Investors should be more confident about buying the dips as our market has a tendency to recover from early losses.

Today was no exception with the S&P/ASX 200 Index (Index:^AXJO) clawing its way back to the black.

If you are looking for stocks to put on your watchlist, these three stocks are among the latest “buy” ideas from leading brokers.

Riding on a cloud

One stock worth considering is scrap metal company Sims Ltd (ASX: SMG), according to UBS.

The broker upgraded the stock to “buy” from “neutral” today even though the stock is impacted by the lack of earnings visibility and volatile scrape prices.

“However, at 0.8-0.9x NTA [net tangible asset] and with scrap markets expected to improve from here as the US economy reopens, the discount is too wide,” said UBS.

“In addition, SGM’s push into cloud recycling offers the opportunity for more stable volumes and growth as cloud IT refresh cycles fall.”

Cloud recycling is the recycling of computer servers and other IT equipment used in cloud computing. It’s related to e-recycling and Sim’s expansion into this space was triggered by the exit of a key competitor.

UBS’s price target on Sims is $10.20 a share.

Shining bright

Meanwhile, JP Morgan initiated coverage on Gold Road Resources Ltd (ASX: GOR) with an “overweight” recommendation as GOR potentially offers the best returns among gold miners under the broker’s coverage.

Gold Road’s 50% owned Gruyere project is the main reason for the broker’s enthusiasm as that is a large and long-life mine based in Western Australia.

“These are scarce and valuable qualities in this gold-focused, and negative real yield environment,” said JP Morgan.

“We see clear potential to add value to the current Gruyere operation by increasing production rates, extending mine life and finding more gold.”

The broker’s price target on the stock is $1.95 a share, which implies a 30% upside.

Positive trends

Finally, Macquarie Group Ltd (ASX: MQG) reiterated its “outperform” call on Domino’s Pizza Enterprises Ltd. (ASX: DMP) after the fast food chain’s trading update.

Domino’s is benefiting from the COVID-19 shutdown as demand increased from stay-at-home consumers.

The broker also noted that the company’s supply chain isn’t impacted by the pandemic and that management is increasing their advertising spend when competitors are hunkering down.

“Summer is normally slower in Europe given ~30% of population is abroad at any time, but this season will be unusual given many consumers will not be travelling,” said Macquarie.

The broker’s 12-month price target on the stock is $66.10 a share.

More reading

• How Australian super funds are letting the team down on ethics
• Here are another 2 insanely cheap ASX 200 shares to buy right now
• 2 crazy cheap ASX 200 shares you could still buy
• These ASX bank stocks just got upgraded by top brokers to “buy” – and they aren’t the big four
• Does the ASX 200 just follow the US markets?

Motley Fool contributor Brendon Lau owns shares of Macquarie Group Limited. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool Australia has recommended Domino’s Pizza Enterprises 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 Latest 3 ASX buy ideas from leading brokers appeared first on Motley Fool Australia.

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Unfortunately, most Aussies probably don’t pay as much attention to their superannuation affairs as they should. Even if you’re not very interested in your super, most of us would agree that the custodians of our retirement funds should be using their power for the greater good. 

Australian Super funds invest a lot of our money in S&P/ASX 200 Index (ASX: XJO) shares. That gives them considerable weight to throw around when it comes to attending annual meetings and voting on company matters. Especially on issues like climate change, gender equality and other ethical concerns.

Unfortunately, new reporting from Business Insider indicates that most super funds’ bark isn’t quite matching up to their bite on these matters. The Business Insider article quoted the Australasian Centre for Corporate Responsibility’s (ACCR) Director of Climate and Environment, Dan Gocher in saying:

“Just 7 out of 50 funds have shown sustained support for shareholder proposals over 3 years, putting into question the responsible investment practices of a large number of funds.”

On matters of climate change, only 7 of the largest funds supported proactive climate change policies more often than they’ve opposed them over the last 3 years. The reporting notes that there were some funds that barely supported any pro-climate policies at all.

On matters of gender pay equality, we saw a similar story with 9 funds supporting more measures than opposing.

Turning to political lobbying transparency, it was even worse. Just 5 of the funds had positive voting records.

Make a difference with your Australian super fund

If you find these statistics upsetting, I don’t blame you. Super is our money at the end of the day. And I think that by extension, super funds, as the custodians of our money, should reflect the views of the people whom ‘their’ capital truly belongs to when it comes to having a say on how ASX companies are run.

If you feel strongly about this, I would suggest contacting your super fund and letting them know your views. Perhaps you could even switch your fund to a more ‘activist’ option if you’re still not happy.

For better or for worse, money talks in the world of investing. Thus, if you want your money to speak your values, it might be a good time to make it so.  There are super funds out there that specialise in ethical investing, but you should still make sure you are getting a good deal on your fees and performance returns. Money talks louder when it’s growing at the fastest rate possible!

More reading

• Latest 3 ASX buy ideas from leading brokers
• Here are another 2 insanely cheap ASX 200 shares to buy right now
• 2 crazy cheap ASX 200 shares you could still buy
• These ASX bank stocks just got upgraded by top brokers to “buy” – and they aren’t the big four
• Does the ASX 200 just follow the US markets?

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 How Australian super funds are letting the team down on ethics appeared first on Motley Fool Australia.

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Earlier today, my colleague Lina Lim outlined 2 crazy cheap ASX 200 shares that are still in the buy zone. With the S&P/ASX 200 Index (ASX: XJO) rallying yet again today, it’s becoming harder and harder to sniff out such bargains. But luckily, I’ve found 2 more. 

With many effects of the coronavirus pandemic on our economy still unclear, ASX bargain hunting these days can be fraught, in my view. Usually, the few shares that are ‘cheap’ are priced that way for a good reason.

But here are the 2 ASX 200 shares I think are still cheap enough today to warrant some bargain buying and why.

BHP Group Ltd (ASX: BHP)

BHP is the ASX 200’s largest miner and a truly global player on the commodities scene. Just to be clear, BHP shares are not as cheap as they were even just a few weeks ago. In fact, the BHP share price has climbed 50% since the lows we saw in March.

But here’s why I’m thinking of ‘The Big Australian’ as cheap today. The price of iron ore (BHP’s largest moneymaker) has exploded in recent weeks, even rising above US$100 per tonne last week.

We have seen BHP’s fellow iron ore miner Fortescue Metals Group Limited (ASX: FMG) make new all-time highs, yet the BHP share price is still substantially below the highs we saw last year. As such, I think there is still plenty of room for BHP to run from here – and shower its shareholders with dividend income along the way.

Brickworks Limited (ASX: BKW)

Brickworks has been hit hard by the coronavirus-led crash we saw in March and has yet to approach its pre-crash highs of above $20 per share.

On one level, this is somewhat justified. Brickworks’ primary source of earnings comes from the construction sector, which is one of the most cyclical industries out there. But Brickworks isn’t just a brick company. It has a ‘side hustle’ of renting out some of its lands for rental income in a joint venture with ASX 200 cohort, Goodman Group (ASX: GMG). It also owns a large stake in Washington H. Soul Pattinson and Co. Ltd (ASX: SOL).

As such, I think this company is cheap as chips today. Its stake in Soul Patts alone is worth approximately $1.9 billion, which is pretty good considering the whole company has a market capitalisation of $2.4 billion. Brickworks also has a stellar dividend history and hasn’t cut its payouts since the 1970s. As such, I think this company is a top ASX 200 buy today.

More reading

• Latest 3 ASX buy ideas from leading brokers
• How Australian super funds are letting the team down on ethics
• 2 crazy cheap ASX 200 shares you could still buy
• These ASX bank stocks just got upgraded by top brokers to “buy” – and they aren’t the big four
• Does the ASX 200 just follow the US markets?

Motley Fool contributor Sebastian Bowen owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Here are another 2 insanely cheap ASX 200 shares to buy right now appeared first on Motley Fool Australia.

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With interest rates at record lows and likely to remain there for some time to come, I continue to believe the share market is the best place to put your money.

But where should you invest your funds? Here are two top ASX 200 shares I would invest $5,000 into right now:

CSL Limited (ASX: CSL)

The first ASX 200 share to consider buying with $5,000 is this biotherapeutics company. I believe a recent pullback in its share price has created a buying opportunity for investors. Especially those that are interested in making a long term investment. This share price weakness has been driven by concerns over its plasma collections during the pandemic and the impact this might have on future immunoglobulin and albumin production.

While this is certainly a risk to consider, I’m optimistic that collections will accelerate once the crisis passes. Especially given the higher unemployment levels, which traditionally leads to higher donations. Another positive is that the pandemic is expected to lead to a sharp increase in demand for flu vaccines in the near term. This increase in demand could offset any weakness experienced with immunoglobulin and albumin sales in FY 2021. Outside this, I believe CSL’s pipeline of lucrative therapies have the potential to drive significant sales and profit growth over the next decade. Overall, I think this makes CSL one of the best buy and hold options on the ASX 200 today.

Xero Limited (ASX: XRO)

Another ASX 200 share to consider buying is cloud-based business and accounting software provider Xero. It has really caught the eye in recent years thanks to its stellar recurring revenue growth and the emergence of its operating leverage. This was on display for all to see in FY 2020 when Xero delivered a 29% lift in annualised monthly recurring revenue (AMRR) to NZ$820.6 million and a 52% increase in EBITDA to NZ$139.17 million.

The key drivers of this have been strong growth in subscription numbers, its high retention rate, and a modest increase in average revenue per user. In respect to the former, Xero added 467,000 net subscribers during the 12 months to finish the period at 2.285 million. And while this is a large number, the company estimates that less than 20% of the global English-speaking target market is using cloud-based accounting software at present. Given how superior this type of software is to Excel spreadsheets and notebooks, I expect more businesses to shift to the technology in the coming years. I believe this will support solid subscription and sales growth over the next decade.

More reading

• Is the CSL share price in the buy zone?
• 3 companies with great intangible asset moats
• Why CSL, Harvey Norman, IPH, & Saracen shares are charging higher
• 5 things to watch on the ASX 200 on Wednesday
• How to become a millionaire before your parents with ASX shares

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. and Xero. 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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High yield ASX dividend shares could be the answer to boost your income.

But you need to be careful. If you go for shares that have unsustainably high dividend yields you could see a dividend cut in the future.

I think the below shares offer the right combination of high yield and potentially a bit of growth:

Rural Funds Group (ASX: RFF)

Rural Funds is one of my favourite high yield ASX dividend shares.

The farmland real estate investment trust (REIT) currently has a FY21 distribution yield of 5.6%. It aims to increase its distribution by 4% each year. I think that’s a solid growth rate with how little inflation there is these days.

Contracted rental indexation is a big factor in growing the rental profit and distribution. It is also investing in productivity improvements at its farms for its tenants, unlocking more rental income.

The long-term weighted average lease expiry (WALE) of more than 10 years gives good income visibility for the ASX dividend share.

Arena REIT No 1 (ASX: ARF)

Arena is another REIT that I’m a fan of. It invests in social infrastructure properties like early learning centres and healthcare buildings.

Some of its largest tenants, by rental income, are big childcare providers like Goodstart and G8 Education Ltd (ASX: GEM).

Arena REIT has been steadily been growing its distributions for several years. The ASX dividend share recently guided that the FY20 distribution would be 13.9 cents to 14 cents per unit. This equates to a FY20 distribution yield of at least 5.8%.

Medibank Private Limited (ASX: MPL)

Medibank isn’t normally a high yield ASX dividend share I’d go for. But I have to give credit to Medibank as a potential income option.

The private health insurer currently has a grossed-up dividend yield of 7.5%. That’s an attractively high yield for an ASX dividend share.

The company recently updated the market to say that it doesn’t really see much of a change to its FY20 guidance despite COVID-19. This should translate into solid earnings for FY20, which should mean Medibank has the ability to maintain its dividend.

There has been a recent agreement for public hospitals to stop charging patients as private patients if they have health insurance. This should be helpful for Medibank’s earnings.

I’m not sure about the long-term direction of Medibank’s policyholder numbers, but there doesn’t need to be much growth for Medibank to continue being a good ASX dividend share during this period. Its good balance sheet also helps the company remain robust.

Foolish takeaway

All three of these ASX dividend shares have attractively high yields. The RBA interest rate is now very low. Of the three options I’m probably most attracted to Rural Funds because it is least affected by what’s going on with COVID-19.

More reading

• Not keen on Westpac? Then buy these top ASX dividend shares instead
• NIB Holdings and 1 other ASX share which I would consider buying for growth and income
• 2 strong ASX dividend shares to bolster your income
• How to replace your entire wage with dividends
• 3 ASX dividend shares for retirees

Motley Fool contributor Tristan Harrison owns shares of RURALFUNDS STAPLED. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED. 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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As a sector, healthcare has provided some of the strongest returns over the past year. The S&P/ASX 200 Health Care Index (ASX: XHJ) has returned more than 26% over the last 12 months, comfortably outperforming the benchmark indexes for other sectors.

But one ASX healthcare share that has blown this return out of the water is Opthea Ltd (ASX: OPT). Impressively, the Opthea share price has skyrocketed more than 350% compared to this time last year.

Opthea is a developer of novel biologic therapies for the treatment of eye diseases. The company specialises in the treatment of wet age-related macular degeneration (AMD) and diabetic macular edema (DME). Wet AMD is the leading cause of visual impairment in the elderly, while DME is the leading cause of visual impairment in diabetic populations.

What’s put a rocket under the Opthea share price?

Investors have been buying up Opthea shares in a hurry ever since the company delivered strong clinical trial results in August last year.

These results related to the company’s flagship OPT-302 combination therapy for treatment-naïve patients with wet AMD. 

According to the release, the OPT-302 (2.0 mg) combination therapy showed statistical superiority for mean visual acuity – the most accepted and sensitive primary efficacy outcome.

These results are significant given that wet AMD is the leading cause of vision loss in people over the age of 50 across the Western world. And from an investor’s perspective, the current standard of care treatments for wet AMD and DME generated more than US$10 billion of revenue in 2018 – so the addressable market opportunity is significant.

What else has Opthea announced?

Another major announcement came this morning when Opthea reported a further set of trial results. However, this time the results related to the OPT-302 combination therapy for the treatment of DME. 

The phase 2a trial found that when OPT-302 was used in conjunction with existing medication, 52.8% of the refractory DME patients gained ≥ 5 letters of visual acuity after 12 weeks.

“These positive topline Phase 2a results in a second disease indication of DME, build on our extensive prior clinical studies in wet AMD which demonstrated superiority in visual improvement with OPT-302 combination therapy compared to anti-VEGF-A monotherapy standard of care,” said CEO and managing director Dr Megan Baldwin.

While the company viewed the outcome of the phase 2a trial positively, it appears investors were expecting a stronger result. At the time of writing, the Opthea share price is down 9.52%, while the S&P/ASX 200 Index (ASX: XJO) is edging 0.20% higher.

The phase 2a trial is ongoing, with the final participants due to complete the week 24 follow-up visit later this month. The company expects the final outcomes for longer-term safety and treatment durability to be available in the second half of this year.

Meanwhile, Opthea noted that it is continuing to plan for its phase 3 program in wet AMD and progress its manufacturing of OPT-302 for phase 3 clinical trials.

More reading

• EML Payments and these ASX mid cap shares could be destined for big things
• 3 ASX biotech shares that have soared higher today
• 3 quality mid cap ASX shares to buy with $3,000

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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It can be challenging times for investors looking to get into the market or add to existing positions. Looking at the recent performance of many S&P/ASX 200 Index (ASX: XJO) and All Ordinaries (ASX: XAO) shares, investors might feel they have missed the boat for buying opportunity. However, here are 2 resilient and incredibly cheap ASX 200 shares which, I believe, are still trading with great opportunity.

1. Tassal Group Limited (ASX: TGR)

Tassal Group is an Australian company engaged in the supply of Atlantic salmon and prawns both in Australia and internationally. It is involved in the full product life cycle from hatching, farming and processing to sales and marketing. 

On 29 April, Taassal commented on the impact of COVID-19 on its business. It noted that while the long-term impacts on the global economy and consumer behaviour are still unknown, the overall market dynamic for salmon remains positive.

Retailer agreements underpin the current domestic pricing while also creating favourable volume levels. Tassal’s domestic wholesale business, however, may face headwinds. This comes as food service businesses such as pubs, clubs, restaurants and cafes may continue experiencing disruptions caused by restrictions. Despite this, the ASX 200 company remains focused on increasing production efficiencies. It will achieve this through the strategic use of exporting whilst maintaining adequate domestic supply. 

From a production perspective, Tassal reports that its salmon biomass growth is exceeding expectations. Furthermore, the company’s optimised pricing should provide increased overall operating and earnings before interest, taxes, depreciation, and amortization (EBITDA) price-per-kilogram returns. This, combined with a focus on more profitable product lines in the domestic and export markets, should translate into increased FY2021 returns for salmon.  

I believe there are many reasons Tassal could be a steady and cheap ASX 200 share for many years to come. It trades at a relatively good price-to-earnings ratio (P/E) of 11.64. This is despite delivering a CAGR of 16.7% for revenue and 12.8% for NPAT over the past 5 years. The company’s history of reliable growth and favourable customer behaviour makes Tassal a good buy at today’s prices. 

2. Credit Corp Group Limited (ASX: CCP) 

Credit Corp specialises in debt purchase and debt collection services. It purchases past-due consumer and small business debts from major banks, utility producers and finance and telecommunication companies. The company operates in Australia, New Zealand and the United States. It works with customers to agree on affordable repayments which improve their credit standing over time while ensuring they can remain active in the community. 

On 29 April, the company provided a market update and proposed equity raising. It had solid metrics leading into the pandemic with Australia and New Zealand debt buying up 9% for the 9 months to March 2020. Its record face value of accounts are under the arrangement of $1.4 billion. Its US debt buying saw collections up 57% and record face value of accounts under arrangement of $0.3 billion. 

However, its collections for April are below pre-COVID-19 expectations. Australia combined with New Zealand and the US have fallen by 15% and 16% respectively. It notes that the medium-term impact on credit-impaired customers may be more severe once temporary government support and community forbearance is withdrawn. 

Its equity raising is focused on strengthening the balance sheet. Under all downside scenarios, Credit Corp’s balance sheet can withstand even the most extreme economic shocks. I believe the company’s improved capital position and history of consistent growth make it a buy at today’s discounted prices. 

Foolish takeaway 

Buying shares that have v-shaped charts is challenging and risky. I believe Tassal Group and Credit Corp are two less volatile businesses and relatively cheap ASX 200 shares which can deliver shareholder value in the medium-long term. 

More reading

• These ASX bank stocks just got upgraded by top brokers to “buy” – and they aren’t the big four
• Does the ASX 200 just follow the US markets?
• ASX 200 up 0.45%: Harvey Norman declares special dividend, gold miners race higher
• Why you can’t afford not to invest in ASX 200 shares in 2020
• These ASX shares could defy the market sell-off this morning

Motley Fool contributor Lina Lim 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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The Commonwealth Bank of Australia (ASX: CBA) share price is trading lower on Wednesday.

In afternoon trade the banking giant’s shares are down 0.65% to $71.73.

Why is the CBA share price in the red?

This decline appears to have been caused by a spot of profit taking in the banking sector today after some stellar gains over the last three weeks.

Prior to today, the CBA share price was up 21% over the previous three weeks.

This actually made it the laggard in the group, with the other big four banks recording even stronger gains over the same period. Though, given how much harder their shares have fallen during the pandemic, this isn’t particularly surprising.

Is anything else weighing on CBA’s shares?

Also potentially weighing on the bank’s shares today was news that Slater & Gordon Limited (ASX: SGH) has filed a class action in the Federal Court.

This class action relates to consumer credit insurance (CCI) for credit cards and personal loans that was sold between 1 January 2010 and 7 March 2018.

The bank has advised that it is reviewing the claim and will update the market when appropriate.

What is the class action?

This class action is similar to one that Slater & Gordon filed against National Australia Bank Ltd (ASX: NAB) for the sale of CCI. That case was recently settled for $49.5 million.

Slater & Gordon commented: “The CBA class action is part of a series of cases following the Banking Royal Commission, which heard that banks were using pressure tactics to sell unnecessary CCI products to customers who were ineligible to claim under the policies. It is the fourth class action Slater and Gordon have issued in relation to CCI products.”

The law firm notes that CBA previously identified that many customers had been sold policies that they were ineligible to claim upon, making them worthless. And while the bank provided refunds to some of their customers, Slater and Gordon believes the remediation program did not adequately compensate customers.

More reading

• Leading brokers name 3 ASX 200 shares to sell today
• Are Aussies still withdrawing cash like crazy?
• How to be like Warren Buffett and not lose money investing in ASX 200 shares
• Afterpay share price overbought says analyst
• Why the CBA share price is lagging its big four cohorts

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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