Tag: Motley Fool Australia

If you are looking to construct a portfolio, I think it’s important to build it with your goals and risk profile in mind.

This means that if you’re in your 20s or 30s, your portfolio is likely to look very different to someone that is approaching retirement.

On this occasion, I’m going to look at constructing a $50,000 growth-orientated portfolio which I believe could provide strong returns over the long term.

Here’s how I would build it:

Altium Limited (ASX: ALU)

I would invest $5,000 into this electronic design software company. Although FY 2020 has been a disappointment because of the pandemic, I believe its long term outlook remains extremely positive. This is because of the Internet of Things boom, which is expected to drive strong demand for its software over the next decade.

BetaShares NASDAQ 100 ETF (ASX: NDQ)

I think investors should consider the BetaShares NASDAQ 100 ETF as a core holding in this portfolio. This is because this ETF gives investors exposure to many of the biggest and arguably best companies in the world such as Amazon, Apple, Facebook, and Microsoft. I would allocate $20,000 to this ETF.

CSL Limited (ASX: CSL)

As the Nasdaq 100 ETF is tech-heavy, with approximately 47% of the fund weighted to the sector, I think balancing things out with some healthcare shares would be a good idea. And what better healthcare share to buy than this biotherapeutics giant. Due to its high quality therapies, expansive plasma collection network, and lucrative R&D pipeline, I believe it is well-placed for growth during the 2020s. I would invest $10,000 into CSL’s shares.

Domino’s Pizza Enterprises Ltd (ASX: DMP)

I would invest $5,000 into Domino’s Pizza. I believe the pizza chain operator could provide strong returns for investors over the next decade. This is thanks to its store expansion plans, the popularity of its pizzas, and its same store sales targets. Combined, I expect Domino’s to deliver solid earnings growth over the long term.

Kogan.com Ltd (ASX: KGN)

I think Kogan is a great way to gain exposure to the retail sector. Especially now that more and more consumer spending is being made online. Due to its strong market position, popular website, and acquisition plans, I believe the ecommerce company can grow at a very strong rate over the next decade. I would invest $5,000 into its shares.

ResMed Inc. (ASX: RMD)

Another healthcare share to invest $5,000 into is ResMed. I believe the sleep treatment-focused medical device company can be a market beater over the next decade. This is thanks to the proliferation of sleep disorders and its industry-leading masks and software.

More reading

• The Kogan share price has quadrupled in value since March: Is it too late to invest?
• 2 ASX shares to ride out a second wave of coronavirus
• Brokers name 3 ASX 200 shares to buy today
• These 2 ASX shares are perfect for a beginner investor
• Why Kogan, Myer, Orocobre, & Qantas shares are dropping lower

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 Altium, BETANASDAQ ETF UNITS, CSL Ltd., and Kogan.com ltd. The Motley Fool Australia has recommended BETANASDAQ ETF UNITS, Domino’s Pizza Enterprises Limited, 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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The S&P/ASX 200 Index (ASX: XJO) was out of form last week amid concerns over a spike in coronavirus cases.

And although the benchmark index charged 1.5% higher on Friday, it wasn’t enough to take the ASX 200 into positive territory. The index finished the week 0.7% lower than where it started it at 5904.1 points.

Not all shares tumbled lower with the market. Here’s why these were the best performers on the ASX 200 last week:

The Western Areas Ltd (ASX: WSA) share price was the best performer on the index last week by some distance with a 22% gain. Investors were buying the nickel producer’s shares after it revealed very positive drilling results from its Sahara prospect within the Western Gawler project in South Australia. In addition to this, its shares were given a boost by a bullish broker note out of Ord Minnett. It upgraded its shares to a buy rating with an improved price target of $3.30.

The Saracen Mineral Holdings Limited (ASX: SAR) share price was the next best performer with a 13.6% gain. Investors were buying Saracen and other gold miners last week after the price of the precious metal jumped to its highest level since 2012. Also climbing higher for the same reason was the Perseus Mining Limited (ASX: PRU) share price with a 9.9% gain.

The Fisher & Paykel Healthcare Corp Ltd (ASX: FPH) share price was on form last week and recorded a 10.2% gain. Investors appear to have been buying the medical device company’s shares on the belief that it will deliver a strong full year result next week. In addition to this, a potential second wave of coronavirus could lead to increasing demand for its ventilators. It was partly for the latter that analysts at Macquarie upgraded its shares to an outperform rating last week.

The Sandfire Resources Ltd (ASX: SFR) share price wasn’t far behind with a 9.8% gain. This appears to have been driven by a broker note out of UBS last week. Its analysts upgraded the copper miner’s shares to a buy rating with a $6.00 price target. It made the move after a sharp pullback in its share price and improvements in the copper price.

More reading

• Wesfarmers and one more ASX share I’d buy in another market crash
• How I’d build a $100,000 portfolio for ASX dividend shares
• ASX 200 rebounds 1.5%, Qantas drops on capital raising
• The latest ASX shares to be upgraded by top brokers to “buy”
• Add the WOW factor to your investment portfolio. Why I think the Woolworths share price is a buy

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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A sizeable decline on Thursday was enough to send the S&P/ASX 200 Index (ASX: XJO) lower last week. The benchmark index tumbled 0.7% lower over the period to 5904.1 points.

While a large number of shares on the index dropped lower last week, some fell more than most. Here’s why these ASX 200 shares were the worst performers on the index:

The Mesoblast limited (ASX: MSB) share price was the worst performer on the index last week with a 19.8% decline. Interestingly, this was the biotech company’s first week on the ASX 200 after joining at the 22 June rebalance. Investors may have been taking profit after some very strong gains over the last few months.

The Corporate Travel Management Ltd (ASX: CTD) share price was out of form last week with an 18.9% decline. Investors were selling travel shares after a spike in coronavirus cases in Victoria sparked fears that the recovery in the domestic travel market might take longer. Also falling heavily were fellow travel bookers Flight Centre Travel Group Ltd (ASX: FLT) and Webjet Limited (ASX: WEB). They dropped 16.8% and 15.1%, respectively, last week.

The oOh!Media Ltd (ASX: OML) share price wasn’t far behind with a 14.9% decline. The outdoor advertising and media company’s shares have come under pressure this month after a disappointing trading update at its annual general meeting. That update revealed that many advertisers have been pushing back their campaigns to the second half of the year.

The Perenti Global Ltd (ASX: PRN) share price was a poor performer with a 14.3% decline. Investors were selling the mining services company’s shares after the release of a business update. Perenti advised that it expects FY 2020 underlying profit after tax to be $106 million to $110 million. This was a 4% to 8% reduction on its guidance that was withdrawn in March.

More reading

• Share price winners and losers of the pandemic
• In today’s market, should you buy ASX shares, buy gold, or hold cash?
• ASX 200 drops 2.5%, ASX travel shares dumped
• ASX 200 down 1.8%: CSL announces new acquisition, Qantas to raise $1.9bn
• Qantas share price on watch as it launches a $2bn cap raise

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited and Webjet Ltd. The Motley Fool Australia has recommended Flight Centre Travel Group Limited and oOh!Media 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.

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Australian manufacturing is not dead, but it’s fighting hard. If a company has a full-scale manufacturing plant in Australia then you can rest assured that they are incredibly efficient. If the market falls again then there are several good manufacturing shares to buy.

Shipbuilding pioneer

Austal Limited (ASX: ASB) is down by more than~13% since announcing on Monday that it had secured US$50 million in government funding. The funding is designed to maintain, protect, and expand US Domestic Production of steel shipbuilding over the next 24 months, beginning June 2020. This announcement underlines the value of Austal to the US defence forces and the importance to the shipbuilding industry there. 

I find Austal to be a wonderful company that executed a fantastic turnaround when David Singleton took over. His recent departure leaves the company in the capable hands of former Chief Operating Officer, Patrick Gregg. Alongside the government funding the company also recently won a $43 million contract modification for the Littoral Combat Ships (LCS).

Other recent announcements include raising of FY20 guidance for group revenue by $100 million and the award of a contract for $350 million to build 6 cape-class patrol boats in Australia.

Before many recent announcements, the company already had a forward order book of $4.3 billion. In my view, this company is very undervalued and provides investors with a good share at a great price. 

Australian packaging shares to buy

The Orora Ltd (ASX: ORA) share price has crashed by ~23% since the share went ex-dividend on 19 June. This points to the current practice of short-term dividend harvesting occurring to try to replace dividends that have been suspended. Nevertheless, it provides investors with a horizon of, say, 1 year, an opportunity to buy a cheap stake in a good company.

Over a 6 year period, the company has managed to grow its earnings per share (EPS) by an average of 24.9% a year. This has been largely due to continuing efficiency improvement as the company’s sales growth has been only about 6% per year. 

Not often discussed is the company’s performance in the US markets. Orora is one of the top 5 providers in the US$50 billion packaging sector. It also owns an advertising company, Orora Visual. This is in the top 4 of the US$10 billion points of purchase and displays segment. I think this is a great share to buy for medium-term capital growth.

Foolish takeaway

Every time the market moves as one there are almost always a lot of shares to buy. This is particularly true with manufacturing shares. While many investors are bedazzled by the performance among the buy now pay later and tech shares, there are very sound companies with a long track record that are on sale at dirt cheap prices. 

More reading

• Why Altium, Austal, Challenger, & Mesoblast shares are tumbling lower
• ASX Stock of the Day: Austal share price surges 9% on US Government agreement
• Why Austal, James Hardie, Northern Star, & Ramelius are storming higher
• ASX 200 flat: Altium update disappoints, Metcash posts full year loss
• A $73m boost sends the Austal share price to the top of the ASX 200 today

Daryl Mather owns shares of Austal Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Austal 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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Buying cheap stocks after the recent market crash may not seem all that appealing to many investors. After all, previous bear markets have often lasted for a prolonged period of time. With the potential for a second wave of coronavirus across many of the world’s major economies, stock prices could come under further pressure in the coming months.

However, the past performance of the stock market shows that it has always been able to recover from bear markets to post new record highs. Therefore, buying cheap stocks that have solid financial positions today could provide you with the greatest scope to benefit from a turnaround for equities over the long run.

Recovery potential

While a stock market rally and a return to previous highs may not seem all that likely in the short run, over the long term it seems probable. The stock market has a strong track record of recovering from challenges such as the global financial crisis, the tech bubble and many other difficulties that have caused investor sentiment to weaken and cheap stocks to become more widely available.

Certainly, coronavirus is an unprecedented event for investors to overcome. It is still too soon to know how significant its impact will be on a wide range of sectors and economies. But previous downturns and bear markets have spawned the same uncertainties among investors. Yet, sentiment has always proceeded to improve after even the most severe declines in stock prices.

Buying cheap stocks

Many investors aim to buy stocks when they are low, and sell them when they are high. One of the main difficulties in implementing this strategy is that for a stock to be cheap, there often must be a significant risk ahead that prompts weaker financial performance or declining investor sentiment.

At the present time, many of the risks facing the world economy appear to have been priced in to stock valuations by investors. Therefore, it is possible to buy high-quality businesses while they are trading on low valuations. This could provide you with a more attractive risk/reward opportunity, since buying any asset at a lower price can provide greater scope for capital growth.

Although there is a risk that cheap stocks will continue to fall in price, over the long run many valuations on offer across the stock market suggest that a wide margin of safety may already be on offer.

Financial strength

Of course, for cheap stocks to deliver on their long-term recovery potential, they must survive a challenging short-term outlook. Therefore, it is vital that investors select companies that have attributes such as modest debt levels, dominant market positions and the right strategies to reduce costs if required in the short run.

Through buying the most appealing businesses while they trade on low valuations, you could boost your portfolio’s long-term growth prospects and improve your financial circumstances in the coming years.

More reading

• How I would construct a $50,000 growth portfolio
• These were the best performing ASX 200 shares last week
• These were the worst performing ASX 200 shares last week
• Here are 2 dirt cheap manufacturing shares to buy next week
• 4 top ASX dividend shares you should never sell

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

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I think there are some great ASX dividend shares that you should never sell.

If you are looking to invest for dividends then I don’t think you should be trying to actively buy and sell them. The idea should be to buy and hold for the long-term, particularly during these COVID-19 times.

With that in mind, here are four ASX dividend shares I don’t think you should ever sell:

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

I firmly believe that Soul Patts is one of the best ASX dividend shares out there. It has paid a dividend every year since it listed on the ASX in 1903. It has also increased its dividend every year since 2000, which is the best record on the ASX.

It’s an investment house that owns a diversified portfolio. Some of its largest positions include telecommunications, property, building products, agriculture, pharmacies and listed investment companies (LICs).

I like that Soul Patts pays its dividend out of its net regular operating cashflows. In FY19 it retained around a fifth of its operating cashflows to re-invest for more opportunities. I like this conservative approach. 

Soul Patts currently has a grossed-up dividend yield of 4.3%.

Brickworks Limited (ASX: BKW)

Brickworks is a diversified property business with a number of attractive divisions. One of its divisions is ‘investments’ where it actually owns a large amount of Soul Patts shares, which provides Brickworks with a reliable and growing stream of dividends.

Brickworks itself is a great ASX dividend share. It hasn’t cut its dividend for over 40 years. Indeed, it has paid a dividend every year since it listed in 1962.

Another division is the industrial property trust that it owns a 50% stake of. These industrial properties are in high demand, particularly with the increase of ecommerce since COVID-19 started.

The building products divisions in the US and Australia are expected to face hard times in the short-term as building activity slows down. However, once the worst of the economic impacts are over, Brickworks could see a return of demand for its bricks and other products.

Brickworks currently has a grossed-up dividend yield of 5.4%.

WAM Microcap Limited (ASX: WMI)

Small caps are not known for being great ASX dividend shares. But the small end of the ASX could be a good hunting ground to generate strong returns .

I think WAM Microcap is one of the best listed investment companies (LICs) on the ASX. It targets shares with market caps under $300 million.

The LIC structure allows WAM Microcap to generate strong total returns and then steadily pass that through to shareholders in the form of reliable dividends.

WAM Microcap has been steadily increasing its ordinary dividend since it started. It has a large profit reserve so I think it should be able to keep maintaining the dividend over the next 12 months.

It currently has a grossed-up dividend yield of 7%.

Rural Funds Group (ASX: RFF)

Rural Funds is an agricultural real estate investment trust (REIT). It aims to increase the distribution by 4% per annum, which is comfortably above inflation. I think that makes it a solid ASX dividend share. 

The REIT has a diversified farm portfolio of almonds, macadamias, vineyards, cattle and cotton.

Farmland generally doesn’t feel the same ups and downs of the economy, which is why its share price and earnings have held up well during the COVID-19 pandemic.

Its rental agreements are with high-quality tenants. Those contracts have built-in rental growth which means that Rural Funds can give shareholders a lot of income visibility.

Management have forecast a distribution of 11.28 cents per unit for FY21, which translates to a current yield of 5.5%.

More reading

• How I’d build a $100,000 portfolio for ASX dividend shares
• I think WAM Microcap is a retiree’s dream dividend share
• 3 of the best ASX dividend shares for income
• Why I think Telstra and these ASX dividend shares are strong buys
• ASX 200 down 1.8%: CSL announces new acquisition, Qantas to raise $1.9bn

Motley Fool contributor Tristan Harrison owns shares of RURALFUNDS STAPLED, WAM MICRO FPO, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks, RURALFUNDS STAPLED, 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.

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The S&P/ASX 200 Index (INDEXASX: XJO) and All Ordinaries (ASX: XAO) are caught between a post-COVID-19 recovery and a second wave of infections. Amidst a time where dividends may waver, I believe the below are 3 safe and reliable ASX 200 dividend shares. 

1. WAM Capital Limited (ASX: WAM) 

WAM Capital is a listed investment company (LIC) which provides investors exposure to an actively-managed diversified portfolio of undervalued ASX growth companies.

WAM’s portfolio objectives are to deliver a steady stream of fully franked dividends, provide capital growth and preserve capital. WAM has had over a decade of growing dividends and cash flows through market-leading investments. 

In the company’s May update, it noted the Australian equity market rallied strongly at the reopening of the domestic economy. Significant contributors to its portfolio outperformance included automotive company Bapcor Ltd (ASX: BAP), retail travel agency Webjet Limited (ASX: WEB) and agricultural companies.

I believe WAM’s consistent performance and keen eye for investment opportunities make it a great ASX 200 dividend share.

It currently pays a dividend yield of 8.40%. 

2. BHP Group Ltd (ASX: BHP)

The iron ore spot price has cracked US$100 per tonne. This comes as the world’s largest iron ore producer, Vale SA, experiences production challenges due to a coronavirus site outbreak.

BHP’s also mines petroleum, copper, metallurgical coal and nickel have also rebounded strongly following March lows. BHP’s portfolio rebound and continued strength of the iron ore spot price should see Aussie miners produce market-leading dividends.

BHP currently pays a dividend yield of 5.96%. 

3. Money3 Corporation Limited (ASX: MNY) 

In a recent Carsales.Com Ltd (ASX: CAR) update, research showed an increase in first-time buyers and people adding another car to their household. This is likely due to consumers looking to avoid public transport.

This narrative bodes well with the Money3 business model that provides automotive finance for the purchase and maintenance of vehicles. The company provides approximately loans to 1 in every 500 vehicles in Australia and 1 in every 800 vehicles in New Zealand.

I believe the business is in a good financial position with $43m in cash and ready to leverage new organic growth when demand returns.

Money3 currently pays a dividend yield of 6.39%. 

More reading

• Fund managers have been buying these ASX shares
• Here are 5 rebound shares to buy with $5,000
• The BHP share price has jumped 40% higher in the last 3 months
• 3 quality ASX shares offering shareholders generous dividends
• You don’t have to time the market to get rich with ASX shares

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 recent share market crash has caused significant losses for many investors. A wide range of shares have not yet recovered from one of the most severe and fast-paced market declines in living memory. Many would be forgiven for thinking now is not a time to look at buying bargain shares.

While further challenges could be ahead for investors, the recent market crash could present a superb opportunity for investors. Although short-term risks remain, the recovery potential of the share market suggests that purchasing a selection of diverse companies today could lead to strong capital returns in the long run.

A rare occurrence

As mentioned, the recent market crash has been one of the fastest and most significant declines in recent decades. Although there have been other bear markets such as the global financial crisis (GFC), they have occurred relatively infrequently. In fact, bear markets are rare occurrences which usually don’t last for a long time before a recovery comes into force.

Therefore there is unlikely to be a substantial number of opportunities for an investor to buy into companies when trading at a bargain share price. Certainly, there are always opportunities to buy attractive shares in all market conditions. But the valuations that are currently on offer across many industries have not been seen since the GFC over a decade ago – if at all. And they are unlikely to present themselves again for many more years.

Buying in a market crash

Although the prospect of buying undervalued shares after a market crash may not feel natural to many investors, it can be a highly profitable exercise. After all, the share market has always recovered from its declines. And this time around is unlikely to be any different in the long run.

As such, it could be a good idea to adopt a long-term view of your holdings and to ignore market noise. Many investors have negative views on the share market. Others are seeking to second-guess the movement of share prices in the short run. Instead, by buying high-quality businesses at low prices you could capitalise on the bargain valuations that are currently present for some shares.

This strategy may require a large amount of self-discipline, as well as an acceptance that paper losses could be ahead in the short run. But it has been a successful strategy for many investors in periods where a market crash has occurred.

Diversification

As well as buying shares after a market crash, it is important to manage risk through diversifying your portfolio. It is very difficult to know which sectors will return to strong growth in the coming years. This is as the full impact of the coronavirus on consumer behaviour remains a known unknown.

Therefore, diversifying your exposure across companies and sectors could minimise your level of portfolio risk. It may also enable you to generate higher returns in the coming years as the share market gradually recovers.

More reading

• 4 top ASX dividend shares you should never sell
• Safe ASX 200 dividend shares to buy today
• 3 top ASX shares to buy for growth investors in July
• Wesfarmers and one more ASX share I’d buy in another market crash
• How I’d build a $100,000 portfolio for ASX dividend shares

Motley Fool contributor Peter Stephens 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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We’re nearly at the end of FY20. I think there are some great ASX shares that would be good buys for growth investors in July.

There is a bit of market uncertainty again with rising COVID-19 numbers in some countries that previously seemed to have things under control.  

I’m not sure about investing in some ASX shares that have run hard. Some shares are being priced as though there won’t be any other COVID-19 disruptions. That may be a bit premature in my opinion.

But I think these ASX growth shares could be good buys:

Share 1: Bubs Australia Ltd (ASX: BUB)

Bubs is an Australian based infant formula producer. It specialises in goat products and it has access to the largest goat herd in Australia. I also like that Bubs recently acquired a production facility which is certified to make products for Chinese consumption.

The ASX share is reporting impressive growth. I believe it will keep delivering solid double digit revenue growth for the rest of 2020.

In the FY20 third quarter to 31 March 2020, Bubs delivered revenue of $19.7 million. This was a 67% increase compared to the prior corresponding period, it was also a 36% increase on the previous quarter. It delivered 137% growth of its infant formula revenue. Chinese revenue jumped 104%.

This large increase in revenue, plus keeping control on costs, helped Bubs deliver a positive operating cashflow of $2.3 million. Positive cashflow is an important milestone for small growth shares. 

Share 2: Bapcor Ltd (ASX: BAP)

Bapcor is Australia’s leading auto parts business.

Bapcor announced this week that it has seen a large amount of sales growth for two of its main divisions.

Management said its retail segment experienced strong demand in May and June with Autobarn same store sales increasing over 45% from the prior year. On a full year basis to the end of June 2020, Bapcor estimated that Autobarn same store sales will increase by approximately 8%.

Burson Trade has also experienced strong demand in May and June with same store sales growth up approximately 10%. On a full year basis, Burson same store sales growth is expected to be around 5%.

Bapcor’s segments that suffered most heavily due to COVID-19 were New Zealand, specialist wholesale and Thailand. These segments are also recovering according to Bapcor.

Management is now experiencing net profit after tax (before significant items) for FY20 to be in the range of $84 million to $88 million.

I’m excited by the ASX share’s overseas potential because it’s only just getting started there.

The lifting of COVID-19 restrictions should be beneficial to Bapcor in the shorter-term, particularly as more cars go on the road. Also, new car sales are dropping, which should mean more people need parts to make their current car last longer.

Share 3: REA Group Limited (ASX: REA)

REA Group is one of many ASX shares that have faced difficulties due to COVID-19 restrictions. Property listings fell heavily during April, with national listings down 33% according to REA Group. Sydney listings were down 18% and Melbourne listings were down 27%.

Volume is obviously an important factor for REA Group. For the three months to 31 March 2020, REA Group experienced a 20% decline in free cash flow.

However, the ASX share said it has a strong balance sheet with low debt levels and a cash balance of $135 million.

Australia is in a pretty good position with COVID-19, apart from the small outbreak in Melbourne. I think that property listing numbers will continue to rise across the country to a more normal level as the country recovers.

Once jobkeeper ends there could be a number of households that are forced to sell because their income has fallen. This would be a painful time for people, but it may boost REA Group’s revenue.

Foolish takeaway

I think each of these ASX growth shares have very compelling futures in the short-term and over the next five years. At moment I think I’d prefer to go for Bubs because it’s a lot smaller with more growth potential. I’m attracted to the amount of growth it could achieve in Asia.

More reading

• REA Group share price has charged 60% since the market bottomed
• ASX 200 drops 2.5%, ASX travel shares dumped
• Bapcor share price falls despite positive update
• Australian businesses are running out of cash
• Bapcor and 1 other quality ASX share to add to your portfolio

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Bapcor and BUBS AUST FPO. The Motley Fool Australia has recommended REA Group 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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Despite ASX shares being marginally down for the week overall, the S&P/ASX 200 Index (ASX: XJO) closed 1.49% higher during Friday’s trade.

That’s a positive step and is sure to give investors some much-needed confidence in their investments. But the recent volatility has got me thinking about which ASX shares I’d like to buy if we see another bear market.

Here are a couple of top picks that I’d like to pounce on if we see more share price declines in 2020.

2 ASX shares on my buy list for the next bear market

Wesfarmers Ltd (ASX: WES) is one ASX share at the top of my buy list if we see another market crash this year.

One reason I particularly like Wesfarmers right now is due to its strong balance sheet. Wesfarmers already had a strong cash position before bolstering its liquidity even further by selling another of its stakes in Coles Group Ltd (ASX: COL) for $1.1 billion in March.

Wesfarmers is a conglomerate, which means it’s a company that invests in a lot of different industries. Right now, it’s a particularly retail-heavy conglomerate but that may be changing.

If CEO, Rob Scott, and his team are on the hunt for buying opportunities, I’ll be keeping Wesfarmers on my watchlist for the next bear market. Many ASX share investors don’t like to buy conglomerates, preferring to diversify their investments themselves.

However, I think Wesfarmers has the possibility of picking up some strategic investments for good prices in the current market which would boost its value in 2020.

Other than Wesfarmers, I also like the look of National Storage REIT (ASX: NSR).

National Storage REIT specialises in self-storage unit investments and I think this is a good sector to be in right now.

If we see more Aussies changing houses as a result of the coronavirus pandemic, this could be good news for National Storage’s earnings. More housing changes could mean more demand for self-storage services in 2020 and 2021. I feel this makes the ASX REIT share worth a look at given its current value of $1.89 per share. 

Foolish takeaway

These are just a couple of the ASX shares I’d like to buy if we see another bear market which results in similar share price falls to those we witnessed in February and March. 

More reading

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• Add the WOW factor to your investment portfolio. Why I think the Woolworths share price is a buy
• Why Qantas and this other ASX 200 stock were just downgraded by top brokers

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