Tag: Motley Fool Australia

Over the past week, the S&P/ASX 200 Index (ASX: XJO) rose 4.7%, making it one of the best weeks of the calendar year so far. There were several double-digit ASX 200 winners last week.

The market was led early in the week by optimism about the loosening of pandemic restrictions. ASX travel and tourism shares led early in the week. The major ASX bank shares led throughout the week with some minor profit-taking on Friday.

This is against a backdrop of continuing international tensions and warnings that Western Australia is headed into a recession. Unrest in Hong Kong likely worked to weigh the market down towards the end of the week.

5 ASX 200 winners

Overall, the market started to price in a return to normalcy across several sectors. While still fragile, I believe this trend is likely to continue over the coming weeks. Albeit with a few minor stumbles along the way.

Mid-cap ASX bank share Virgin Money UK (ASX: VUK) was one of the largest ASX 200 winners last week. The company’s share price rose by 20.73% across the week from Monday’s open, carried upwards by the rally in ASX banking shares across the board. Of the banking majors, the Australia and New Zealand Banking GrpLtd (ASX: ANZ) share price rose the most at 16.17%. 

The Austal Limited (ASX: ASB) share price rose by 19.29% over the week. The shipbuilder announced on Friday that it was increasing its full-year earnings guidance. Austal is still trading below its 10-year average price-to-earnings ratio.

The Kogan.com Ltd (ASX: KGN) share price rose by 15.42% this week. Across the month of May, the Kogan share price shot up by an impressive 40.55%. On 15 May, the company announced it had purchased furniture outlet Matt Blatt. 

Finally, the Flight Centre Travel Group Ltd (ASX: FLT) share price rose by 13.74% over the course of the week. Over May, the company’s share price has jumped by 19.02%.

ASX decliners

Unlike the ASX 200 winners, large scale decliners were not common. The market appeared to decline generally across Thursday and Friday in response to global tensions. 

One of the few ASX shares to decline by double figures was Freedom Foods Group Ltd (ASX: FNP). The company’s share price fell by 11.64% from Monday’s open, predominantly on Friday. This was in response to an announcement of falls across its revenue channels during the COVID-19 lockdown.

Saracen Mineral Holdings Limited (ASX: SAR) fell by 7.43% over the week, likely due to profit-taking in the gold mining sector. Falls in the AUD gold price have been due to the rising Australian dollar. The US gold price remains at near record-high levels. 

Healthcare giant and the ASX’s reigning largest company, CSL Limited (ASX: CSL), saw its share price fall by 6.74% from Monday’s opening price. With a very well-received presentation on future strategic direction, the company slumped on profit-taking on Thursday and Friday.

More reading

• 3 top ASX dividend shares to buy now
• 3 ASX 200 shares to watch this week
• Is the Woolworths share price cheap today?
• Why these ASX retail shares surged over 25% in the past 2 weeks
• Why ASX iron ore miners may outperform this morning

Daryl Mather owns shares of Austal Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Austal Limited and CSL Ltd. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd. The Motley Fool Australia has recommended Flight Centre Travel Group Limited and 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.

The post 5 ASX 200 winners and 3 losers from last week appeared first on Motley Fool Australia.

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Our market is likely to drop this morning but there’s one group of ASX stocks that are poised to buck the downtrend.

The futures market is predicting a 0.4% fall in the S&P/ASX 200 Index (Index:^AXJO) as unbridled  violence in the US, geopolitical tensions with China and the ongoing COVID-19 pandemic takes the wind out of our sails.

The thin silver lining to the global coronavirus outbreak is that it’s pushed the iron ore price to over US$100 a tonne on the weekend.

Can bulls fly?

This might be enough to see the BHP Group Ltd (ASX: BHP) share price, Rio Tinto Limited (ASX: RIO) share price and Fortescue Metals Group Limited (ASX: FMG) share price jumping higher when the market opens.

I say “might” because there are doubts that the commodity bull run may be very short lived and that prices could start correcting as soon as next month. I wonder what is the reverse analogy of a “dead cat bounce”? Maybe “bulls growing wings”?

But the uncertain outlook hasn’t stopped the iron ore benchmark from jumping to US$101.05, according to Bloomberg.

Why iron ore miners may outperform still

Our biggest iron ore rival, Brazil, is quickly becoming the epicentre of the COVID-19 crisis as it recorded another surge in new infections.

This is anticipated to cause major disruption to ore exports from that country with Vale SA downgrading its full year shipment forecast for the commodity in April.

At the same time, China’s industries are reopening as the country overcomes the pandemic. This is driving up demand for the steel-making ingredient.

Chinese stimulus

Chinese leaders have also announced a 3.6 trillion yuan ($760 billion) stimulus package to help pull its economy out of the coronavirus rut.

While the package was smaller than what the market was hoping for, it will still bolster infrastructure construction – a key driver for iron ore demand.

The Chinese government said expenditure on investment projects will rise by 22.4 billion yuan this calendar year to 600 billion yuan.

Is a market correction looming?

However, this isn’t enough to stop some experts from predicting a downturn in the iron ore price in the second half of 2020 after it hit its highest level since August last year.

Bloomberg Intelligence expects a 34-million-ton surplus in the second half on higher supply and stagnating demand, compared to a 25-million-ton deficit in the first half.

Other experts like Credit Suisse have also warned that we are currently in “peak tightness” and that rising output from Brazil and Australia will ease the shortage in July or August.

Foolish takeaway

On the other hand, it’s hard to predict what impact the COVID-19 fallout will have on Brazil over the coming weeks or months.

There’s also the belief that China will inject another round (or three) of stimulus if its economy starts to sputter – whether from the pandemic, the trade war with the US, or both.

More reading

• ASX 200 Weekly Wrap: Surging bank shares push ASX toward 6,000
• 5 things to watch on the ASX 200 on Monday
• ASX investors brace to ride the next wave of “irrational exuberance”
• These were the best performing ASX 200 shares in May
• Buy these quality ASX dividend shares next week

Motley Fool contributor Brendon Lau owns shares of BHP Billiton Limited and Rio Tinto Ltd. 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 Why ASX iron ore miners may outperform this morning appeared first on Motley Fool Australia.

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The S&P/ASX 200 Index (ASX: XJO) has banked yet another week of gains, pushing 4.7% higher last week to end at 5,755.7 points.

I say ‘banked’ partly because it was the ASX big 4 banks that were the stars of the week (and who doesn’t love a bad pun!). All 4 banks experienced massive buying pressure throughout the week, which helped push the ASX 200 to its highest levels since early March and tantalisingly close to the psychologically-important 6,000 point level.

Further easing of coronavirus restrictions, as well as positive comments from the Reserve Bank of Australia (RBA) governor Philip Lowe during the week, bolstered investors’ confidence in the health of the Australian economy. This, in turn, flowed through to ASX 200 shares.

Banks star in the ASX 200 show

But perhaps no sector benefitted more than the ASX 200 banks. Generally speaking, the banks are viewed as proxies for the general health of the economy. That’s probably the reason all 4 of the majors saw such a brutal sell-off in March when the extent of the coronavirus pandemic was becoming clear.

And it’s also likely behind the dramatic shift in sentiment we saw last week.

The ‘big one’ Commonwealth Bank of Australia (ASX: CBA) saw the most muted gains last week, starting off Monday at $58.70 per share before finishing up on Friday at $63.75 – an 8.6% swing.

Westpac Banking Corp (ASX: WBC) faired far better. Westpac shares were languishing at $15.01 on Monday morning but finished up on Friday at $17.22 – banking a 14.72% pop.

National Australia Bank Ltd. (ASX: NAB) did one better again. It started Monday at $15.34 per share and ended Friday at $17.81 – a 16.1% surge.

But it was Australia and New Zealand Banking Group Limited (ASX: ANZ) which claimed the banking crown and saw a 17.47% rise after starting off Monday at $15.23 per share and finishing on Friday at $17.89.

The big 4 banks are major constituents of the ASX 200, which means their moves have a heavy impact on the direction of the index as a whole. As such, we can mostly thank the banks for last week’s gains – although they weren’t the only ones popping the champagne.

How did the markets end the week?

As discussed, the ASX 200 was a very happy camper last week. It started Monday on 5,497 points and ended up at 5,755.7 points – putting the week’s gains at 4.7% overall.

Monday saw a healthy 2.2% gain, which was raised by Tuesday’s 2.9% surge. Wednesday saw some consolidation with a 0.1% loss, but then it was back on Thursday with another 1.3% gain.

By Friday, it was clear investors might have gotten a little too excited, and the ASX 200 fell back 1.6% for the day. But it wasn’t enough to overcome the rampaging bullish sentiment earlier in the week and left the ASX 200 with its hefty 4.7% gain for the week.

Meanwhile, the All Ordinaries (INDEXASX: XAO) was also on fire, rising from 5,608.8 points to 5,872.2 points to bring home a 4.7% gain for the week.

Which ASX 200 shares were the biggest winners and losers?

It’s ‘gossip pages’ time, Foolish style – so let’s see which ASX 200 shares were the week’s biggest winners and losers. As always, let’s start with the losers!

Worst ASX 200 losers	% loss for the week
Technology One Ltd (ASX: TNE)	7.77%
Worley Ltd (ASX: WOR)	7.18%
Saracen Mineral Holdings Limited (ASX: SAR)	5.37%
CSL Limited (ASX: CSL)	5.06%

Taking out the wooden spoon last week was Technology One, a software company that has been trending steadily lower ever since releasing its half-year results a fortnight ago. It was unfortunate to also see a bearish broker’s recommendation last week, which seemed to add to investors’ concerns.

Saracen Minerals was another loser. Most ASX 200 gold miners were sold off last week as the price of the yellow metal lost some steam after rallying hard earlier in May. Saracen took the cake with its 5.37% loss though.

A shoutout has to go to CSL as well, a rare participant in the ASX 200 losers column. CSL shares have been losing steam ever since topping $330 per share back in mid-April. It seems investors have finally realised this company may have been overbought and sent the shares back down closer to earth this week. This is coincidentally getting pretty close to the lows we saw in mid-March.

Now the losers are out sight and mind, let’s take a look at the ASX 200 stars of the week:

Best ASX 200 gainers	% gain for the week
Southern Cross Media Group Ltd (ASX: SXL)	71.43%
Virgin Money UK (ASX: VUK)	22.45%
Boral Limited (ASX: BLD)	21.01%
Austal Limited (ASX: ASB)	20.14%

You would think at least one of the major banks would have made the list this week, but alas!

Instead, we have Southern Cross Media taking out the top spot. Southern Cross has been in the ASX 200 winners or losers column more times than not over the past 2 months. It seems to be in a love-hate relationship with its investors.

Southern Cross shares were up an eye-popping 71.43% this week, even though there was no real news out of the company. It seems punters just flicked the ‘risk-on’ switch with this one in a big way.

Although it’s not one of the big 4, NAB’s old flame Virgin Money UK (formerly Clydesdale Bank) came in second with a 22.45% gain (and that’s after a 10.45% loss on Friday). This stock was one of the most beaten-down banking shares on the ASX during the March trough, so it’s a surprise to see sentiment restored so powerfully.

The ‘risk-on’ trend can also be seen in the highly cyclical Boral and Austal as well.

What is this week looking like for the ASX 200?

It will be very interesting to see if the ASX 200 continues either the negativity we saw on Friday or the positivity we saw earlier last week as we start another 5 days of trading.

Coronavirus restrictions continue to be lifted across the country, which should provide a base of positive sentiment. We also have an RBA meeting on Tuesday that will determine whether the cash rate stays at 0.25% or is cut to zero. Expect some share market volatility on Tuesday either way!

On the other hand, we have seen international political tensions continue to rise over the past week, which could put a dampener on ASX 200 bulls. In particular, we have seen rising violence in the United States in recent days as well as continuing tensions between the US, Hong Kong and China.

Before we go, here’s how the ASX 200 blue chips are looking as we start a new week.

•     S&P/ASX 200 (XJO) at 5,755.7 points
•     ALL ORDINARIES (XAO) at 5,872.2 points
•     Dow Jones Industrial Average at 25,383.11 points
•     Gold (Spot) swapping hands for US$1,740.25 per troy ounce
•     Iron ore asking US$99.73 per tonne
•     Crude oil (Brent) trading at US$37.84 per barrel
•     Crude oil (WTI) going for US$35.49 per barrel
•     Australian dollar buying 66.67 US cents
•    10-year Australian Government bonds yielding 0.90% per annum

Foolish takeaway

Last week delivered some startling share price movements, none more so than the big ASX banks. Whether this sentiment holds this week will be a crucial test for the ASX 200, especially considering that elusive 6,000-point threshold is now within sight.

Keep an eye both on Australia and the rest of the world this week Fools, both spheres have make or break potential over the ASX’s momentum.

Otherwise, as always, stay safe, stay rational and stay Foolish!

More reading

• Why ASX iron ore miners may outperform this morning
• Here’s how ANZ, CBA, NAB, & Westpac performed in May
• Why I would buy CBA and these ASX dividend shares right now
• 5 things to watch on the ASX 200 on Monday
• Top ASX Stock Picks for June 2020

Sebastian Bowen owns shares of National Australia Bank Limited, Newcrest Mining Limited, and Telstra Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Austal Limited and CSL Ltd. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited and Telstra Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET, Transurban Group, Wesfarmers Limited, and Woolworths 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 ASX 200 Weekly Wrap: Surging bank shares push ASX toward 6,000 appeared first on Motley Fool Australia.

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The big four banks were on form in May and played a key role in driving the S&P/ASX 200 Index (ASX: XJO) higher over the period.

Here’s a snapshot of how the big four banks performed last month:

Australia and New Zealand Banking Group (ASX: ANZ)

The ANZ share price recorded a gain of 5.85% last month. All of this gain came in the final week of May after investors started to pile into the banks again. With the economy opening up quicker than many expected and government stimulus appearing to be working very well, investors may believe the banks have been oversold. This could also mean that ANZ has overestimated its COVID-19 impacts of $1.031 billion.

Commonwealth Bank of Australia (ASX: CBA)

The CBA share price was a comparatively poor performer in May with a gain of just 1.7%. During the month Australia’s largest bank released its third quarter update. For the three months, CBA’s cash net profit from continuing operations came in at approximately $1.3 billion. This was a 41% reduction on the average quarterly cash net profit it achieved in the first half. This was driven largely by remediation charges and COVID-19 provisions. The bank made an additional credit provision of $1.5 billion for the potential longer term impacts of COVID-19.

National Australia Bank Ltd (ASX: NAB)

The NAB share price pushed a sizeable 5% higher last month. Once again, it appears as though investors believe that its shares were oversold during the pandemic. This was good news for shareholders who took part in the bank’s share purchase plan (SPP). The bank increased the SPP materially to $1,250 million and raised the funds at an issue price of $14.15 per new share. NAB’s shares finished the month almost 26% higher than the SPP price.

Westpac Banking Corp (ASX: WBC) 

The Westpac share price was on form in May and pushed 5.8% higher. This also appears to have been driven by bargain hunters swooping in at the end of the month on the belief that things will not be as bad as first feared. Earlier this year Westpac announced approximately $1.6 billion of additional impairment charges predominantly related to COVID-19 impacts. If things turn out better than expected, some of these provisions could be reversed. Which would be a positive for future dividend payments.

More reading

• ASX 200 Weekly Wrap: Surging bank shares push ASX toward 6,000
• Why I would buy CBA and these ASX dividend shares right now
• 2 quality ASX shares to buy for long-term growth
• What to watch on the ASX 200 next week
• Beat low interest rates with these ASX dividend shares

Motley Fool contributor James Mickleboro owns shares of Westpac Banking. 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 Here’s how ANZ, CBA, NAB, & Westpac performed in May appeared first on Motley Fool Australia.

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One of the best performers on the S&P/ASX 200 Index (ASX: XJO) last month was the Webjet Limited (ASX: WEB) share price.

Over the month of May the online travel agent’s shares rallied just over 35% higher.

This means they are now up 84% since hitting a multi-year low of $2.25 in April.

Why did Webjet’s shares rocket higher in May?

Investors were scrambling to buy travel shares such as Webjet and Flight Centre Travel Group Ltd (ASX: FLT) last month on the belief that domestic travel markets may recover sooner than expected.

This is the result of Australia’s low coronavirus infection rate following successful lockdowns and social distancing initiatives.

Given how both Webjet and Flight Centre are burning through cash at the moment, this is a big positive. Particularly for Webjet’s B2C business which is mainly exposed to the domestic travel market.

Also getting investors excited was the prospect of a COVID-19 vaccine being developed in the coming months.

In the middle of May, American biotechnology company Moderna released phase one trial results for its vaccine candidate, mRNA-1273.

These results were very promising and Moderna is now racing to get a phase 3 trial undertaken in July. If everything goes to plan, we could have a vaccine before the end of the year.

Once again, this would be far sooner than anyone expected and could be the key to opening up international borders. This would be another big positive for Webjet and the rest of the industry.

Is it too late to buy Webjet shares?

Unfortunately, I think it is far too late to be buying Webjet shares now. While the company may come out of the pandemic in a stronger market position, I think this is already reflected in its share price.

Furthermore, it is worth remembering that shareholders have been diluted materially by its recent capital raising. This means that although they have fallen materially this year, its shares are not as cheap as you might first think.

In FY 2019 Webjet delivered a net profit of $60.3 million. With its market capitalisation now at $1.4 billion, this means Webjet’s shares are changing hands at 23x FY 2019 earnings.

However, I’m not convinced Webjet will achieve another profit of that level again until maybe as late as FY 2023.

As a result, I think its shares are very expensive at 23x estimated FY 2023 earnings and feel better value options are available elsewhere.

More reading

• These were the best performing ASX 200 shares in May
• ASX retail shares best placed to benefit from wall of industry bankruptcies
• Why ASX 200 travel shares are soaring higher today
• ASX 200 rallies hard, no longer in bear territory
• Latest spending data could drive the ASX retail sector higher

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. The Motley Fool Australia has recommended Flight Centre Travel 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.

The post The Webjet share price jumped 35% in May: Is it too late to invest? appeared first on Motley Fool Australia.

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With interest rates at ultra low levels and unlikely to improve any time soon, it is becoming nearly impossible for investors to generate a sufficient income from term deposits and savings accounts.

But never fear! The Australian share market is home to a large number of quality dividend shares that offer vastly superior yields.

Three such ASX dividend shares are listed below. Here’s why I think they are great options for income investors:

BWP Trust (ASX: BWP)

The first ASX dividend share to consider is BWP. I believe the real estate investment trust is well-positioned to deliver consistent income and distribution growth over the next decade. This is thanks to its high quality commercial assets which are predominantly leased to home improvement giant, Bunnings Warehouse. I believe Bunnings is one of the best retailers in the country and the risk of store closures and rental defaults is very low. At present I estimate that its units offer a forward 4.8% yield.

Commonwealth Bank of Australia (ASX: CBA)

If you don’t already have exposure to the banking sector, then I think Commonwealth Bank would be a good dividend share to buy. I believe it is the best option in the sector due to the quality of its business, brand, and balance sheet. And while trading conditions are tough now, I expect these headwinds to ease in the coming months. So, with its shares still down materially from their high, now could be an opportune time to make a long term investment. I estimate that its shares offer a fully franked 5.8% FY 2021 dividend yield.

Dicker Data Ltd (ASX: DDR)

A final ASX dividend share to consider buying is Dicker Data. It is a distributor of computer hardware and software products across Australia. The company has been growing its earnings and dividend at a consistently solid rate for many years. The good news is that this positive trend looks set to continue thanks to new vendor agreements and strong demand. This year the Dicker Data board intends to lift its dividend by 31% to 35.5 cents per share. This represents a 4.5% fully franked dividend yield.

More reading

• Buy these quality ASX dividend shares next week
• 2 quality ASX shares to buy for long-term growth
• Beat low interest rates with these ASX dividend shares
• 2 ASX shares to buy for strong retirement income
• Fund managers have been buying these ASX 200 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 CBA and these ASX dividend shares right now appeared first on Motley Fool Australia.

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Every Monday I like to look at ASIC’s short position report in order to find out which shares are being targeted by short sellers.

This is because I believe it is worth keeping a close eye on short interest levels as high levels can sometimes be a sign that something isn’t quite right with a company.

With that in mind, here are the 10 most shorted shares on the ASX this week according to ASIC:

• Myer Holdings Ltd (ASX: MYR) remains the most shorted share on the ASX despite a reduction in its short interest to 13.9%. Short sellers may believe the pandemic has accelerated the structural decline of department stores.
• Speedcast International Ltd (ASX: SDA) has short interest of 12.7%. Speedcast is a communications satellite technology provider which has been suspended for several months. It is currently in the process of declaring itself bankrupt.
• Galaxy Resources Limited (ASX: GXY) has seen its short interest remain flat at 12.5%. Galaxy is one of a number of lithium miners which are under pressure due to a material weakness in lithium prices.
• Orocobre Limited (ASX: ORE) has seen its short interest rise to 11.4%. Orocobre is another lithium miner which short sellers have their eyes on. Especially given concerns that a recovery in lithium prices could be delayed by the pandemic.
• Super Retail Group Ltd (ASX: SUL) has seen its short interest jump to 10.9%. Short sellers appear concerned that some of Super Retail’s businesses may struggle because of the pandemic.
• Pilbara Mineral Ltd (ASX: PLS) has short interest of 9.3%, which is down slightly week on week. Pilbara Minerals is the final lithium miner in the list. Despite falling heavily over the last 12 months, short sellers must believe its shares can go even lower.
• JB Hi-Fi Limited (ASX: JBH) has seen its short interest remain flat week on week at 9.3%. Some short sellers continue to target the retailer despite its solid sales performance during the pandemic.
• Nearmap Ltd (ASX: NEA) is back in the top ten with short interest of 9.1%. Short sellers may regret this one. Last week the aerial imagery technology company’s shares rocketed higher after it provided a solid market update.
• Clinuvel Pharmaceuticals Limited (ASX: CUV) has seen its short interest slide to 9.1%. Short sellers appear concerned over the valuation of the biopharmaceutical company’s shares.
• Inghams Group Ltd (ASX: ING) has short interest of 8.9%, which is up slightly week on week again. The poultry company has had a tough 12 months because of the droughts and pandemic. Some short sellers appear to believe the tough times are here to stay.

More reading

• These were the best performing ASX 200 shares in May
• 3 exciting ASX growth shares to buy next week
• ASX retail shares best placed to benefit from wall of industry bankruptcies
• 2 ASX shares to watch as sport returns
• Top brokers name 3 ASX shares to buy next week

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Nearmap Ltd. and Super Retail 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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I think that teenagers can beat the share pros at investing.  

That’s not to say a teen just out of school can whip up an incredible discounted cashflow model for the best growth shares.

I just mean that it’s possible for a teenager’s portfolio to generate returns as good as, if not better, than a share investment pro (after fees).

There are some factors that you can point to which give regular investors an advantage. They can more easily invest for the longer-term. Fund managers are commonly judged by their short-term returns. Regular investors can also make unique investment choices. 

How teenagers can match the investment returns of the share pros

I think a key fact is that regular investors can invest in exchange-traded funds (ETFs) that are based on an index. The whole point of an investment manager is to invest differently to the index. But the ETF is just following the returns of an index. An index is just a predetermined collection of businesses. Both the Australian share market and the US share market have produced very solid returns over the years.

A high percentage of share pros don’t outperform their respective benchmarks each year in both the US and Australia. Particularly when fees are taken into account. There are a few managers out there that I think are worthwhile, but plenty of others are just broadly following the index whilst taking hefty fees.

So if a teenager were just to invest in index-based ETFs then they would likely outperform a large number of share pros, with no investment skill required. Sounds easy, right?

What ETFs would make good options for teenagers? I like the US-focused iShares S&P 500 ETF (ASX: IVV), the Australian-focused Vanguard Australian Shares Index ETF (ASX: VAS) and the global-focused Vanguard MSCI Index International Shares ETF (ASX: VGS).

More reading

• This one super fund fix could save you thousands!
• How to make $1,000 a month in dividends
• How I would build a $100,000 ASX portfolio with ETFs
• Why it could be the perfect time to buy this Vanguard ETF
• Buy these 4 ASX shares to diversify your portfolio

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

The post How teenagers can beat the share pros at investing appeared first on Motley Fool Australia.

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On Friday the S&P/ASX 200 Index (ASX: XJO) finished a very positive week on a disappointing note. The benchmark index fell 1.6% to 5,755.7 points.

Will the ASX 200 be able to bounce back from this on Monday? Here are five things to watch:

ASX 200 to drop lower.

The ASX 200 looks set to start the week in the red. According to the latest SPI futures, the benchmark index is poised to open the week 24 points or 0.45% lower. This is despite a reasonably positive end to the week on Wall Street. The Dow Jones traded roughly flat, the S&P 500 rose 0.5%, and the Nasdaq index climbed 1.3%.

Oil prices storm higher.

Energy producers including Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) could be on the rise today after oil prices stormed higher on Friday night. According to Bloomberg, the WTI crude oil price jumped 5.3% to US$35.49 a barrel and the Brent crude oil price pushed 5% higher to US$37.84 a barrel. These gains mean that oil prices almost doubled for the month.

Gold price jumps.

Gold miners including Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) could be on the rise today after the gold price pushed higher. According to CNBC, the spot gold price rose 1.35% to US$1,751.70 an ounce. US-China tensions supported demand for the precious metal.

Iron ore miners on watch.

BHP Group Ltd (ASX: BHP), Fortescue Metals Group Limited (ASX: FMG), and Rio Tinto Limited (ASX: RIO) could push higher today after iron ore prices jumped on Friday night. According to Fastmarkets, courtesy of the AFR, the spot iron ore price jumped 5.5% to US$102.39 a tonne. This was driven by concerns that Brazilian supply could be impacted by the coronavirus pandemic.

Austal rated as a buy.

The Austal Limited (ASX: ASB) share price could be going a lot higher from here according to analysts at Goldman Sachs. They have reiterated their conviction buy rating and lifted the price target on the shipbuilder’s shares to $4.08. Goldman is positive on the company due to its multi-year secured backlog of work and potential margin improvement.

More reading

• ASX investors brace to ride the next wave of “irrational exuberance”
• These were the best performing ASX 200 shares in May
• Buy these quality ASX dividend shares next week
• 3 five-star ASX 200 shares to buy in June
• What selling ASX shares means at tax time

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 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.

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

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We asked our Foolish writers to pick their favourite ASX stocks to buy in June. 

Here is what the team have come up with…

Phil Harpur: Bigtincan Holdings Ltd (ASX: BTH)

Bigtincan provides organisations with a platform to access, collaborate on content, and improve customer engagement, in a fast-growing IT software niche commonly referred to as ‘sales enablement’.

Through its software-as-a-service (SaaS) business model, Bigtincan is a capital-light and highly efficient business through its subscription type model.

Bigtincan was only listed on the ASX a couple of years ago and is yet to become profitable, so it’s a relatively risky investment, compared to some of the more established technology companies listed on the ASX.

However, I believe the company appears to be reasonably on track to reach profitability in the years ahead as it gains further scale.

Motley Contributor Phil Harpur does not own shares in Bigtincan Holdings Ltd.

Sebastian Bowen: iShares Global Healthcare ETF (ASX: IXJ)

I’m not entirely comfortable with the highs that the Australian share market has been making recently, and so I’m going for a long-term bet with this one. This healthcare ETF invests in a global basket of healthcare shares – an industry that has evergreen demand.

The ageing populations of Australia and many other countries aren’t going away anytime soon, and thus will provide a long-term tailwind for global healthcare companies in my view. This ETF is a perfect way to capture this trend, and thus I think it’s a great investment this June.

Motley Fool contributor Sebastian Bowen does not own shares in iShares Global Healthcare ETF.

Nikhil Gangaram: AP Eagers Ltd (ASX: APE)

I think ASX shares in the automotive sector are worth watching in June. As the Australian workforce looks to get restarted, many people who take public transport may rethink their commute to work.

AP Eagers is the oldest listed automotive retail group on the ASX. The company has emerged from the coronavirus pandemic with a reduced operational and cost base and could be poised to benefit from a lift in new car sales.

In addition, AP Eagers has secured $122 million in working capital, giving the company an edge over smaller competitors.

Motley Fool contributor Nikhil Gangaram does not own shares in AP Eagers Ltd.   

Michael Tonon: WAM Global Ltd (ASX: WGB)

An investment in WAM Global gives you exposure to a portfolio of diversified, undervalued growth companies outside of the ASX. 

I’m currently attracted to it for a number of reasons. Although it has historically traded at a discount to its net tangible assets, this discount was almost 14% according to its last investment update. Meanwhile, most of WAM’s other portfolios trade at a small discount or even a significant premium. But WAM Global is the new kid on the block, and it needs to prove itself.

In addition, it has attractive profit reserves to continue paying a growing dividend and 17.1% cash weighting ready for deployment into depressed assets.

Motley Fool contributor Michael Tonon owns shares in WAM Global Ltd.

Lloyd Prout: Macquarie Group Limited (ASX: MQG)

With interest rates expected to be at record lows for a while, banks will see a reduction in their net interest margin and have pressure on their profits. If you do want some banking exposure, I’d go for Macquarie over the other ASX big banks.

Macquarie has diversified operations in asset management and investment banking which should give it more resilience in tough times and growth avenues during the good times. 

Macquarie shares are down around 30% from their 52-week high reached in February, presenting a nice entry point for a business that has returned more than 10% p.a. over the last 5, 10, and 20 years.

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

Brendon Lau: Aristocrat Leisure Limited (ASX: ALL)

The pullback in the Aristocrat Leisure share price after the group missed consensus profit expectations is a buying opportunity.

Aristocrat’s earnings weakness is due to its land-based business that’s impacted by the COVID-19 shutdown.

But it’s the digital division that I was watching closely – and that is going gangbusters. The mobile apps division is the key future growth driver for Aristocrat. However, the group may soon be firing on both engines again as the worst for the land-based business has passed.

Motley Fool contributor Brendon Lau owns shares in Aristocrat Leisure Limited.

Matthew Donald: Evolution Mining Ltd (ASX: EVN)

Evolution Mining has had an outstanding run in the past year with its share price increasing 58%.

Operations have not been materially impacted by the coronavirus and the company has benefited from continued strength in the gold price. Solid cash flow has enabled debt reduction, dividends to be paid, and investment in future production.

Evolution’s strong financial results are helped by being one of the lowest cost gold producers in the world. The uncertainty still in the market should support a high gold price and help maintain growth in Evolution’s share price.

Motley Fool Contributor Matthew Donald does not own shares in Evolution Mining Ltd.

Tristan Harrison: Bubs Australia Ltd (ASX: BUB)

I think Bubs is one of the most exciting ASX small caps. It’s an infant formula business with a specialty in goat products. Bubs is rapidly growing in overseas markets. In the latest quarter, it grew total revenue by 67%. But Chinese revenue increased by 104% and other market revenue rose by almost 20 times.

Careful spending meant Bubs generated a positive operating cashflow last quarter. If revenue growth continues to be strong it could remain cashflow positive from here with a long growth runway. Other Asian countries are prime growth targets, such as Vietnam. One to watch in 2020 and beyond.

Motley Fool contributor Tristan Harrison does not own shares in Bubs Australia Ltd.

Ken Hall: NextDC Limited (ASX: NXT)

The NextDC share price has surged higher in 2020 but I think it’s still a long-term buy. Data storage and security are set to become even more important as Aussie businesses look towards a more permanent work from home operating model.

NextDC successfully completed a $672 million equity raising which will strengthen its balance sheet and fund its strategic expansion plans. I think despite this year’s share price surge, NextDC shares could be a great ASX tech share to buy and hold for the long-term.

Motley Fool contributor Ken Hall does not own shares in NextDC Limited.

James Mickleboro: Pushpay Holdings Group Ltd (ASX: PPH)

The Pushpay share price was a very strong performer in May thanks to its stellar full year result and guidance for FY 2021.

Thankfully, I don’t believe it is too late to buy the donor management platform provider’s shares. This is because Pushpay still has a significant runway for growth.

In FY 2020 the company delivered a 33% increase in operating revenue to US$127.5 million. This is still only a fraction of its long term revenue target of US$1 billion. To achieve this target, it will need to win a 50% share of the medium to large church market. I wouldn’t bet against this.

Motley Fool contributor James Mickleboro does not own shares in Pushpay Holdings Group Ltd.

Daryl Mather: Orora Ltd (ASX: ORA)

Orora is a packaging company that goes ex-dividend on June 19 and will pay 14.1% based on Friday’s closing price. It also sold its Australasian fibre business in October 2019, providing the company with a $1.2 billion windfall. Half of this will be returned to shareholders.

Between the dividend payment and the return of capital, Orora shareholders will be paid 18% of the share price at Friday’s close. 

Historically the Orora share price tends to rise before it goes ex-dividend. As such, it would be wise to purchase this as early as possible to capture the large yield.

Motley Fool contributor Daryl Mather does not own shares in Orora Ltd.

More reading

• 5 exciting small cap ASX shares to watch in June
• Buy these quality ASX dividend shares next week
• 2 ASX shares to buy for strong retirement income
• 10 top ASX growth shares to buy in June for strong returns
• How to make $1,000 a month in dividends

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of BIGTINCAN FPO. The Motley Fool Australia owns shares of and has recommended BUBS AUST FPO, Macquarie Group Limited, and PUSHPAY FPO NZX. The Motley Fool Australia has recommended BIGTINCAN 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 Top ASX Stock Picks for June 2020 appeared first on Motley Fool Australia.

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