the #1 Top “Buy Alert” after stumbling upon a little-owned opportunity he believes could be one of the greatest discoveries of his 25 years as a professional investor.

    This under-the-radar ASX recommendation is virtually unknown among individual investors, and no wonder.

    What it offers is an utterly unique strategy to position yourself to potentially profit alongside some of the world’s biggest and most powerful tech companies.

    Potential returns of 1X, 2X and even 3X are all in play. Best of all, you could hold onto this little-known equity for DECADES to come.

    Simply click here to see how you can find out the name of this ‘all in’ buy alert… before the next stock market rally.

    Find out the name of Scott’s ‘All in’ Buy Alert

    More reading

    Motley Fool contributor Brendon Lau owns shares of National Australia Bank Limited and TPG Telecom 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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  • Alibaba Drops After Projecting Slowing Growth in Uncertain Times

    Alibaba Drops After Projecting Slowing Growth in Uncertain Times(Bloomberg) — Alibaba Group Holding Ltd. slid after projecting revenue growth will slow this year, reflecting post-Covid 19 economic uncertainty at home as well as the potential for U.S.-Chinese tensions to disrupt its business.Its stock slid as much as 4% in Hong Kong Monday, after a drop of almost 6% in New York before the weekend. The e-commerce giant forecast sales growth this year of at least 27.5% to more than 650 billion yuan ($91 billion), down from 35% previously and slightly below analysts’ estimates. While it posted a better-than-expected 22% rise in March quarter revenue of 114.3 billion yuan, that marked its slowest pace of expansion on record.Online shopping began to bounce back from March, executives said Friday. But the tepid outlook demonstrates the world’s second-largest economy has yet to fully shake off Covid-19, with consumers still hesitant about spending on big-ticket items. Asia’s most valuable corporation is tackling also the rise of rivals such as ByteDance Ltd. and Pinduoduo Inc. And the Tmall operator is going head-to-head with Tencent Holdings Ltd. for internet leadership in everything from online media to payments and cloud computing. JD.com Inc., the No. 2 Chinese online retailer, forecast better-than-expected revenue this quarter.“The market is a bit disappointed despite the strength given 2Q guidance of 20-30% YoY growth for JD and 99% GMV growth in 1Q20 for PDD,” CICC analyst Natalie Wu wrote. “We regard Alibaba’s advantage as a market leader as intact and unchanged in the longer run, though it may take several quarters for market sentiment to swing back.”Read more: Alibaba Sales Growth Plumbs New Lows While Uncertainty EscalatesAlibaba has lost more than $70 billion of market value since the coronavirus first erupted in January, and now has to grapple with not just an uncertain global economic environment but also any potential fallout from U.S.-Chinese financial tensions. On Friday, executives sought to assuage concerns about a U.S. bill that mandates much closer accounting scrutiny of U.S.-listed Chinese companies and may bar them from American bourses.Chief Financial Officer Maggie Wu said Friday Alibaba’s financial statements have been consistently prepared in accordance with U.S. GAAP accounting measures and were beyond reproach. “The integrity of Alibaba’s financial statements speak for itself, we have been an SEC filer since 2014 and hold ourselves to the highest standard,” she told analysts on a conference call. “We will endeavor to comply with any legislation whose aim is to protect and bring transparency to investors who buy securities on U.S. stock exchanges.”The bigger short-term challenge is in reviving growth: Alibaba’s bread-and-butter customer management or marketing business grew just 3% in the March quarter. Much of that stems from weaker consumer sentiment during the coronavirus-stricken quarter, when total Chinese e-commerce rose just 5.9% or at less than a third of 2019’s pace, according to government data. Jefferies analysts led by Thomas Chong wrote that Alibaba’s guidance was in fact a positive when viewed against an array of uncertainties gripping the post-Covid 19 global economic environment.What Bloomberg Intelligence SaysUser engagement and transaction volume have rebounded in April and May to precrisis levels, which bodes well for normalized sales growth ahead, especially as merchant-support measures are gradually rolled back.\- Vey-Sern Ling and Tiffany Tam, analystsClick here for the research.Rival PDD posted a revenue rise of 44% on Friday, down sharply from 91% in the previous quarter but ahead of expectations. Its sales and marketing expenses jumped 49%. PDD’s shares climbed 15% Friday.Alibaba’s March-quarter net income was 3.2 billion yuan, down 88% from a year ago when it booked an 18.7 billion yuan one-time gain on investments. In February, Alibaba declared a waiver of some service fees for merchants struggling financially during the outbreak on its main direct-to-consumer Tmall platform. In April, the company rolled out a new 10-billion-yuan subsidy program for Tmall users to buy electronics, encroaching on JD.com’s traditional turf. These initiatives may further compress margins for the June quarter.“The challenging part is for them to achieve the same amount of growth this year,” said Steven Zhu, a Shanghai-based analyst with Pacific Epoch. “Just because they are too big, for the same amount of growth, they need to spend much more effort.”But executives were confident in a gradual e-commerce recovery over the year. Beyond its main business, younger divisions such as its cloud computing arm should buoy the bottom line. That division’s revenue jumped 58% in the quarter.“Despite a challenging quarter due to reduced economic activities in light of the COVID-19 pandemic in China, we achieved our annual revenue guidance,” Wu said in a statement. “Although the pandemic negatively impacted most of our domestic core commerce businesses starting in late January, we have seen a steady recovery since March.”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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  • Bayer Reaches Deals on Big Share of 125,000 Roundup Weedkiller Suits

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  • 3 stellar ASX tech shares to buy and hold for decades

    The ANZ region may only have a small tech sector in comparison to the United States, Europe, and China, but it is home to a good number of quality companies which I believe are worthy of a spot in most portfolios.

    Three of my favourites are listed below. Here’s why I like them:

    Altium Limited (ASX: ALU)

    Altium is easily one of my favourite tech shares on the Australian share market. It is a software-as-a-service company that provides an award-winning printed circuit board (PCB) design platform. PCBs are the small boards you find in almost all electronic devices. Given the proliferation of electronics, demand for its software has been growing at a very strong rate in recent years. The good news is that management doesn’t expect this demand to ease any time soon. In FY 2020 it expects to have 50,000 software subscriptions. It is then targeting market domination and 100,000 subscriptions by FY 2025. Given the quality of its software and its leadership position in the industry, I believe Altium will achieve its goals.

    Bigtincan Holdings Ltd (ASX: BTH)

    Another tech share to consider buying is Bigtincan. It is a provider of enterprise mobility software that enables sales and service organisations to increase sales win rates. It has a number of blue chip clients using its software, which I believe is a testament to its quality. One of these is Australia and New Zealand Banking Group (ASX: ANZ). The banking giant has been able to streamline its processes for capturing client information through the use of tablets and a custom Bigtincan build. Bigtincan revealed that this cutting-edge approach to optimising its frontline workers’ processes has helped the bank differentiate itself and increase customer satisfaction. With demand growing strongly, Bigtincan is expecting another strong result in FY 2020. It expects to deliver a 30% to 40% increase in organic revenue growth despite the pandemic.

    Xero Limited (ASX: XRO)

    A final tech share to consider buying is this cloud-based business and accounting software provider. It has been growing at an explosive rate over the last few years thanks to the rapid adoption of its software by small businesses across the globe. The good news is that management estimates that less than 20% of the global English-speaking target market is using cloud-based accounting software at present. Given the overwhelming benefits of cloud-based software over alternatives like an Excel spreadsheet, I believe more and more businesses will make the switch in the coming years. This should provide Xero with a significant runway for growth over the next decade.

    And here is a fourth option for growth investors that you might regret missing out on…

    One “All In” ASX Buy Alert, that could be one of our greatest discoveries

    Investing expert Scott Phillips has just named what he believes is the #1 Top “Buy Alert” after stumbling upon a little-owned opportunity he believes could be one of the greatest discoveries of his 25 years as a professional investor.

    This under-the-radar ASX recommendation is virtually unknown among individual investors, and no wonder.

    What it offers is an utterly unique strategy to position yourself to potentially profit alongside some of the world’s biggest and most powerful tech companies.

    Potential returns of 1X, 2X and even 3X are all in play. Best of all, you could hold onto this little-known equity for DECADES to come.

    Simply click here to see how you can find out the name of this ‘all in’ buy alert… before the next stock market rally.

    Find out the name of Scott’s ‘All in’ Buy Alert

    More reading

    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 Xero. The Motley Fool Australia owns shares of and has recommended BIGTINCAN FPO. The Motley Fool Australia owns shares of Altium. 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 stellar ASX tech shares to buy and hold for decades appeared first on Motley Fool Australia.

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  • India Allows Airlines to Resume Domestic Flights Amid Virus Outbreak

    India Allows Airlines to Resume Domestic Flights Amid Virus OutbreakMay.25 — D. Sudhakar Reddy, founder and president of Air Passengers Association of India, talks about the government’s decision to resume domestic flights from May 25 amid the coronavirus outbreak. The contagion is escalating in the South Asian nation of 1.3 billion people, with more than 138,000 infections and over 4,000 fatalities, according to data from John Hopkins University as of Monday morning. Reddy speaks with Haslinda Amin and Yvonne Man on “Bloomberg Markets: Asia.”

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  • Boeing Cuts 25% Of Its Workforce At Winnipeg Site; Top Analyst Slashes PT To $155

    Boeing Cuts 25% Of Its Workforce At Winnipeg Site; Top Analyst Slashes PT To $155Boeing Co (BA) will lay off 400 employees at its aerospace manufacturing facility in Winnipeg as a result of the economic impact of the coronavirus pandemic."Due to the impact of the COVID-19 pandemic, Boeing previously announced we would adjust the size of our company to reflect new market realities through a combination of voluntary layoffs, natural turnover and involuntary layoffs," Boeing spokeswoman Jessica Kowal said in a statement.Boeing Winnipeg, which employs 1,600 workers is one of the largest aerospace composite manufacturers in Canada. At the site, Boeing produces over 500 end item composite parts for the company’s commercial airplanes. Major products include wing to body fairings, engine strut forward fairings, landing gear doors, and the engine inlet inner barrel of the new 737 MAX. In addition, Boeing Winnipeg designs and manufactures many parts for the 787 Dreamliner.Earlier this month, Boeing reported that it did not receive a single order in April, while it was also grappling with 108 order cancelations for its grounded 737 MAX plane. Commercial airline travel has fallen off a cliff due to coronavirus-induced lockdown restrictions forcing many airlines around the world to ground the majority of their fleets, suspend aircraft deliveries, and streamline operations.Shares in Boeing dropped another 1.1% to $137.53 on Friday taking this year’s slide to 59%.Despite the steep plunge this year, five-star analyst Kenneth Herbert at Canaccord Genuity still sees limited upside potential in the stock. The analyst last week sharply cut Boeing’s price target to $155 from $175, and maintained a Hold rating, saying that the outlook is now very depressed with expectations of more negative news flow.“While BA has come back from the financial cliff, we see limited opportunity for capital allocation to be a catalyst for the stock, and we believe Boeing now has little flexibility to pursue new aircraft programs if necessary,” Herbert wrote in a note to investors. “We are still cautious on Boeing until we get better visibility on the pace of improvement in air travel and when airlines will start to order aircraft again.”Turning now to the rest of the Wall Street, TipRanks data shows that overall analysts are cautiously optimistic on Boeing shares. The Moderate Buy consensus is based on 7 Buy ratings, 11 Hold ratings and 1 Sell rating. The $162.11 average price target implies 18% upside potential in the stock in the next 12 months. (See Boeing’s stock analysis on TipRanks).Related News: Ryanair Cuts Traffic Target By Almost 50% For Coming Year, Seeks To Reduce Boeing Plane Deliveries Boeing Gets No Orders in April, Customers Cancel 737 MAX Jets Colombian Carrier Avianca Files for Bankruptcy Protection Due to Coronavirus Woes More recent articles from Smarter Analyst: * Facebook-Backed Reliance Launches Powerful Online Grocery Service In India * European Launch of Kylie Skin Boosts Coty Stock by 15% * AngloGold Halts Production At World’s Deepest Gold Mine, Due To Covid-19 Outbreak * IBM Is Said To Make Far-Reaching Job Cuts Across The U.S.

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  • Here’s why these 3 ASX dividend shares are top income choices today

    Invest

    Finding top dividend-paying ASX shares is a hard ask these days. We’ve already seen dozens of ‘blue chips’ cut, defer or cancel dividend payments in 2020, including Transurban Group (ASX: TCL), Westpac Banking Corp (ASX: WBC) and Sydney Airport Holdings Pty Ltd (ASX: SYD).

    I’m sure we’ll see a lot more by the end of the year, too.

    So with this in mind, here are 3 ASX dividend shares that I think will make excellent choices for income in 2020.

    Australia Foundation Investment Co Ltd (ASX: AFI)

    AFIC is a listed investment company (LIC) that has been around since the 1920s. Since then, it has developed a reputation for conservative, broad-based investing with a focus on delivering fully franked dividends.

    I think AFIC is well positioned to continue this tradition in 2020. Management has rotated away from ASX bank shares in recent months, with only Commonwealth Bank of Australia (ASX: CBA) appearing in the company’s top 5 holdings. Replacing them are shares like CSL Limited (ASX: CSL) and BHP Group Ltd (ASX: BHP)

    On current prices, AFI shares are offering a trailing dividend yield of 4.16%, or 5.94% grossed-up.

    Coles Group Ltd (ASX: COL)

    Coles is another ASX blue chip that I expect to deliver strong dividend payments in 2020 and beyond. We all saw the rush on Coles and other supermarkets in the early stages of the coronavirus pandemic.

    This ended up leading to a 12% sales bump for Coles in the quarter ending 31 March 2020. Coles has a dividend payout policy of 80–90% of earnings, so these sales should somewhat underpin its dividend payments for the rest of the year.

    On current prices, Coles shares are offering a trailing dividend yield of 2.75%, or 3.93% grossed-up.

    Vanguard Australian Shares High Yield ETF (ASX: VHY)

    This exchange-traded fund (ETF) is designed to maximise exposure to the ASX’s best dividend-paying shares. As such, it holds a basket of 62 shares that service this goal.

    Much like AFIC, VHY’s portfolio has recently adapted to 2020 conditions by transitioning away from the ASX banks into more reliable dividend shares. I think this flexibility is a great asset during these uncertain times, and I like that management has been agile in this respect. Its top holdings now include BHP and Wesfarmers Ltd (ASX: WES).

    The trailing dividend yields from ETFs can be a little more unreliable than individual ASX shares, but VHY brings it in at 6.7% for the trailing 12 months. Vanguard estimates VHY’s forward yield at 5.6% or 7.7% grossed-up.

    For another top ASX dividend share for 2020, take a look at the report below!

    NEW: Expert names top dividend stock for 2020 (free report)

    When our resident dividend expert Edward Vesely has a stock tip, it can pay to listen. After all, he’s the investing genius that runs Motley Fool Dividend Investor, the newsletter service that has picked huge winners like Dicker Data (+92%), SDI Limited (+53%) and National Storage (+35%).*

    Edward has just named what he believes is the number one ASX dividend stock to buy for 2020.

    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.

    The name of this dividend dynamo and the full investment case is revealed in this brand new free report.

    But you will have to hurry — history has shown it can pay dividends to get in early to some of Edward’s stock picks, and this dividend stock is already on the move.

    See the top dividend stock for 2020

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    Sebastian Bowen owns shares of Vanguard Australian Shares High Yield Etf. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia owns shares of COLESGROUP DEF SET, Transurban Group, and Wesfarmers 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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  • High yield dividend shares could be the answer for income

    Dollar signs arrows pointing higher

    I think that high yield dividend shares could be the answer for income during these times.

    The problem for some investors is that solid dividend shares like APA Group (ASX: APA) have seen the yield compressed as the share price rises.

    Dividend shares with high yields may be able to boost your portfolio’s overall yield enough to get through this period.

    Here are three ideas:

    WAM Leaders Ltd (ASX:WLE)

    This is a listed investment company (LIC) which invests in the larger businesses on the ASX.

    It’s not necessarily a longer-term investor, so it may not matter that many of the biggest shares are cutting their dividends due to the coronavirus. WAM Leaders can make money from just the capital gain profits.

    It can then turn those capital gains into a growing dividend for shareholders. It’s run admirably by lead portfolio manager Matthew Haupt.

    WAM Leaders qualifies as a high yield dividend share because it has a grossed-up dividend yield of 8.8%.

    WAM Research Limited (ASX: WAX)

    This is another LIC operated by the investment team at Wilson Asset Management. This one is looking for small and medium growth shares on the ASX.

    Again, most of the profits generated will come from capital growth rather than dividends from its owned shares.

    Prior to the coronavirus sell-off, it was one of the best-performing LICs out there over the long-term. I think it could be one of the best again in the 2020s. 

    I can’t think of many high yield dividend shares that would have paid out as much as WAM Research over the past decade. It started with a high yield and it has increased the dividend every year since the GFC.

    WAM Research qualifies as a high yield dividend share because it has a grossed-up dividend yield of 10.4%.

    Challenger Ltd (ASX: CGF)

    Challenger is the Australian market leader of annuities. If someone takes out an annuity in Australia it’s likely to be a Challenger one, or at least a white label Challenger product.

    The ageing demographics are on Australia’s side as more people are heading towards retirement over the next couple of decades.

    Challenger is a high yield dividend share. But remember that a dividend is not an annuity, it’s not guaranteed. But Challenger did maintain its dividend during the GFC and with its normalised profit seemingly stable, Challenger may be able to keep paying its grossed-up dividend of 10.5%.

    Foolish takeaway

    All three of these shares have high dividend yields and could really boost your income. The low interest rate is probably problematic for Challenger for the longer-term, so with that in mind I’d probably go for WAM Research at this stage for its large dividend yield, the focus on growth and good portfolio diversification.

    But it may not be the best dividend share to buy, instead that honour could fall to this top ASX income share:

    NEW: Expert names top dividend stock for 2020 (free report)

    When our resident dividend expert Edward Vesely has a stock tip, it can pay to listen. After all, he’s the investing genius that runs Motley Fool Dividend Investor, the newsletter service that has picked huge winners like Dicker Data (+92%), SDI Limited (+53%) and National Storage (+35%).*

    Edward has just named what he believes is the number one ASX dividend stock to buy for 2020.

    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.

    The name of this dividend dynamo and the full investment case is revealed in this brand new free report.

    But you will have to hurry — history has shown it can pay dividends to get in early to some of Edward’s stock picks, and this dividend stock is already on the move.

    See the top dividend stock for 2020

    More reading

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

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  • China’s ‘hermit’ investors fill doubled oil storage with crude bet

    China's 'hermit' investors fill doubled oil storage with crude betChinese financial investors betting on a rebound in oil prices are filling commercial storage tanks held by the Shanghai futures exchange just as fast as the exchange can find them. The flood of purchases has come from companies little-known to the oil industry which have been bidding up Shanghai futures, China’s only oil futures contract, since early April when global oil prices slumped as COVID-19 hammered demand. “We call them ‘hermit’ investors,” said a state oil official whose firm recently delivered cargoes into the contract.

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  • Gold Down Over Escalating U.S.-China Tensions

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