I’ve been keeping a close eye on what substantial shareholders have been doing recently.

Substantial shareholders are shareholders that hold 5% or more of a company’s shares. These tend to be large investors, asset managers, and investment funds. These shareholders are obliged to update the market when they make any changes to their holdings.

As a result, I feel investors should look to use these notices to their advantage. After all, they show where the smart money is going.

Two notices that have caught my eye are summarised below:

Bapcor Ltd (ASX: BAP)

According to a notice of initial substantial holder, Paradice Investment Management has been buying this autoparts retail company’s shares. The notice shows that Paradice has been buying Bapcor’s shares all year, but stepped up the purchases during the market crash. The investment manager now owns 16,486,120 shares, which equates to a 5.047% stake in the company. With its shares down materially from their 52-week high, it appears as though Paradice sees a lot of value in them at current levels. One broker that agrees with this view is Citi. Earlier this month it slapped a buy rating and $6.00 price target on the company’s shares. The broker believes its expansion into Thailand could surprise to the upside.

Citadel Group Ltd (ASX: CGL)

According to a change of interests of substantial holder notice, Perennial Value Management has been increasing its stake in this information management company. The notice reveals that Perennial has picked up approximately 1.4 million shares over the last few weeks to lift its holding to a total of 6,173,004 shares. This means the fund manager now owns a 7.84% stake in the company. Although Citadel’s shares have rebounded strongly from their March lows, they are still trading 53% lower than their 52-week high. Judging by its investments, Perennial appears to believe Citadel will navigate the pandemic just fine. It must also have faith in management’s decision to acquire UK healthcare software company Wellbeing for $200 million.

More reading

• 3 ASX 200 pandemic winners and 3 losers
• 2 bargain ASX shares to buy with $2,000
• Here are all the ASX 200 companies that have announced capital raisings so far in 2020
• Leading brokers name 3 ASX 200 shares to buy today
• 3 ASX shares that are absurdly cheap right now

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Bapcor. The Motley Fool Australia has recommended Citadel 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.

The post Fund managers have been buying these ASX shares appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2ZkEpse

Warren Buffett is usually regarded as the best share market investor of all time. He has managed to build a fortune of over US$67 billion over his long career by investing prudently in the best companies in America through his holding company Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B). So it goes without saying that when it comes to the topic of investing, Buffett is someone we can all look up to.

Our Foolish colleagues over in the US have a comprehensive list of some of Buffett’s best quotes. Here are three to start off your week!

“The most important quality for an investor is temperament, not intellect. You need a temperament that neither derives great pleasure from being with the crowd or against the crowd.”

Here Buffett is touting the benefits of being a ‘contrarian’ investor. If you truly want to outperform the S&P/ASX 200 Index (ASX: XJO) over time (which is what most ASX investors strive for), you need to be willing to make bets against what most investors are expecting. But you also need to be comfortable in your own decisions and not unnecessarily opposed to what the market is pricing. It’s the emotional side of investing that undoes many investors, and this is what Buffett is really warning against here.

“The worst investment you can have is cash. Everybody is talking about cash being king and all that sort of thing. Cash is going to become worth less over time. But good businesses are going to become worth more over time.”

With this quote, Buffett neatly sums up why everyone should invest over the long-term. It’s true that cash is the safest place to store your wealth – but only in the short term. In the long-run, one of the few certainties of investing dictates that cash is a terrible store of value. Governments actually aim to reduce the real value of our dollars over time with their inflation targets. That’s why carefully investing in businesses; shares, is the best way to build long-term wealth, with perhaps a little cash on the sides.

“Buy into a company because you want to own it, not because you want the stock to go up.”

This is such a pithy way of summing up our own Foolish investing philosophy. Investing is about merging your interests with that of a business that you think will succeed in generating wealth over the long-term. It’s not about trading different ticker symbols on a screen. Buffett himself owns shares in Coca-Cola, but he also famously loves drinking Coke himself. Loving a company’s products and investing in said company because of your passion for their business (provided you’ve made sure it’s a great company) is a great way to find winners and feel good about it, too!

More reading

• How is the ASX 200 soaring despite rising unemployment?
• Is it time to buy ASX 200 gold shares?
• The 5 ASX shares that were last week’s biggest fallers
• Is the Mirvac share price about to soar?
• ASX 200 up 1.35%: Gold miners and Fortescue rocket higher, big four banks tumble

Sebastian Bowen 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 Berkshire Hathaway (B shares) and recommends the following options: long January 2021 $200 calls on Berkshire Hathaway (B shares), short January 2021 $200 puts on Berkshire Hathaway (B shares), and short June 2020 $205 calls on Berkshire Hathaway (B shares). The Motley Fool Australia has recommended Berkshire Hathaway (B shares). 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 top Warren Buffett quotes to start off your week appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2ychN25

The process of Virgin Holdings Australia Ltd (ASX: VAH) re-emerging from voluntary administration continues to unfold, with the company announcing it has shortlisted a small number of “well-funded parties with strong aviation credentials”.

While Virgin refrained from naming the parties due to confidentiality reasons, ABC News reports that the shortlist comprises 4 bidders: private equity firms Bain Capital and BGH Capital, US aviation firm Indigo Partners, and New York-based investor Cyrus Capital Partners.

BGH Capital is an Australian and New Zealand-focused private equity firm that is headquartered in Melbourne. Just this morning, details emerged of its revised takeover proposal for entertainment company Village Roadshow Ltd (ASX: VRL).

“Significant step forward”

Virgin described the shortlisting as a significant step forward in the process to find a new owner and bring the airline out of administration as soon as possible.

The deadline for indicative bids was last Friday 15 May, with 8 non-binding offers received and negotiations ongoing with a further 12 parties as of Thursday.

According to Reuters, other parties that put in non-binding indicative offers include Canadian asset manager Brookfield, India’s InterGlobe Enterprises and Australian mining tycoon Andrew “Twiggy” Forrest. The Queensland government also made a surprise bid.

Commenting on the shortlist, lead partner for the administrators, Deloitte’s Vaughan Strawbridge, said:

These parties enable us to seek the best available commercial solution which we are all looking for, while meeting our responsibility to maximise the outcome for creditors and see the airline continue as one of the country’s two carriers serving Australians across cities and regions.

What next?

The embattled airline entered voluntary administration on 21 April, owing around $7 billion to thousands of creditors.

Virgin and its administrators will now work with these shortlisted parties over the next 4 weeks to enable binding offers by mid-June. This will involve the sharing of more detailed financial information, management workshops, and meetings with various stakeholders including financiers, landlords, suppliers and unions.

According to the ABC News report, final bids are due on 12 June 2020.

More reading

• 5 ASX 200 winners and 5 losers of the week
• Why Beach, CBA, Qantas, & Xero shares are dropping lower
• Losers of Virgin Australia’s potential nationalisation
• The Queensland government is aiming to buy a stake in Virgin Australia
• 5 things to watch on the ASX 200 on Thursday

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.

The post Virgin narrows its shortlist down to 4 suitors appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2yceTud

The S&P/ASX 200 Index (ASX: XJO) has had a rollercoaster start to the year. Despite initially being hammered by the coronavirus pandemic shutdown and oil price war, the ASX 200 has had a comeback in recent weeks. In fact, the benchmark index has surged 20.78% since bottoming out at 4,546 points on 23 March.

But despite the recovery, there is still plenty of uncertainty in the markets. Just last week we saw that Australia’s unemployment rate jumped to 6.2% in April with 600,000 jobs lost during the pandemic.

So, how is the ASX 200 still climbing higher despite the bleak economic data?

Why is the ASX 200 soaring higher?

One thing that is helping the Aussie share market in 2020 is better-than-expected data. While COVID-19 has hit the economy hard, economists had forecast much higher unemployment. In fact, Treasury estimates have forecast unemployment to reach 10% in the June quarter. That means that last week’s unemployment figures (while devastating for Aussie businesses and individuals) paint a picture that’s less bleak than expected.

The other bit of good news is the easing of coronavirus restrictions. Australia is slowly coming back to life with many states easing restrictions on gatherings. That’s good news for operators in some of the hardest-hit sectors like domestic travel, hospitality and leisure. 

There’s a long way to go, but the ASX 200 has been climbing higher due to some broader positivity. Share markets are inherently forward-looking, which means investors are pricing in the future rather than the present.

However, there’s another big factor driving the ASX 200 higher right now: money supply. The Reserve Bank of Australia has injected a lot of cash into the economy while the official interest rate is sitting at 0.25%. That means high-interest savings accounts are starting from as little as 0.01% right now.

So, if you’re looking to invest your money, a savings account doesn’t seem like a great return on investment. It’s a similar story with term deposit rates, while bonds are yielding very little. Property in most Aussie towns and cities is very expensive right now, which makes it inaccessible to many investors.

That leaves us with ASX 200 shares. Those Aussies who are still working throughout the pandemic are putting their spare cash into shares to get some sort of return on investment. That’s helping boost the share market higher despite concerns over economic growth, migration and other factors hampering the economy.

More reading

• Is it time to buy ASX 200 gold shares?
• The 5 ASX shares that were last week’s biggest fallers
• Is the Mirvac share price about to soar?
• ASX 200 up 1.35%: Gold miners and Fortescue rocket higher, big four banks tumble
• Meet the ASX 200 company that just posted a 90% surge in profit

Motley Fool contributor Ken Hall 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 is the ASX 200 soaring despite rising unemployment? appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/367jjiy

ASX 200 gold shares made some strong gains on Friday. While the S&P/ASX 200 Index (ASX: XJO) edged 0.25% lower last week, some of the biggest gold companies jumped higher.

For instance, the Saracen Minerals Holdings Limited (ASX: SAR) share price surged 6.99% higher on Friday and closed 13.23% higher for the week. It was a similar story for fellow ASX 200 gold share Northern Star Resources Ltd (ASX: NST) which climbed 7.75% last week.

Clearly, investors are still unsure of how to price in the coronavirus impacts. There’s a lot of uncertainty about the global and domestic economy including how and when restrictions will be eased.

But despite the current confusion, are Aussie gold shares the best way to invest in 2020?

Are ASX 200 gold shares in the buy zone?

Let’s start with why shares in the Aussie gold miners are climbing higher right now. Gold is seen as a safe haven asset, given it’s been a store of value for thousands of years.

Most investors aren’t too keen to buy and hold physical gold. Let’s be honest, gold bullion isn’t the most convenient investment to have.

So the alternative is to get indirect exposure to gold through another vehicle. That vehicle happens to be ASX 200 gold shares for the average investor. Of course, there is still company risk from buying Northern Star or Saracen shares. But if the price of gold surges due to demand, these companies can get a higher realised price and make more profit.

I’m personally not a big gold investor, but I think Aussie gold shares could outperform in the next few months until the global outlook is a little clearer. However, I’m a long-term, buy-and-hold investor.

That means I’d rather buy high-quality companies with long-term prospects. That’s not to say that ASX 200 gold shares like Saracen don’t have long-term prospects, but that I’d rather not put all my eggs in the one basket.

Foolish takeaway

If you’re particularly bearish on the economy, ASX 200 gold shares could be a great buy. I also think a small exposure to commodities can be good for portfolio diversification. However, I’d rather not speculate on the short-term and focus on buying ASX shares for the next 20 or 30 years.

More reading

• How is the ASX 200 soaring despite rising unemployment?
• The 5 ASX shares that were last week’s biggest fallers
• Is the Mirvac share price about to soar?
• ASX 200 up 1.35%: Gold miners and Fortescue rocket higher, big four banks tumble
• Meet the ASX 200 company that just posted a 90% surge in profit

Motley Fool contributor Ken Hall 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 Is it time to buy ASX 200 gold shares? appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2ZdsHzS

At the mid cap side of the market I believe there are a good number of shares which have the potential to grow into large caps over the next decade.

This could make it well worth investing in them with a long term view.

Three top mid cap ASX shares that I would buy right now are listed below. Here’s why I like them:

Clover Corporation Limited (ASX: CLV)

Clover is a producer of ingredients such as omega-3 oils that go into infant formula, supplements, and baby food. It has been growing at a very strong rate over the last few years thanks largely to increasing demand from infant formula manufacturers. Given potentially favourable changes to ingredient requirements in a number of key markets, I expect demand to grow over the coming years and drive strong earnings growth.

Electro Optic Systems (ASX: EOS)

I think Electro Optic Systems is a mid cap share to watch. It is Australia’s largest aerospace company and the largest defence exporter in the Southern Hemisphere. The key product in its portfolio in my eyes is its Remote Weapon System. This system allows the military to remotely operate weapons and machinery. Electro Optic Systems has partnerships with major global aerospace giants and a massive backlog of work that alone looks set to underpin solid earnings growth over the next few years.

Nearmap Ltd (ASX: NEA)

Nearmap is a leading aerial imagery technology and location data company. Its growth has taken a bit of hit this year due to the loss and downgrade of a number of large contracts. While this is disappointing, it is important to note that these customers have not been lost to the competition. I still believe Nearmap is head and shoulders above its rivals and well-placed to capture a greater slice of this growing global market over the next decade.

More reading

• 2 ASX tech shares to buy with stellar growth prospects
• 30% off: 3 ASX 200 shares to buy on the cheap
• Where I’d invest $1,000 into ASX shares right now
• 2 ASX shares that every investor should own
• How to build your first ASX share portfolio

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 Clover Limited. The Motley Fool Australia owns shares of and has recommended Electro Optic Systems Holdings Limited and Nearmap 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.

The post These mid cap ASX shares could grow into large caps in the future appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2zKu5z9