Tag: Motley Fool Australia

Speculation that the federal government is readying a large home buyer’s grant could put the building materials sector on an earnings upgrade cycle.

There are reports that the Morrison government will announce later this week that new home buyers will get a cash handout of between $20,000 to $40,000.

This fourth round of stimulus is aimed at protecting the home construction industry from falling off a cliff, according to a report on Yahoo.

New housing grant

Around 380,000 tradies are expected to benefit from the generous cash handout for existing and first-home buyers looking to purchase newly constructed dwellings.

There’s even talk that the grant will be made available for home renovations, although we shouldn’t get too excited just yet as nothing is confirmed.

The only thing that seems to be reasonably certain is that the new housing grant will at least match the $21,000 offered by the Rudd government during the global financial crisis.

Building to an upgrade

If the new measure works as intended and provides a strong pipeline of home construction activity, brokers will likely scramble to upgrade their earnings expectations for a number of ASX shares.

These include building materials companies Boral Limited (ASX: BLD), CSR Limited (ASX: CSR), Adbri Ltd (ASX: ABC) and James Hardie Industries plc (ASX: JHX).

It’s probably no coincidence that two of the four shares are among the top five best performers on the S&P/ASX 200 Index (Index:^AXJO) today. The pair is Boral and Adbri as they are the worst in the group and would probably have the most to gain.

More stimulus in the pipeline

But the industry may also get a second tailwind. State governments are also tipped to announce separate stimulus on top of the up to $40k grant.

Governments are forced to act after the industry’s peak body, Master Builders Australia, predicted 400,000 building businesses and 1.2 million jobs were in jeopardy due to housing downturn.

The association is pushing for renovations to be included in the package as it claims that will generate $7 billion in economic activity and 24,036 jobs.

“Work for builders and tradies in 2020/21 is fast evaporating and the indications are that 2021/22 will not be much better,” said the chief executive of Master Builders, Denita Wawn.

Other ASX stocks to benefit

If renovations are included, it won’t only be building materials companies that will be smiling. Hardware retailers owned by Wesfarmers Ltd (ASX: WES) and Metcash Limited (ASX: MTS) are also likely to benefit.

If you are wondering why the share prices of property developers like Stockland Corporation Ltd (ASX: SGP) seem to be in the doldrums today, it’s probably because new housing estate developments only make up a part of their portfolio.

Unfortunately for them, the other parts (such as shopping malls) are still under significant pressure.

More reading

• These 5 ASX 200 shares were last week’s biggest winners
• 3 leading ASX 200 shares to buy for market-beating returns
• Top brokers are urging you to buy these ASX shares today
• Leading brokers name 3 ASX 200 shares to buy right now
• The latest ASX 200 stocks to be upgraded by top brokers

Motley Fool contributor Brendon Lau owns shares of James Hardie Industries plc. 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.

The post These ASX shares are set to get a big boost from the next big government stimulus appeared first on Motley Fool Australia.

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The share market was positive last week with the S&P/ASX 200 Index (ASX: XJO) up 5.3%. Australian shares continued their post-crash rally in May with the ASX 200 ending the month up 4.2%. The index has now climbed more than 25% since the March crash, but remains around 20% below February highs. 

Share prices over May were impacted by the loosening of coronavirus restrictions, changing commodity prices, and local economic expectations. With lockdowns easing ahead of initial expectations, the economy is reopening earlier than expected. This has improved confidence prompting a rebound for sectors previously sold off heavily. We take a look at last week’s biggest share price gainers. 

Southern Cross Media Group Ltd (ASX: SXL)

Shares in Southern Cross Media surged 62.1% last week to finish the week at 23.5 cents. The share price rallied mid week despite no news out of the broadcaster, resulting in an ASX price query. Challenger Ltd (ASX: CGF), a substantial holder in Southern Cross Media, has been selling down its stake, with its voting power falling from 8.32% to 6.27% in May. 

Southern Cross shares were dramatically sold down as the coronavirus crisis took hold, falling from above 60 cents in February to just 11 cents in April. The broadcaster completed a $169 million capital raising in May (announced in April) with proceeds used to pay down debt. The capital raising was conducted at 9 cents a share in the face of declining advertising revenues. 

The broadcaster has instituted sweeping cost reductions with $40–$45 million in operating expenditure savings to be realised in CY20. Capital expenditure is being reduced by $3–$6 million over FY20 and FY21. The FY20 interim dividend was cancelled and no final dividend will be paid. 

Following the receipt of the full proceeds of the capital raising, Southern Cross Media’s net debt stood at $161.8 million in early May. Southern Cross managed to achieve positive earnings before interest, tax, depreciation and amortisation (EBITDA) in April, with revenue declines partially offset by operating cost reductions. Southern Cross Media has warned however that bad and doubtful debt provisions could reach $5 million in H2 FY20. 

Virgin Money Uk PLC (ASX: VUK)

Virgin Money shares gained 23.2% last week to close the week at $1.805. There was no news out of the lender last week to prompt the price rise, however investors were favouring ASX banking shares with the big four banks also rising. 

In its interim financial results released earlier in May, Virgin revealed a resilient first half performance, with underlying profit before tax of £120 million. During the half business lending increased by 5.7% while personal lending increased by 6.2%. Costs were down 3% year on year. 

Virgin says it has a defensive portfolio consisting of 82% mortgages, 11% business, and 7% unsecured lending. Its credit card portfolio is prime quality and it has low exposure to more impacted small and medium enterprises. Nonetheless, the lender has booked a COVID impairment provision of £164 million. 

Virgin is taking a disciplined approach to risk management. The loan portfolio has been built prudently and customers and credit lines managed proactively. Virgin says its funding and liquidity position would allow it to withstand a 9–12 month shut out of markets and it has no reliance on short-term wholesale funding. 

Boral Limited (ASX: BLD)

Boral shares climbed 21% last week and finished the week at $3.11. There was no news out of Boral last week to prompt the surge in the share price, however Boral shares were heavily sold off in the March crash and even now are trading 38% down from their February highs. 

Boral is currently embroiled in litigation relating to its US windows business, which it acquired in 2017. In the lawsuit Boral alleges the former owner of the windows business breached non-compete covenants. The former owner has made his own $700 million claim against Boral with litigation ongoing. 

The windows business has been a source of pain for Boral with financial irregularities uncovered in December. These included misreporting in relation to inventory levels and costs associated with raw materials and labor. Pre-tax earnings were overstated by US$24.4 million between March 2018 and October 2019. 

Austal Limited (ASX: ASB)

Austal shares gained 20.1% last week closing the week at $3.34. Shares spiked Friday morning after the shipping company increased FY20 earnings guidance. Austal is now forecasting group revenue of around $2 billion and group EBIT of no less than $125 million. 

The improved forecast is attributable to a number of factors. These include COVID-19 having a more limited impact in April and May than anticipated and the sustained strength of the US dollar. Austal was also awarded a new vessel construction contract in May. 

Austal is a shipbuilder producing commercial vessels and defence prime contractor. It has shipyards across the US, Western Australia, Vietnam, and the Philippines. Shares in the shipbuilder were sold off sharply in the March correction, falling 47%. Austal shares remain 20% down from their February high. 

McMillan Shakespeare Limited (ASX: MMS)

Shares in McMillan Shakespeare climbed 18.8% last week to finish the week at $8.64. The McMillan Shakespeare share price has been in decline since late last year. Revenues and profits fell in the first half, following which coronavirus hit. 

McMillan Shakespeare has reported a decline in novated leasing volumes since the onset of coronavirus, however salary packaging activity remains unchanged. The company has a large customer base in the health, public, and emergency service sectors which should provide some protection against a fall in volumes. 

New asset financing in Australia and New Zealand has declined. The focus in this area is on extending maturing lease contracts and working with customers to restructure lease arrangements. In the UK, McMillan Shakespeare’s asset management business responded to the lockdown by furloughing non-essential staff and reducing salary and other costs. 

More reading

• These ASX shares are set to get a big boost from the next big government stimulus
• 3 leading ASX 200 shares to buy for market-beating returns
• Top brokers are urging you to buy these ASX shares today
• Leading brokers name 3 ASX 200 shares to buy right now
• The latest ASX 200 stocks to be upgraded by top brokers

Kate O’Brien has no position in any of the stocks mentioned. 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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I think that the two S&P/ASX 200 Index (ASX: XJO) shares I’m going to name in this article will be able to beat the market this year and over the long-term. Of course, that’s just my opinion and there’s no guarantee at all.

The ASX is home to some quality growth shares. But it’s also home to plenty of mature businesses with little growth prospects. You just need to find quality growth businesses at the right price.

Here are my two ASX 200 picks:

Brickworks Limited (ASX: BKW) 

Brickworks has been one of the most reliable businesses on the ASX over the past few decades. It hasn’t cut its dividend over the past 40 years and it’s steadily expanding its Australian building products offering with organic growth and acquisitions.

It also recently went into the US with three targeted acquisitions which have quickly made it the market leader in the north east of the US.

The defensive nature of Brickworks’ industrial property trust and holding of ASX 200 investment conglomerate Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) shares are very attractive assets.

We’re now learning that cash grants of between $20,000 to $40,000 may be given to buyers of newly-constructed homes. The government is also apparently considering giving people cash for home renovations to help local tradies according to reporting by the Australian Financial Review. This would likely indirectly benefit Brickworks.

The diversified ASX 200 property business currently offers a grossed-up dividend yield of 5.3%.

A2 Milk Company Ltd (ASX: A2M)

There are few ASX 200 companies that can say they are growing strongly in both the US and China. Those two markets alone could support a much larger A2 Milk business.

A2 Milk has expertly created a brand known for quality and trustworthiness. It’s an offering that resonates with consumers who want a safe (and good-tasting) product.

The current coronavirus pandemic is causing consumers to load up on product, which is helping A2 Milk’s profit margins.

A2 Milk has pretty high profit margins so a healthy amount of the revenue goes straight to the bottom line. The ASX 200 business will soon be generating earnings from Canada with a licensing agreement. There are plenty of other countries for A2 Milk to expand into over time.

I believe there’s plenty more growth to come because A2 Milk is only just getting started in North America. Its huge cash balance could soon start to be used for shareholder returns or even fund an acquisition.

Foolish takeaway

I really like both Brickworks and A2 Milk as ASX 200 share picks. At the current prices I believe Brickworks is cheaper, but A2 Milk is likely to produce stronger returns over the next decade as the global expansion continues.

More reading

• Why a2 Milk, Freedom Foods, Scentre, & TPG Telecom are dropping lower
• Will the A2 Milk share price hit $20 in 2020?
• Got $50,000 to invest for income? Pick these 5 ASX dividend shares
• How you can get very rich with ASX 200 shares
• 10 top ASX growth shares to buy in June for strong returns

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Brickworks. The Motley Fool Australia owns shares of A2 Milk. 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 I think these 2 ASX 200 shares will beat the market appeared first on Motley Fool Australia.

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It wasn’t just Afterpay Ltd (ASX: APT) that was rocketing higher last month in the buy now pay later industry. One of its key rivals also surged higher.

In fact, the Zip Co Ltd (ASX: Z1P) share price was an even stronger performer. It finished the month with an impressive 57% gain.

Why did the Zip Co share price rocket higher in May?

Investors were buying Zip Co’s shares last month after it released a trading update for the month of April. That update revealed that the buy now pay later provider’s strong growth has continued during the pandemic.

For the month ending 30 April, Zip Co delivered an 81% increase in monthly revenue to $15.1 million. This was driven by an 86% lift in monthly transaction volume to $181.6 million and a 70,000 increase in customer number to 2 million.

The latter means the company’s customer numbers have grown 66% since the same period a year earlier. This was supported by a 50% year on year increase in merchant numbers to 23,100.

Another positive was its net bad debts, which came in at 1.99%. Management revealed that this is significantly outperforming the market. In a similar vein, Zip Co’s monthly arrears remained flat at 1.57%. This appears to have convinced the market that there will not be a spike in bad debts during the current crisis.

The company’s Managing Director and CEO, Larry Diamond, was rightfully pleased with its performance.

He said: “April was another very strong month for Zip, and in particular when considering the shutdown of a large portion of the economy. Our product differentiation and penetration into purchases for online, the home, and everyday spend categories, delivered robust transaction volume. Our revenue model has continued to deliver a strong result in the face of a challenging economic environment for retail more generally.”

Will there be more of the same for Zip Co shares in June?

It looks set to be an eventful month for the company in June.

This morning Zip Co requested a trading halt while it undertakes a capital raising to fund a proposed acquisition.

No details have been released regarding the acquisition, but if the market sees value in it then I wouldn’t be surprised to see its shares charge higher in June. But we’ll have to wait and see tomorrow or Wednesday when the company reveals all.

More reading

• 3 top Warren Buffett quotes to start your week right
• This ASX fintech share is up 489% since March
• Why Nearmap’s share price surged by 50% in May
• Openpay share price surges 29% higher after BNPL provider reports record month
• Real wealth from 3 roaring mid caps in May

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 ZIPCOLTD FPO. 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.

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Looking to invest in quality S&P/ASX 200 Index (ASX: XJO) shares with strong long-term growth potential?

I think the following 3 ASX 200 shares are worthy candidates for above-average share price growth over the next 5 years. Each share also has a strong and proven business model across a range of markets.

Bapcor Ltd (ASX: BAP)

Bapcor is the leading second-hand auto parts distributor in Australia and New Zealand. Additionally, an expansion into Thailand is aimed at providing a launching pad to make headway in the Asian market.

I think its recent capital raising of $236 million from institutional and retail investors positions the company well to navigate through any prolonged downturn caused by the coronavirus pandemic. Bapcor also believes the capital raising puts it in a strong position to execute its 5-year growth strategy.

Weaker trading conditions were experienced in late March and early April. However, coronavirus restrictions are now easing. I believe trading is therefore likely to pick up again quicker than anticipated.

Domino’s Pizza Enterprises Ltd. (ASX: DMP)

Domino’s has an aggressive expansion plan. Assuming it executes well on this, I believe the plan positions Domino’s well for strong sales growth over the next 5 years.

Compared to other fast food outlets and restaurants, the company’s revenue base has proven to be fairly resilient during the coronavirus crisis so far.

In its most recent market update in late April, Domino’s revealed that its chain of stores in France were progressively reopening. Additionally, stores in Japan and Germany have maintained strong sales growth, while there has been minimal impact on trading in Australia.

Domino’s doesn’t typically have a sit-down service and any in-store pick-up by patrons is normally very quick. In addition, Domino’s has an extensive home delivery service which has experienced a surge in demand in response to lockdown restrictions.

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

I am attracted to ‘Soul Patts’ as a long-term investment. I like its high level of diversification across a broad range of industries, which range from pharmacies and telecommunications to mining and building products.

Soul Patts also keeps plenty of cash on its balance sheet. This places it in a strong position to capitalise on any investment opportunities that crop up. On the flip side, this cash can be used as a buffer in difficult operating times, such as those faced now.

Soul Patts funds its dividends from the cash it receives from its investment portfolio. The company expects this to be in line with the previous year, supporting its ability to maintain its stellar dividend record and pay a growing dividend in FY20.

More reading

• These ASX shares are set to get a big boost from the next big government stimulus
• These 5 ASX 200 shares were last week’s biggest winners
• Top brokers are urging you to buy these ASX shares today
• Leading brokers name 3 ASX 200 shares to buy right now
• The latest ASX 200 stocks to be upgraded by top brokers

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

The post 3 leading ASX 200 shares to buy for market-beating returns appeared first on Motley Fool Australia.

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Recently, as we start each week afresh, I’ve been drawing inspiration from the great investor, Warren Buffett. As you are no doubt already aware, Buffett is the Chair and CEO of Berkshire Hathaway Inc. (NYSE: BRK.A) (NYSE: BRK.B) and arguably the world’s most successful investor. Our Motley Fool colleagues over in the United States have put together a comprehensive list of Buffett’s best quotes, which you should definitely check out when you have time.

But here are 3 quotes that I think have particular wisdom worth absorbing this week!

“For the investor, a too-high purchase price for the stock of an excellent company can undo the effects of a subsequent decade of favourable business developments”

Here Buffett is warning about the dangers of assuming you can pay any price for a top-notch company. I believe investors often fall into this trap. When they see a company that is growing fast, they figure it’s better to buy the overvalued shares than miss out entirely. In my opinion, we have seen this play out recently with WAAAX shares like Afterpay Ltd (ASX: APT) and Xero Limited (ASX: XRO). While buying into a winning company can feel good for a while, Buffett is warning that paying an overinflated price can lead to a path of wealth destruction in the end.

“The key to investing is not assessing how much an industry is going to affect society, or how much it will grow, but rather determining the competitive advantage of any given company and, above all, the durability of that advantage”

This Warren Buffet quote is a great lesson for us all to keep in mind. Some investors often assume that just because a company is a ‘disruptor’, this automatically makes it a good investment. Disrupting an industry can be a winning strategy, but only if the company is able to hold on to its ‘moat’, or competitive advantage.

Just take Nokia, for example. This company pioneered mobile phones back in the day, but today is not really around to keep extracting its share of the spoils. That honour belongs to the likes of Apple, Alphabet and Samsung. These are all companies that could do what Nokia did, only better. No wonder Warren Buffett owns shares of Apple.

“Predicting rain doesn’t count, building the ark does”

I think this Warren Buffett quote is particularly relevant in 2020. This is a year that has already brought unprecedented volatility to our share market. There’s always a conga-line of doomsayers ready to tell you when the next share market crash or recession is about to hit. As Buffett also espouses, however, it doesn’t matter how right they are, but how you prepare for it. Remember, even a broken clock is right twice a day! 

Foolish takeaway

Recessions and market crashes have often resulted in Warren Buffett becoming richer. Now that’s something I think we could all draw inspiration from in the current climate. 

More reading

• Why the Zip Co share price rocketed 57% higher in May
• This ASX fintech share is up 489% since March
• Why Nearmap’s share price surged by 50% in May
• Openpay share price surges 29% higher after BNPL provider reports record month
• Real wealth from 3 roaring mid caps in May

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Sebastian Bowen owns shares of Alphabet (A shares). The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares) and 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 owns shares of AFTERPAY T FPO and Xero. The Motley Fool Australia has recommended Alphabet (A shares) and 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.

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Australia has a vibrant and fast-growing small cap ASX tech sector. Here’s a closer look at 5 small cap ASX tech shares that saw stellar share price growth of between 30% and 70% during May.

Pushpay Holdings Ltd (ASX: PPH)

Pushpay is a donor management platform provider for faith and not-for-profit sectors. The company operates in the large-to-medium church sector of the US market.

Pushpay’s growth has been strong over the past few years. Recently, the company indicated that further high growth is predicted for FY 2021.

May was a particularly strong month, with the Pushpay share price up by a massive 69%. Demand for its platform has recently accelerated, due to closure of many churches across the US.

Redbubble Ltd (ASX: RBL)

Redbubble owns and operates leading global marketplaces for independent artists. In a market update back in April, Redbubble revealed it believes that it is well placed to endure through the coronavirus outbreak.

Redbubble also reported that it remains in a strong financial position and its operations and supply chain remain resilient.

The Redbubble share price soared 57% in May, which follows a share price rally that began in late March.

Tyro Payments Ltd (ASX: TYR)

Tyro provides Australian businesses with payment solutions for credit and debit card transactions. As such, Tyro is set to benefit from the easing of lockdown restrictions in Australia.

Renewed optimism in the reopening of the Australian economy helped to see its share price rise by 32% during May.

A series of positive market updates during May also indicated that Tyro’s transaction values have continued to improve.

Data#3 Limited (ASX: DTL)

Data#3 is an Australian ICT provider that provides a range of technology solutions. These include cloud and data centre services, mobility, security and data and analytics solutions.

An April market update revealed that there had been no significant impact on its business operations due to the pandemic. The company is also so far on track to meet its full year financial year objectives.

Its share price rose strongly by 37% during May. I believe that this strong growth was driven in particular by growing demand for cloud and data centre solutions, because remote working has increased during the pandemic.

EML Payments Ltd (ASX: EML)

EML Payments is an electronics technology solutions provider for gift cards and pre-paid cards.

Prior to the coronavirus crisis, it had been growing strongly for several years.

Its share price was hit hard in the early part of the crisis, however EML shares have since bounced back strongly.

May was a particularly strong month, with the EML share price rising by 30%. Investors appear to be encouraged by the easing of lockdown restrictions. This should see demand for its services begin to get back to normal.

More reading

• Why Nearmap’s share price surged by 50% in May
• Top ASX Stock Picks for June 2020
• 10 top ASX growth shares to buy in June for strong returns
• How to make $1,000 a month in dividends
• Build wealth for life with these 2 ASX 200 shares

Phil Harpur has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Emerchants Limited and Tyro Payments. The Motley Fool Australia owns shares of and has recommended PUSHPAY FPO NZX. The Motley Fool Australia has recommended Data#3 Ltd., Emerchants Limited, and REDBUBBLE 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 These 5 exciting small cap ASX tech shares rose by up to 70% in May appeared first on Motley Fool Australia.

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I don’t normally buy exchange traded funds (ETFs) for my portfolio, but there are a few that I definitely would.

If you’re wanting to be passive with your Australian investing, or you don’t have much ASX exposure, then Vanguard Australian Shares Index ETF (ASX: VAS) and BetaShares Australia 200 ETF (ASX: A200) wouldn’t be bad options.

But I’m not a fan of the ASX index. It’s dominated by resource shares such as BHP Group Ltd (ASX: BHP) and banks like Westpac Banking Corp (ASX: WBC). These are very big, mature businesses that will find it hard to grow revenue meaningfully over the long-term.

However, there are some ETFs that I think provide very compelling growth that I’d happily buy:

BetaShares NASDAQ 100 ETF (ASX: NDQ)

When you think about what makes some of the best investments, you could list a few key attributes. Capital light, high profit margins, effective management, strong balance sheets, powerful economic moats and a long growth runway.

This description would describe many of the biggest businesses on the NASDAQ. Microsoft, Apple, Alphabet, Facebook, Amazon and so on. These businesses have almost unassailable business positions in their respective arenas. The only main competition is each other.

Cloud computing has a huge future. Digital media is the way forward. Technology is more important than ever in this coronavirus era. And so on. 

There are a few quality smaller technology shares on the ASX, but there’s nothing like the large cap quality seen within this ETF. The fact that it comes with an annual management fee that’s less than half the typical 1% annual fund management fee is also very attractive.

Since inception in May 2015, it has generated an average return per annum (after fees) of 19.75%.

BetaShares Asia Technology Tigers ETF (ASX: ASIA)

The US isn’t the only place where there are large, powerful technology businesses. Asia is another hub of strong tech shares to consider.

There is a huge amount of Asian consumers that use technology in all areas of their life. The world’s wealth is slowly shifting in favour of the Asian middle class, which is really benefiting the tech businesses that operate there.

Within the ETF are powerhouses like Alibaba, Tencent, Taiwan Semiconductor Manufacturing and Samsung. There are plenty of other big names like JD.com, Infosys, Baidu and Xiaomi.

The trade war and the coronavirus pandemic have not been helpful for Asian share valuations over the past couple of years. Even so, this investment has still managed average returns per annum (after fees) of 13.6% since inception in September 2018. That type of return could continue with how profitable these businesses are. 

Foolish takeaway

I think Aussie investors would be well served to be indirectly invested in some of the world’s best technology shares through these two ETFs. I’d probably prefer owning the NASDAQ because the underlying earnings are more global. But the Asian one could be a very good performer, you just have to think about the potential China risks.

More reading

• Where to invest $10,000 into ASX shares immediately
• How bankable are the big four ASX bank shares in 2020?
• 3 best stocks for ASX 200 investors in retirement to buy now
• Why ASX iron ore miners may outperform this morning
• ASX 200 Weekly Wrap: Surging bank shares push ASX toward 6,000

Motley Fool contributor Tristan Harrison 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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June is now officially upon us – along with moons, Ferris wheels and that dizzy, dancing way you feel.

With a new season comes a fresh opportunity to examine our share portfolios. And for ASX dividend investors, this couldn’t come with more importance. ASX dividend shares haven’t delivered a lot of confidence to investors in 2020 so far. The big 4 ASX banks have mostly quarantined their dividend payments – along with many other ASX blue-chip shares.

I’ve already pontificated about 3 ASX dividend shares you can buy this month, but here are another 5 winning ASX shares for your consideration today.

Rural Funds Group (ASX: RFF)

Rural Funds used to be a favourite of ASX dividend investors. That was before a short-seller attack last year that smashed the company’s share price into oblivion. It still hasn’t recovered to its past highs, despite claiming vindication from the allegations levied against it.

But that’s exactly why I think this agricultural land leaser is a top buy today. At the time of writing, its shares are offering a yield Elon Musk would be proud of – 4.20%. Rural Funds Group aims to increase this yield by 4% every year as well.

Telstra Corporation Ltd (ASX: TLS)

Telstra is another top ASX dividend share investors should consider this June. The telco giant has shown no explicit signs that its 16 cents per share dividend won’t be continued in 2020 – which would give Telstra shares a yield of 4.94% on current prices.

Telstra’s defensive qualities, as well as its investment in 5G technology, make this another top ASX dividend share to buy this month in my opinion.

Fortescue Metals Group Limited (ASX: FMG)

Fortescue Metals has been one of the best companies to own in 2020 so far. Not only do Fortescue shares offer a fully franked trailing yield of 6.82%, but the shares have also been breaking new all-time highs over the past few weeks. Another one was reached just today of $14.72.

As long as iron ore prices stay near their current levels around US$100 a tonne, I believe Fortescue should be able to shower its shareholders with dividend income this year – and thus, should be a handy share to have in your dividend stable.

Amcor PLC (ASX: AMC)

Amcor is a manufacturer of packaging – mostly of the cardboard box and plastic variety. This might be viewed as a ‘boring’ ASX dividend share by some investors – but in this case, boring means ‘defensive’ and ‘reliable’. Even though Amcor shares are up close to 50% on their March lows, the company is still offering a dividend yield of 2.52% on current prices.

Coles Group Ltd (ASX: COL)

Our final dividend pick today is Coles Group. Coles is one of the most defensive and reliable dividend payers on the ASX in my opinion. Its ‘recession-proof’ business is a handy one to have in an ASX dividend portfolio in these uncertain times – and is one we all saw the merits of back in February and March.

On current prices, Coles shares are offering a fully franked, trailing yield of 3.52%.

More reading

• How our richest Australians are getting richer
• Why Austal, CSL, Fortescue, & Star shares are charging higher today
• 3 top ASX dividend shares to buy now
• Is the Woolworths share price cheap today?
• 3 very reliable dividend shares to buy for income

Motley Fool contributor Sebastian Bowen owns shares of Telstra Limited. The Motley Fool Australia owns shares of and has recommended Amcor Limited, RURALFUNDS STAPLED, and Telstra Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET. 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 (Index:^AXJO) is extending its bull run today as investors continue to pile back into equities best placed in the post-coronavirus economic recovery.

While value buys are getting increasingly hard to find after the near 30% bounce in the market since the low point of the COVID-19 bear market, there’s still a good handful of ASX shares that have room to run higher.

Here are the three latest buy-ideas from top brokers.

Appetite for a big upside

The first is Freedom Foods Group Ltd (ASX: FNP) with Goldman Sachs reiterating its “buy” recommendation on the stock, which also happens to be on its “conviction” list.

This is despite the group’s latest warning that its second half earnings before interest, tax, depreciation and amortisation (EBITDA) would take a big hit.

A number of one-off blows from the COVID-19 pandemic is behind the bad news, including the shutdown of its OOH and Foodservice channels, a $4 million bad debt provisioning and a $5 million restructuring charge.

“We are confident the broader strategy anchored around nutritional dairy and plant based beverages remains on track,” said the broker.

“We don’t see FNP needing to raise capital in the short term despite elevated leverage…[and] expect earnings to grow significantly in FY21.”

Goldman’s price target on the stock is $5.75 a share, or a 64% upside to the current share price.

Best leverage to rebounding oil price

The dramatic rebound in the oil price may have put a rocket under the Santos Ltd (ASX: STO) share price recently, but Credit Suisse thinks there’s more room to zoom.

The commodity bounced from a negative US$30+ a barrel to around US$35 a barrel, and the recovery bodes well for Santos’ two growth projects Dorado and Barossa.

Credit Suisse believes the breakeven for Dorado is as low around circa US$30 a barrel and that Santos will give the final green light to start on the Barossa project.

“We see STO in the wake of COVID-19 sell-off as potentially more leveraged to an oil recovery over the coming 18 months vs peers,” said the broker.

“Most of STO’s growth should readily return as the market recovers, and STO has leverage to long-term oil price assumptions should they return to pre-COVID-19 levels.”

Credit Suisse rates the stock as “outperform” with price target of $6.61 a share.

Worth more than originally thought

Finally, Morgan Stanley upgraded its earnings forecasts for auto parts group Bapcor Ltd (ASX: BAP) and reiterated its “overweight” recommendation on the stock.

“During lockdown we estimate industry sales were down >25% yoy in Australia and more like 85% in NZ,” said the broker.

“Our numbers previously baked in longer duration closures and a more measured ramp up. We now essentially see that pulled forward resulting in a 32% upgrade to FY21e EPS and 10% in FY22e.”

The broker lifted its price target on Bapcor to $7.20 from $6 a share, which suggests a 23% upside for the stock.

More reading

• Leading brokers name 3 ASX 200 shares to buy right now
• The latest ASX 200 stocks to be upgraded by top brokers
• How bankable are the big four ASX bank shares in 2020?
• Why Nearmap’s share price surged by 50% in May
• Why a2 Milk, Freedom Foods, Scentre, & TPG Telecom are dropping lower

Motley Fool contributor Brendon Lau 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 Freedom Foods 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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