Tag: Motley Fool Australia

The major ASX bank shares dominate the S&P/ASX 200 Index (ASX: XJO), not to mention many conversations about the Aussie share market.

However, 2020 hasn’t been the best year for the Aussie banks. But one leading fundie thinks that might be about to change…

Why ASX bank shares could be set for a rebound

The latest fundie to step up the plate is Ausbil’s Paul Xiradis. The Aussie fund manager provided his thoughts on the current market and macro outlook for 2020 in a recent client memo.

In the memo, Mr Xiradis said if you believe in a strong Australian and New Zealand economic recovery, “you have to be comfortable with the banks”. He commented that ASX bank shares have become “a pretty attractive proposition” after the coronavirus-induced selldown.

That’s largely due to the nature of the banks’ operations and role in the economy. The banks are “leveraged to an improving economy” and a faster than expected recovery could be a huge factor. That means now could be a “fantastic opportunity” for investors to re-weight to the banks, according to Xiradis.

Ausbil increased its exposure during the recent bear market and is now “the most overweight” it’s been in the banks for years.

How have the banks performed this year?

In short, not well. Commonwealth Bank of Australia (ASX: CBA) and Westpac Banking Corporation (ASX: WBC) shares fell 40.4% and 45.1%, respectively, from 14 February to 23 March.

However, the recovery since that point has been strong. CommBank is down 9.0% for the year, while the benchmark ASX 200 index has fallen 10.2% in 2020.

If a leading fundie like Mr Xiradis is bullish on the banks, maybe it’s time to give them another look in 2020.

What other shares is Ausbil looking at right now?

It wasn’t just ASX bank shares that Mr Xiradis has his eye on right now. Ausbil has increased its exposure to Qantas Airways Ltd (ASX: QAN) and Transurban Group (ASX: TCL) ahead of an anticipated recovery.

In the retail sector, Ausbil is also looking at particular companies within the healthcare, retail and real estate sectors. That includes high-yield options like Goodman Group (ASX: GMG) and JB Hi-Fi Limited (ASX: JBH).

More reading

• Are Transurban shares a hot buy today?
• 5 things to watch on the ASX 200 on Friday
• Top ASX dividend shares to buy in July 2020
• Market close: ASX 200 drops 0.7% today
• The ASX tech ETF you can buy and hold forever

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Transurban 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.

The post Why this fundie sees an ASX bank share recovery appeared first on Motley Fool Australia.

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You wouldn’t think a toll road operator could outperform in the middle of a pandemic. However, that’s exactly what Transurban Group (ASX: TCL) shares could do in 2020.

Why could Transurban shares outperform this year?

It’s not just me whose bullish on Transurban right now. Leading Ausbil fund manager, Paul Xiradis, is also keen on the Aussie toll road operator.

In fact, in a recent memo to Ausbil clients, Mr Xiradis said the fund has increased its exposure to Transurban with an eye to the coronavirus recovery.

Essentially, Ausbil’s base case is for a quicker than expected recovery. If the economy bounces back, that could mean a faster return to normal traffic numbers. That means more toll road income for Transurban both in Australia and North America.

Given the share market is forward-looking, this could mean Transurban shares have been oversold by investors fearing the worst.

What do the numbers say?

The Transurban share price has fallen 9.0% this year but is still outperforming the S&P/ASX 200 Index (ASX: XJO).

All in all, that doesn’t leave it in a bad spot. But if we do see a quick recovery, I agree that Transurban could be a bargain.

The Aussie toll road operator reported a 50% drop in traffic numbers in mid-April. That spooked investors and saw many selldown Transurban shares. However, things are starting to turnaround for the better. In the group’s 22 June trading update, Transurban reported its Australian traffic numbers were down 20% from early March and commented that the impact had peaked in mid-April, with a progressive recovery evident since. 

Changing attitudes towards commuting could also help Transurban’s earnings. More Aussies are working from home, which could be a drawback on overall traffic numbers. However, those that are commuting could be increasingly likely to drive to work rather than use public transport due to heightened hygiene concerns.

Transurban also recently opened the M8 toll road and commenced tolling on the M5 East on 5 July. That’s good news for long-term growth and could be a cornerstone for future revenue.

Is now the time to buy? 

The Transurban share price is still down on where it started the year. Despite some challenges, now could be a good time to pick up Transurban shares for a bargain if you’re bullish on a quick recovery.

More reading

• Why this fundie sees an ASX bank share recovery
• 5 things to watch on the ASX 200 on Friday
• Market close: ASX 200 drops 0.7% today
• The ASX tech ETF you can buy and hold forever
• Why brokers think you should buy the slumping Woodside Petroleum share price today

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Transurban 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.

The post Are Transurban shares a hot buy today? appeared first on Motley Fool Australia.

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If you have space in your portfolio for some ASX dividend shares, then you might want to consider the two listed below.

Both of these ASX dividend shares offer generous yields which smash the interest rates offered on savings accounts and term deposits. Here’s why I like them:

Dicker Data Ltd (ASX: DDR)

The first ASX dividend share to look at is Dicker Data. It is a wholesale distributor of computer hardware and software in the ANZ region. I’ve been very impressed with the way the company has consistently delivered solid earnings and dividend growth over the last few years. This has been driven by a combination of new vendor agreements, industry tailwinds, and solid demand.

Pleasingly, its growth has accelerated in FY 2020, thanks partly to the pandemic. This has put Dicker Data in a position to deliver a bumper profit result this year. In light of this, the board intends to increase its dividend by 31% to 35.5 cents per share. Which based on the latest Dicker Data share price, represents a 5.1% fully franked dividend yield.

National Australia Bank Ltd (ASX: NAB)

If you don’t have exposure to the banking sector, then you might want to consider buying NAB shares. Although times are hard for the bank right now and a rise in bad debts seems inevitable, I’m optimistic that this is more than priced into its shares following its provisions update. As a result, I think the worst could now be behind the bank and it could be an opportune time to pick up its shares.

This is especially the case if you’re looking for dividends in this low interest rate environment. Based on the latest NAB share price, I estimate that NAB’s shares currently offer investors a generous fully franked 5.1% FY 2021 dividend yield.

More reading

• ASX 200 flat: Big four banks and travel shares push higher, Breville tumbles lower
• Why Goldman Sachs’ revenue surge bodes well for the Macquarie Group share price
• 2 ASX tech shares to buy and hold beyond 2025
• Biggest dividend cuts in 10 years to hit ASX investors next month
• Why I would buy Telstra and these ASX dividend shares

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Dicker Data 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 NAB and this ASX dividend share appeared first on Motley Fool Australia.

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It was a disappointing day of trade for the S&P/ASX 200 Index (ASX: XJO) on Thursday. After a positive start the benchmark index gave back its gains and fell 0.7% to 6,010.9 points.

Will the market be able to bounce back from this on Friday? Here are five things to watch:

ASX 200 expected to rise.

The ASX 200 index looks set to rise this morning despite a poor night of trade on Wall Street. According to the latest SPI futures, the ASX 200 is poised to open the day 14 points or 0.25% higher this morning. On Wall Street the Dow Jones fell 0.5%, the S&P 500 dropped 0.35%, and the Nasdaq tumbled 0.7% lower.

Oil prices drop.

Energy producers such as Oil Search Limited (ASX: OSH) and Santos Ltd (ASX: STO) could come under pressure today after oil prices pulled back. According to Bloomberg, the WTI crude oil price is down 1.2% to US$40.72 a barrel and the Brent crude oil price has fallen 1.15% to US$43.29 a barrel. Oil prices dropped lower after OPEC+ agreed to ease their output curbs.

Gold price falls.

It could be a tough end to the week for gold miners such as Evolution Mining Ltd (ASX: EVN) and Newcrest Mining Limited (ASX: NCM) after the gold price below the US$1,800 an ounce level. According to CNBC, the spot gold price fell over 1% to US$1,796.00 an ounce after the European Central Bank kept its monetary policy on hold.

Medibank rated as a sell.

The Medibank Private Ltd (ASX: MPL) share price could be heading lower from here according to analysts at Goldman Sachs. This morning the broker retained its sell rating and $2.83 price target on the private health insurer’s shares. Goldman continues to believe its shares are overvalued considering its near term prospects.

QBE rated as a buy.

One insurance company that analysts at Goldman Sachs are positive on is QBE Insurance Group Ltd (ASX: QBE). This morning the broker retained its conviction buy rating and $10.80 price target on the company’s shares. It believes there are medium-term opportunities for QBE that could generate value for investors.

More reading

• Market close: ASX 200 drops 0.7% today
• The ASX tech ETF you can buy and hold forever
• Why brokers think you should buy the slumping Woodside Petroleum share price today
• How to pick an ASX 200 share market bubble
• Retail investors behaved differently in the March ASX 200 market crash than the GFC. Here’s how

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.

The post 5 things to watch on the ASX 200 on Friday appeared first on Motley Fool Australia.

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Along with our Top ASX Stock Picks for July, we also asked our Foolish writers to pick their favourite ASX dividend shares to buy this month.

Here is what the team have come up with…

Matthew Donald: BHP Group Ltd (ASX: BHP)

BHP is in a strong financial position according to its operational review for the 9 months ended 31 March 2020, released on 21 April this year.

This position is assisted by low cost operations and ability to generate solid cash flows. For this reason, I believe BHP has the means to continue paying strong dividends to its shareholders. Additionally, this is strengthened by a resilient iron ore price and strong volumes.

Furthermore, BHP’s production guidance for FY20 remains unchanged for petroleum, iron ore and metallurgical coal. Copper guidance is broadly unchanged.

Motley Fool Contributor Matthew Donald does not own any shares in BHP Group Limited.

Nikhil Gangaram: Coles Group Ltd (ASX:COL)

Coles Group is my dividend pick for July. With fears of a second wave of the coronavirus pandemic emerging, supermarkets like Coles could see a renewed surge in demand. In addition, the company’s defensive qualities could position it for greater earnings and dividend growth in 2020 and beyond.

Coles boasts a fully franked dividend yield of around 3.7% and has a favourable dividend payout ratio. The company recently paid out more than $400 million to its shareholders for its interim dividend. Coles is well positioned for future growth, recently hiring 12,000 team members and continuing to invest in its operating expenditure plans.

Motley Fool contributor Nikhil Gangaram does not own shares in Coles Group Limited.

Daryl Mather: Centuria Office REIT (ASX: COF)

Centuria Office REIT is the largest listed pure play office REIT in the country. In addition, at the time of writing it is valued at ~31% lower than the company’s net tangible assets per share.

Of all the real estate sectors, I believe office buildings are the least likely to feel a near-term impact. Office leases are long, and they are often rented to large-cap corporate clients.

Centuria Office pays a trailing 12-month dividend yield of 8.81% and I also expect a reasonable level of share price growth over the next 2–3 years.

Motley Fool contributor Daryl Mather does not own any shares of Centuria Office REIT.

Lloyd Prout: Altium Limited (ASX: ALU)

Altium may not be the most obvious dividend stock, nor is it the cheapest at 58x earnings. But, with a 1.1% dividend yield and a share price approximately 20% below its February highs, I think the company provides long-term investors a great total return opportunity.

Altium has been able to grow earnings at an impressive rate, which has allowed the company to increase its dividend at a compound annual growth rate of nearly 19% per annum since FY15. I expect more of this in the future as the company matures and dominates its industry.

Motley Fool contributor Lloyd Prout owns shares in Altium Limited and expresses his own opinion.

Phil Harpur: Wesfarmers Ltd (ASX: WES)

Wesfarmers is an ASX 20 company that you are probably familiar with.

What really appeals to me about Wesfarmers during our current challenging times is its diversification across a broad spectrum of our economy.

The group has operations in retail segments, including general merchandise and office supplies, as well as industrial segments such as energy and fertilisers. This diversification can act as a buffer to any industry-specific challenges that may arise.

Wesfarmers’ online offerings have seen increased demand during the coronavirus crisis. For the half year to early June, online sales surged by a massive 89%.

The group also pays a very attractive forward dividend yield of 3.4%, fully franked.

Motley Contributor Phil Harpur does not own shares in Wesfarmers Ltd.

Tristan Harrison: APA Group (ASX: APA)

APA Group is one of the best ASX dividend shares, in my opinion.

It owns a vast network of 15,000km of natural gas pipelines around Australia with a presence in every mainland state and the Northern Territory. It also has stakes in gas storage facilities, gas-fired power stations and renewable energy generation. APA owns, or manages and operates, a portfolio of assets worth more than $21 billion and delivers half the nation’s natural gas usage.

It has grown its distribution every year for a decade and a half. At the APA share price at the time of writing, its FY20 dividend yield is around 4.6%.

Motley Fool contributor Tristan Harrison does not own shares of APA Group.

Brendon Lau: Telstra Corporation Ltd (ASX: TLS)

It won’t be easy to find relatively dependable dividend payers as we head into the profit reporting season, but I think Telstra checks most of the boxes. While management is committing to ramping up its spending on building its 5G network during the COVID-19 shutdown, the telco has sufficient firepower to keep paying a 16 cents a share dividend for FY21. That gives it a gross yield of around 6% if franking is included.

Motley Fool contributor Brendon Lau owns shares of Telstra Corporation.

Chris Chitty: Coca-Cola Amatil Ltd (ASX: CCL)

Coca-Cola Amatil is the well known bottler of Coca-Cola soft drinks and a variety of other beverages in Australasia. It has seen volume decline as a result of the coronavirus pandemic, however, it has stated that the effect on earnings before interest and tax will be contained due to cost cutting.

While the company may reduce its dividend, it has been a reliable payer of dividends over the long term and will likely maintain a solid yield. Coca-Cola Amatil has a trailing dividend yield of 5.45%, unfranked.

Motley Fool contributor Chris Chitty does not own shares in Coca-Cola Amatil Limited. 

Toby Thomas: Fortescue Metals Group Limited (ASX: FMG)

There are only three sure things in this world: death, taxes, and a hefty dividend from Aussie miners like Fortescue. Boasting an already impressive trailing annual yield of 6.45% (fully-franked), I think it’s likely that Fortescue will maintain or even increase its next distribution payment in September.

The mining juggernaut is benefitting from the price of iron ore steadfastly perched at over $100 per tonne, coupled with an extended closure to competitor Vale’s Brazilian mines due to COVID-19 lockdowns. Due to these tailwinds and China’s unrelenting demand for high-quality iron ore throughout this year, I think Fortescue is a must-have for dividend-seekers.

Motley Fool contributor Toby Thomas does not hold shares in Fortescue Metals Group.

Sebastian Bowen: Brickworks Limited (ASX: BKW)

Brickworks is an ASX dividend ‘quiet achiever’. On the surface, its 3.5% dividend yield doesn’t look too special. But this building materials manufacturer (and part-time landlord) has held or grown its shareholder payouts every year since 1976. That’s a record that few, if any, other companies can match.

As Brickworks is in an evergreen and hard-to-disrupt industry, I think this ASX dividend stalwart can keep its streak going for at least another 44 years. As such, I don’t think any ASX dividend investor will regret holding Brickworks in an income-focused portfolio for the foreseeable future.

Motley Fool contributor Sebastian Bowen does not own shares of Brickworks.

James Mickleboro: Goodman Group (ASX: GMG)

Although the shares of this owner, developer, and manager of industrial real estate don’t provide the biggest yield on the ASX, I believe it is still worth considering.

Thanks to its exposure to the ecommerce market through relationships with giants such as Amazon and DHL, I believe Goodman Group is well-positioned to grow its distribution at a strong rate for years to come. This could make it a real income star of the future.

For now, based on the latest Goodman Group share price, I estimate that it offers investors a 2.1% FY 2021 distribution yield.

Motley Fool contributor James Mickleboro does not own shares of Goodman Group.

More reading

• 2 ASX shares for investors aged 50+
• Forget property! I’d buy these ASX dividend shares instead
• 3 must-buy ASX growth shares for July
• Why outperforming ASX retail stocks could be running out of puff
• 5 ASX shares with huge moats to own today

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Altium. The Motley Fool Australia owns shares of and has recommended Brickworks and Telstra Limited. The Motley Fool Australia owns shares of APA Group, COLESGROUP DEF SET, 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.

The post Top ASX dividend shares to buy in July 2020 appeared first on Motley Fool Australia.

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Buy and hold investing may not be an exciting get-rich-quick strategy, but it has the potential to generate significant wealth over the long term.

Some of the world’s richest people, such as legendary investor Warren Buffett, have used this strategy to build their fortunes and there is nothing to stop the average investor from doing the same.

With that in mind, here are two ASX shares that I think would be excellent buy and hold options:

Kogan.com Ltd (ASX: KGN)

I think that this ecommerce company could be a great buy and hold option. Over the last few years it has been benefiting greatly from the shift to online shopping. Pleasingly, this shift has accelerated because of the pandemic. Perhaps even more than you might think. Adobe estimates that the pandemic has accelerated ecommerce growth by 4 to 6 years.

If this proves to be the case, then it is likely to underpin exceptionally strong earnings growth for Kogan in FY 2020 and FY 2021. Though, management isn’t settling for that. It recently raised $120 million to fund the potential acquisitions of businesses that it believes will add value and drive further growth.

ResMed Inc. (ASX: RMD)

ResMed is another ASX share which I would buy and hold. I think the medical device company is a great buy and hold option due to the proliferation of obstructive sleep apnoea (OSA). Management estimates that just 20% of OSA sufferers have been diagnosed at this point, but I expect that to change in the future as education around the sleep disorder increases.

And thanks to the quality of its products and software, I’m confident ResMed will capture a greater slice of this growing market over the next decade. Overall, I expect this to support strong earnings growth for years to come and drive the ResMed share price notably higher over the 2020s.

More reading

• Why outperforming ASX retail stocks could be running out of puff
• 4 excellent ASX growth shares to buy in FY 2021
• Which ASX shares will benefit from the second lockdown?
• 3 ASX shares to buy before earnings season
• Nanosonics and 1 more ASX healthcare share to buy and hold beyond 2025

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 Kogan.com ltd. The Motley Fool Australia has recommended Kogan.com ltd and ResMed Inc. 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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Due to the expected growth in demand for healthcare services globally because of ageing populations, improving technologies, and increasing chronic disease burden, I believe the healthcare sector is a great place to invest with a long-term view.

But with so many options to choose from in the sector, it can be hard to decide which ones to buy.

To narrow things down I have picked out three ASX healthcare shares I think could be long-term market beaters:

CSL Limited (ASX: CSL)

I believe this biotherapeutics company is well-positioned for long term growth. This is due to the quality of its CSL Behring and Seqirus businesses. Both are leaders in their industries, have world class product portfolios, and lucrative product development pipelines. This pipeline is underpinned by the company investing 10% to 11% of sales into research and development activities each year. For example, in FY 2019 CSL invested US$832 million into research and development. Management believes these investments are the engine that will help drive sustainable growth and I completely agree.

Pro Medicus Limited (ASX: PME)

Another ASX healthcare share to consider buying with a long term view is Pro Medicus. It is a leading provider of a full range of radiology IT software and services to hospitals, imaging centres, and healthcare groups. It has been growing at a very strong rate over the last few years thanks to growing demand for its offering from a number of leading healthcare institutions. Given the quality of its products and its sizeable market opportunity, I believe Pro Medicus is capable of continuing this strong form for some time to come.

Ramsay Health Care Limited (ASX: RHC)

A final ASX healthcare share to buy is Ramsay Health Care. It is a leading private hospital operator with 480 facilities across 11 countries. This makes it one of the largest and most diverse private healthcare companies in the world. I believe this puts Ramsay in a great position to capture the growing demand for healthcare services globally once trading conditions return to normal following the pandemic.

More reading

• 5 ASX shares with huge moats to own today
• 3 outstanding ASX 200 shares for retirees to buy today
• 2 quality ASX healthcare shares to snap up at more attractive prices
• Which ASX shares will benefit from the second lockdown?
• Macquarie picks ASX stocks that can deliver positive earnings surprises next month

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’s parent company Motley Fool Holdings Inc. recommends Pro Medicus Ltd. The Motley Fool Australia owns shares of and has recommended Pro Medicus Ltd. The Motley Fool Australia has recommended Ramsay Health Care Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The S&P/ASX 200 Index (ASX: XJO) fell by 0.7% today to 6,011 points.

COVID-19 continues to spread in the south east of the country. Victoria announced another 317 confirmed cases – the largest increase since the start of the pandemic. Meanwhile, NSW announced 10 more COVID-19 cases. Four of them were in hotel quarantine, three were associated with the Crossroads Hotel and another three are ‘under investigation’.

Australia’s unemployment rate rises

The latest employment stats from the Australia Bureau of Statistics (ABS) were a mixed bag.

Australia’s unemployment rate increased from 7.1% in May to 7.4% in June, with an additional 69,300 people unemployed. However, on the plus side there were also an extra 210,800 more people employed. This included 38,100 less full time employees and 249,000 more part-time employees.

The share price of ASX 200 employment site SEEK Limited (ASX: SEK) rose by 1% today and the Commonwealth Bank of Australia (ASX: CBA) share price fell 0.1%.

BWX Ltd (ASX: BWX) launches a capital raising

Beauty business BWX is launching a capital raising to fund the development and construction of a new manufacturing facility and support office. The facility is expected to be earnings per share (EPS) accretive in FY23 and onwards.

It’s going to be funded by a fully underwritten institutional placement of $40 million at a share price of $3.40. This price is a 7.1% discount to the last closing price of $3.66.

The facility should result in improved labour productivity and efficiency improvements, material waste reduction of around 50% and material cost reduction.

BWX also announced some unaudited FY20 numbers. Revenue increased by 25% to $187.6 million. Earnings before interest, tax, depreciation and amortisation (EBITDA) (pre-AASB 16) rose by 30% to $27.5 million. The gross profit margin increased to 58%. Net debt improved from $42.8 million last year to $32 million at 30 June 2020.

BWX Chief Operations Officer Mr Rory Gration said: “This world class facility is expected to significantly boost BWX’s in-house manufacturing capacity, capability and competitive advantage; provide up-skilling opportunities for our team; enhance the ways in which we serve our retail partners, customers and consumers all over the world.”

Medibank Private Limited (ASX: MPL) resolves ACCC proceedings

Medibank announced this afternoon that it has resolved Australian Competition and Consumer Commission proceedings regarding ahm’s boost and lite products with the federal court approving the agreed settlement with the ACCC.

The ACCC has also accepted an enforceable undertaking offered by the ASX 200 private health insurer.

These proceedings relate to representations made by ahm when responding to claims and eligibility enquires by customers for joint investigations and reconstruction procedures under ahm’s boost and lite products.

Medibank will pay a $5 million penalty as well as a payment of $400 to customers who have not yet submitted or have not received payment for a claim of compensation. This payment is expected to be made to around 670 customers.

The Medibank share price fell 1.3%, but it wasn’t one of the worst performers in the ASX. That was Breville Group Ltd (ASX: BRG). 

Beacon Lighting Group Ltd (ASX: BLX) share price shines

The Beacon share price went up almost 10% today after giving a trading update for FY20.

Reported sales were $252 million, an increase of 2.6%. Underlying sales, excluding Beacon Energy Solutions, amounted to $251 million – this was growth of 8%. Company stores achieved comparative sales growth of 7.2%. Online sales growth was 50.6%.

Reported FY20 net profit after tax is expected to be approximately $22 million, representing growth of 38.5%. Underlying net profit after tax is expected to be around $19 million, up 16.7%. The underlying profit measure excludes the Parkinson Distribution Centre sale, the AASB 16 lease accounting changes and Beacon Energy Solutions.

Beacon Lighting CEO Glen Robinson said: “Despite the disruptive times over the second half of FY20, the group has been able to achieve outstanding results. These results would not have been possible if it was not for our adaptable and resilient team at Beacon Lighting and the continued support of our valued customers. Our ongoing commitment to innovate the lighting and ceiling fan categories, ensures our customer receive the latest products.”

More reading

• The ASX tech ETF you can buy and hold forever
• Why brokers think you should buy the slumping Woodside Petroleum share price today
• How to pick an ASX 200 share market bubble
• Retail investors behaved differently in the March ASX 200 market crash than the GFC. Here’s how
• Why outperforming ASX retail stocks could be running out of puff

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended BWX Limited. The Motley Fool Australia has recommended SEEK 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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Cheap ASX shares can be a great way to beat the market if you’re able to find opportunities that other people haven’t identified.

Some growth shares like Afterpay Ltd (ASX: APT) are now priced so highly that it’s hard to see how much further they can rise.

Finding unloved gems could be how investors beat the market over the next six months (and the longer-term) at the current share prices.

Here are three examples:

Vitalharvest Freehold Trust (ASX: VTH)

This is one of the only agricultural real estate investment trusts (REITs) on the ASX. Currently, it owns four berry properties and three citrus properties. These are some of Australia’s biggest berry and citrus properties. All of the properties are leased Costa Group Holdings Ltd (ASX: CGC), a high-quality tenant.

The ‘cheap’ part of this ASX shares comes with the discount to the stated net asset value (NAV). At 31 December 2019 it had a net asset value (NAV) of $0.95 per unit. Assuming no change to the NAV – it may have grown since then – today’s share price is an 18% discount to the last NAV. That’s a big discount. Rural Funds Group (ASX: RFF) trades at a premium to its NAV.

I think the discount to the share price could close as investors learn of the growth plans of Primewest Group Ltd (ASX: PWG), which is the new investment manager. It plans to change the name to Primewest Agri-Chain Fund and invest in a wider group of different assets (not just farms) including processing and manufacturing facilities for food, food and beverage packaging facilities and storage facilities related to food.

The rebound of performance of Costa’s farms could also help as the worst of the drought seems to be over. At the current share price, Vitalharvest has a distribution yield of around 6% right now.

NAOS Small Cap Opportunities Company Ltd (ASX: NSC)

This is a listed investment company (LIC). It invests in small caps on the ASX and maintains a high-conviction portfolio of around 10 names.

LICs can give your portfolio targeted diversification. You don’t need to own every single share out there if you just own the more promising ones that do well over the long-term. At the moment it owns shares like MNF Group Ltd (ASX: MNF), Consolidated Operations Group Ltd (ASX: COG) and BSA Limited (ASX: BSA).

This ASX share is cheap because it’s trading at a very large discount to its net tangible assets (NTA). At the end of June 2020 it had a pre-tax NTA of $0.68 compared to today’s share price of $0.49 – that’s a discount of 28%.

I’m not sure what a fair discount for a LIC is, but a 28% discount is very high. High-conviction portfolios can underperform for a longer time period, but sometimes performance can revert back to the long-term average. If that happens then the NTA discount may close up.

At the current NAOS Small Cap Opportunities share price, it has a grossed-up dividend yield of 11.7%.

Tassal Group Limited (ASX: TGR)

The biggest fish business in Australia looks like a cheap ASX share to me.

Salmon and prawns are seen as healthier protein alternatives for consumers. The ASX share continues to diversify its farms geographically and its fish biomass is steadily growing. The company has three different growth avenues – domestic retail, domestic wholesale and export.

Tassal says that there is a rise in consumer demand for sustainable products that have open traceability, particularly products that are seen as quality Australian-made produce.

There is uncertainty in FY20 with COVID-19, but growth is expected to return in FY21. At the current Tassal share price it’s trading at 11x FY21’s estimated earnings. One estimate puts the FY21 grossed-up dividend yield at 7.5%, which is a good way to be rewarded for owning shares.

Foolish takeaway

I think all three of these ASX shares look very cheap at today’s prices. I think Vitalharvest could be the bet most likely to go well because there are several reasons why its share price could rise over the next 12 months: the change in manager, acquisitions, a turnaround in variable rental profit and higher distributions.

More reading

• Get paid huge amounts of cash to own these ASX dividend shares
• 2 ASX shares I’d love to buy right now
• 3 ASX shares that could make a big turnaround
• Tassal and 2 more ASX 200 shares to watch this week
• 3 star ASX shares to buy for the rest of 2020

Motley Fool contributor Tristan Harrison owns shares of NAO SMLCAP FPO and RURALFUNDS STAPLED. The Motley Fool Australia owns shares of and has recommended COSTA GRP FPO, MNF Group Limited, and RURALFUNDS STAPLED. The Motley Fool Australia owns shares of AFTERPAY T FPO. 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 shares now trading at crazy cheap prices appeared first on Motley Fool Australia.

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It’s hard to pick a tech share and get it right. Multitudes already exist with new ones coming on the market regularly. Buying single tech shares means putting your faith in that company to outperform in an extremely competitive industry, however, sitting on the sidelines means watching tech companies become so expensive it’s hard to get a foot in the door.

To further complicate things, not only is it a question of which company to invest in, but which country. With the US markets producing some of the world’s most well-known tech companies, it seems like an easy choice to look overseas for returns.

However, as an Aussie investor, this is easier said than done, particularly if you are trying to invest in multiple countries or gain access to multiple exchanges. But putting tech in the ‘too hard’ basket can mean missing out on staggering returns overseas.

In my view, the solution lies in a global tech exchange-traded fund (ETF):

Morningstar Global Technology ETF (ASX: TECH)

With a ticker like ‘TECH’, this one should be easy to remember. In my opinion, Morningstar have done a great job putting this fund together and I really like the global exposure. Although there are alternative tech ETFs on offer, this one is top of my list.

Country allocation

At the time of writing, the fund’s global allocation is: USA (74.1%), Germany (7.1%), Switzerland (6.2%), Israel (4.1%), Japan (3.8%), Hong Kong (2.4%) and France (2.2%) approx. This is a great spread and really provides that global exposure investors need for the tech industry.

Top 10 holdings

At the time of writing, TECH’s top 10 holdings include: Infineon Technologies (5.0%), Splunk Inc (4.4%), STMicroelectronics (4.4%), Microchip Technology Inc (4.3%), Nice Ltd (4.2%), Broadcom Inc (4.1%), Microsoft Corp (4.0%), Servicenow Inc (4.0%), Zendesk Inc (3.9%) and Guidewire Software (3.9%).

Performance

The fund’s 3-year return at the time of writing clocks in at around 24% per annum and its 3-month return sits at approximately 17%. That’s nothing to sneeze at, considering the current state of the economy. Compared with the S&P/ASX 200 Index (ASX: XJO), which has delivered a 3-year return of just over 4% and a 3-month return of around 10%. I could also provide comparisons to multiple overseas markets, however the value of adding this particular ETF to your portfolio is global diversity and exposure to tech outside of Australia, so it’s pertinent to provide an ASX 200 comparison.

Fees

Something to be aware of with most ETFs is that they have annual fees. TECH has annual management costs of 0.45%. According to CommSec, ETFs on the ASX can range in fees from 0.1% to 1% per year, which puts TECH roughly in the middle as far as costs go. 

Trading and investing

Buying and selling ETFs is done in the same way as regular shares, directly through your chosen broker. Simply search for the ETF using the ticker above.

Foolish takeaway

The returns that tech shares can provide are staggering at times. With our world evolving and becoming more digital in nature by the day, I feel that tech shares should form a part of all portfolios, however, choosing the right ones can be both daunting and expensive.

Investing through ASX ETFs such as TECH means exposure to global tech players. Over multi-year periods, compounded returns in tech ETFs can be hard to beat – and you never know, your ETF might just catch the next Amazon!

More reading

• Market close: ASX 200 drops 0.7% today
• Why brokers think you should buy the slumping Woodside Petroleum share price today
• How to pick an ASX 200 share market bubble
• Retail investors behaved differently in the March ASX 200 market crash than the GFC. Here’s how
• Why outperforming ASX retail stocks could be running out of puff

Motley Fool contributor Glenn Leese has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ETFS Morningstar Global Technology ETF. 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 The ASX tech ETF you can buy and hold forever appeared first on Motley Fool Australia.

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