Tag: Motley Fool Australia

The Australian share market started the week on an extremely positive note on Monday. This led to a good number of shares charging notably higher.

Some shares climbed more than most and a few even managed to hit 52-week highs or better.

Here’s why these ASX shares are flying high right now:

Afterpay Ltd (ASX: APT)

The Afterpay share price continued its positive run and raced to a record high of $49.00 on Monday. Investors have been fighting to get hold of the payments company’s shares in recent weeks for a number of reasons. These include its very strong performance during the third quarter, WeChat owner Tencent Holdings becoming a substantial holder, explosive active customer growth in the U.S. market, and its upcoming addition to the MSCI Australia index.

Reject Shop Ltd (ASX: TRS)

The Reject Shop share price hit a 52-week high of $4.91 yesterday. The discount retailer’s shares have been strong performers over the last few weeks and are now up over 63% since this time last month. One of the catalysts for this appears to have been a broker note out of Goldman Sachs. At the start of the month the broker upgraded its shares from a sell rating to a buy rating with a $4.75 price target. It spoke positively about its turnaround story with a new executive team, its robust balance sheet, and the potential for material improvements in efficiencies in labour, rent, and stock turn.

Whispir Ltd (ASX: WSP)

The Whispir share price hit a record high of $2.80 on Monday. Investors have been buying the communications workflow platform provider’s shares in recent months due to its strong performance during the pandemic. The work from home initiative has been driving increased demand for its offering, which led to solid Annualised Recurring Revenue (ARR) growth during the third quarter. Whispir posted a 10.4% quarter on quarter jump in its ARR to $40.5 million. This was the result of a record addition of 49 net new customers and increased platform use by existing customers.

More reading

• 5 ASX 200 10-bagger shares of the decade
• ASX 200 jumped higher, rises more than 2%
• Top brokers name the latest ASX 200 stocks to sell today
• These ASX 200 share prices were cut in half. Where are they now?
• The Afterpay share price just hit a new record high: Should you invest?

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 Whispir Ltd. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Whispir Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Why Afterpay and these ASX shares just zoomed to 52-week highs appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3gk9Itr

Given the bleak outlook for interest rates in Australia over the next few years, if I had $10,000 sitting in a savings account, I would be looking to put it to work in the share market.

But where should you invest $10,000? Three top ASX shares that I would buy with these funds are listed below. Here’s why I like them:

Freedom Foods Group Ltd (ASX: FNP)

Freedom Foods is a growing food company with a focus on healthy eating. After several years of investing heavily in its business, the company now looks well-positioned for strong growth in the coming years. Especially given the increasing demand it is experiencing in key channels and its exposure to on trend categories such as dairy, nutritionals, and plant beverages. This was evident in the first half of FY 2020 when Freedom Foods delivered a 43.4% increase in sales and a 42.1% lift in operating net profit after tax.

Pushpay Holdings Group Ltd (ASX: PPH)

Another option to consider investing $10,000 into is Pushpay. It provides a donor management platform to the faith, not-for-profit, and education sectors. The company has worked hard over the last few years to carve out a leadership position in the sector and is now reaping the rewards. In FY 2020 the company grew its operating profits at an explosive rate. Pleasingly, thanks to increasing demand, its guidance for FY 2021 implies another doubling of profits. And given how it is still only scratching at the surface of its sizeable market opportunity, I believe there is plenty more to come from Pushpay over the next decade.

SEEK Limited (ASX: SEK)

A final share to consider buying with $10,000 is SEEK. While times are hard because of the pandemic, I think this job listings company would still be a great option due to its positive long term growth outlook. This is due to its international operations and particularly its China business. I believe the latter has the potential to underpin strong earnings growth over the next decade. So, with its shares down 20% from their high, now could be an opportune time to snap them up with a long term view.

More reading

• Got $2,500? I’d buy these 2 ASX shares in a heartbeat
• Which is the best ASX entertainment media share?
• The smartest shares to buy if you have $2,000
• 3 explosive ASX growth shares to buy
• 2 ASX stocks that could replace cash

Motley Fool contributor James Mickleboro owns shares of SEEK Limited. The Motley Fool Australia owns shares of and has recommended PUSHPAY FPO NZX. The Motley Fool Australia has recommended Freedom Foods Group Limited and SEEK Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Where to invest $10,000 into ASX shares immediately appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2TDe70U

ASX shares are a great way to great your wealth with a small starting amount. You don’t need to have a huge amount of cash set aside like having a house deposit.

With everything that’s going on with the coronavirus it’s hard to say what the shorter-term outlook is for some ASX shares.

But there are some picks that I’d buy in a heartbeat:

ASX share 1: Pushpay Holdings Ltd (ASX: PPH)

Pushpay is electronic donation business. At the moment its client base is focused on large and medium US churches which are obviously huge sources donations each year. A large amount of those donations were in cash.

But now with the social distancing and restrictions, electronic donations very valuable to churches. Even if total giving reduces, it seems electronic giving will dramatically rise. It also helps that Pushpay offers a livestreaming option.

I think Pushpay is still an underappreciated ASX share by investors. Obviously the Pushpay share price has jumped recently. But I think FY21 alone looks very promising. The earnings before interest, tax, depreciation, amortisation and foreign currency (EBITDAF) is expected to just about double.

Pushpay is still expecting further strong revenue growth with expanding profit margins. It’s still targeting over 50% of the medium and large church segments which is an opportunity representing over US$1 billion in annual revenue. That’s a big, long-term growth runway. 

I’d buy it in a heartbeat because I think the next three to five years could be very promising.

Pick 2: Bubs Australia Ltd (ASX: BUB)

Bubs is another ASX share I’d be very happy to buy today. The growth it has generated over the past three years has been very impressive. I like how it has become a vertically integrated player with its own canning facility.

The infant formula business is consistently expanding its distribution netowrk. Its growth in China is of course a major part of the opportunity. The FY20 third quarter Chinese revenue rocketed 104% compared to the prior corresponding period.

Outside of China and Australia, its ‘other markets’ revenue rose by 20 times in the FY20 third quarter, with significant growth in Vietnam. This represented 12% of total sales. That’s very promising for the ASX share.

I was particularly pleased to see that Bubs generated positive cashflow of $2.3 million in the quarter. I think this is a great milestone. If Bubs remains cashflow positive then it’s a much safer bet.

Foolish takeaway

I think both of these ASX shares have great prospects. They’re one of the few shares to see acceleration of growth during this period, adding onto their already impressive outlooks. Both are seeing rising margins, so it’s hard to pick a favourite. I’d want to buy both!

More reading

• Where to invest $10,000 into ASX shares immediately
• The smartest shares to buy if you have $2,000
• 3 explosive ASX growth shares to buy
• 2 ASX stocks that could replace cash
• Where growth, income, and value investors can invest right now

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of BUBS AUST FPO. The Motley Fool Australia owns shares of and has recommended PUSHPAY FPO NZX. The Motley Fool Australia has recommended BUBS AUST 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 Got $2,500? I’d buy these 2 ASX shares in a heartbeat appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2zjsbG1

Fortunately in this low interest rate environment, there are a lot of dividend shares for investors to choose from on the Australian share market.

Three which I think would be good long term options are listed below. Here’s why I would buy them:

Commonwealth Bank of Australia (ASX: CBA)

The Commonwealth Bank share price has come under a lot of pressure this year due to concerns that it might experience a spike in bad debts from the pandemic. While this is a real possibility, based on how quickly Australia is reopening, I believe the provisions it has taken will be more than enough. In light of this, I am optimistic the worst is behind the bank and now could be a good time to invest. Especially given the generous dividend yield its shares offer. I estimate that it will pay a $3.70 per share dividend in FY 2021. This equates to a forward dividend yield of 6.3%.

Sydney Airport Holdings Pty Ltd (ASX: SYD)

If you’re not in need of income immediately, then it could be worth considering a patient investment in this airport operator’s shares. Times are certainly hard for the airport operator, but it won’t be long until a growing number of travellers are passing through its terminals again. According to a recent note out of Goldman Sachs, it expects Sydney Airport to start recovering from the pandemic in the coming months. It believes this will allow it to pay a 29 cents per share distribution in FY 2021 and then a 37 cents per share distribution in FY 2022. This represents yields of 4.9% and 6.25%, respectively.

Vanguard Australian Shares High Yield ETF (ASX: VHY)

A final option for income investors to consider buying right now is the Vanguard Australian Shares High Yield ETF. I think this exchange traded fund is a quality option for income investors due to the diversity of its holdings. The fund provides investors with exposure to many of the highest yielding shares on the ASX through a single investment. This includes the banks, telcos, and mining giants. At present I estimate that its units offer a forward dividend yield of at least 5%.

More reading

• Fund managers have been buying these ASX shares
• ASX 200 jumped higher, rises more than 2%
• Here’s why these 3 ASX dividend shares are top income choices today
• These ASX 200 share prices were cut in half. Where are they now?
• Leading brokers name 3 ASX 200 shares to buy right now

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

The post Why I would buy CBA and these ASX dividend shares appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2X3IPT8

On Monday the S&P/ASX 200 Index (ASX: XJO) started the week in sensational form. The benchmark index jumped 2.15% to 5,615.6 points.

Will the market be able build on this on Tuesday? Here are five things to watch:

ASX 200 expected to push higher again.

It looks set to be another positive day of trade for the ASX 200. According to the latest SPI futures, the index is expected to open the day 47 points or 0.85% higher this morning. This is despite Wall Street and the UK being closed for public holidays. In Europe the DAX was on form and jumped 2.9% higher on reopening optimism.

Oil prices climb higher.

It could be a good day for energy producers such as Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO). According to Bloomberg, the WTI crude oil price has pushed 1.4% higher to US$33.72 a barrel and the Brent crude oil price is up 1.3% to US$35.58 a barrel. Traders appear optimistic that demand is picking up for oil as economies reopen.

Gold price drops lower.

Gold miners including Newcrest Mining Limited (ASX: NCM) and St Barbara Ltd (ASX: SBM) could come under pressure today after spot gold price dropped lower. According to CNBC, the spot gold price fell 0.5% to US$1,727.40 an ounce. This was driven by stimulus in Japan leading to an increase in risk appetite from investors.

Iron ore price softens.

Fortescue Metals Group Limited (ASX: FMG) and other iron ore producers will be on watch today after Chinese iron ore prices softened overnight. The price of the steel-making ingredient fell 1% in China, possibly due to profit taking after some strong gains in recent weeks. The London Metal Exchange was closed.

Qantas shares on watch.

The Qantas Airways Limited (ASX: QAN) share price will be one to watch today after a number of industry developments. The first is that airline giant Lufthansa has been bailed out by the German government. According to CNBC, the two parties have agreed on a US$9.8 billion rescue package. Elsewhere, Air New Zealand Limited (ASX: AIZ) provided a liquidity update this morning which revealed that it has burned through NZ$260 million of cash during the pandemic.

More reading

• CSL shares have underperformed the ASX 200 over the past month. What’s going on?
• ASX 200 jumped higher, rises more than 2%
• These are the latest ASX shares to be upgraded by brokers to buy
• 3 strong ASX 200 shares to buy for a retirement portfolio
• Top brokers name the latest ASX 200 stocks to sell today

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

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

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

Due to new technologies and favourable industry tailwinds, I think there are a number of small cap ASX healthcare shares which have the potential to grow materially over the next 10 years.

Three small cap healthcare shares to add to your watchlist right now are listed below. Here’s why I think they are worth watching:

Alcidion Group Ltd (ASX: ALC)

The first small cap ASX healthcare share to watch is Alcidion. It is a health informatics company aiming to transform healthcare with smart, intuitive technology solutions. The company has a growing portfolio of software products and services that support interoperability, allow communication and task management, and deliver clinical decision support at the point of care to improve patient outcomes. At present its software is in 215 hospitals, 42 healthcare organisations, and on 30,000 beds. I expect this to increase strongly in the coming years and drive strong sales growth.

Medadvisor Ltd (ASX: MDR)

Another ASX healthcare share to watch is Medadvisor. It is a growing software systems developer with a focus on addressing gaps in personal medication adherence. The company provides software that connects to pharmacy dispensing systems to automatically retrieve medication records. It also comes with an intelligent training, information, and reminder system to ensure correct and reliable medication use. In addition to this, the company is rolling out a medicine delivery service and a telehealth solution. The latter looks set to benefit from the rapid adoption of telehealth technology following the pandemic.

Volpara Health Technologies Ltd (ASX: VHT)

Another small cap ASX healthcare share which I believe has significant potential is Volpara. Its software leverages artificial intelligence imaging algorithms to assist with the early detection of breast cancer. It has been growing its market share in North America at an exceptionally strong rate. This led to the company recently reporting a 172% increase in annual recurring revenue (ARR) to NZ$18 million. The good news is that this is still only scratching at the surface of an estimated US$750 million ARR opportunity in breast cancer screening.

More reading

• Top brokers name 3 ASX shares to buy next week
• 3 exciting small cap ASX shares that should be on your watchlist
• These small cap ASX shares could be stars of the future
• 3 exciting ASX healthcare shares to watch in the 2020s
• 3 exciting small cap ASX shares to invest $3,000 into right now

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 Alcidion Group Ltd and MedAdvisor. The Motley Fool Australia owns shares of and has recommended VOLPARA FPO NZ. The Motley Fool Australia has recommended Alcidion Group Ltd and MedAdvisor. 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 exciting small cap ASX healthcare shares to watch appeared first on Motley Fool Australia.

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

The CSL Limited (ASX: CSL) share price has done the unthinkable and actually underperformed the broader S&P/ASX 200 Index (ASX: XJO) over the past month.

To be frank, CSL shares normally beat the pants off the market. It managed to do this both in the 2016–2020 bull market and in the short-but-sharp bear market we saw in February and March of this year.

But since mid-April, CSL shares have actually fallen around 10%, whilst the ASX 200 has rallied around 7% over the same period.

What’s going on?

Has CSL lost its magic?

Well, in my opinion, the recent underperformance of CSL shares has nothing to do with the company itself. CSL hasn’t yet told the markets if it expects any material hit to revenue or earnings as a result of the coronavirus pandemic (apart from disruption to plasma collections). CSL isn’t actively joining the race for a COVID-19 vaccine, but (as Fool contributor Nikhil Gangaram pointed out today) the company is working on antibody-based medicines that will allow patients to recover faster without the use of a ventilator.

We do know that CSL has obtained additional capital (US$750 million at 2.68%) through the bond market recently, but again, this doesn’t indicate anything of significance for investors in my view.

So no, I don’t think CSL has lost its magic.

Instead, I view the pullback in the CSL share price as a sign that investors might have got a little ahead of themselves in April.

CSL shares reached lows of $270.88 in March, but by 9 April, CSL was back to $329 a share, just below the all-time high of $342.75 that we saw in February.

Given what’s going on in the global economy, it’s possible investors decided this run-up was a little optimistic, and that’s why we are seeing a more subdued CSL share price in recent weeks.

Are CSL shares a buy today?

Although I’ve long thought CSL is a top company, it’s also a little too highly priced for me to consider a buy today. Even on today’s share price of $298.27, the company is still asking a price-to-earnings (P/E) ratio of 44.28. That’s a fairly high number for the ASX’s largest company, and one I don’t think is entirely justified by CSL’s future growth prospects.

I might be waiting a while, but CSL is still not in the buy zone for me, despite its resilience and quality as a business.

More reading

• These are the latest ASX shares to be upgraded by brokers to buy
• 3 strong ASX 200 shares to buy for a retirement portfolio
• Top brokers name the latest ASX 200 stocks to sell today
• These ASX 200 share prices were cut in half. Where are they now?
• 2 ASX shares in the fight against coronavirus

Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL 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 CSL shares have underperformed the ASX 200 over the past month. What’s going on? appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2WXg0aQ

There are some cheap ASX shares out there that are trading at great value in my opinion, partly due to the coronavirus.  

With some shares it’s hard to decide if they’re trading cheaply or not because it’s hard to gauge how to price the current and future earnings. It’s much easier to see when a quality business is trading cheaply compared to their assets.

Here are two cheap ASX shares to buy today:

Brickworks Limited (ASX: BKW)

Brickworks is one of Australia’s biggest building materials businesses. It produces a variety of products including bricks, paving, roofing, precast and so on. Everyone is expecting there to be a construction slowdown later this year because of the coronavirus economic impacts. The same can be said for Brickworks’ US operations.

But when you factor in the value of Brickworks’ other assets, it makes the construction side look extremely cheap. Brickworks currently owns a large chunk of Washington H. Soul Pattinson and Co Ltd (ASX: SOL), these shares are currently valued at approximately $1.75 billion. It also has a 50% stake of an industrial property trust which is worth $710 million. The value of these two divisions together comes to around $2.45 billion, which compares to Brickworks’ current market cap of $2.05 billion.

Wouldn’t you want to buy a great building products company operating in two major markets for less than $0? That’s why I think Brickworks is a cheap ASX share.

Future Generation Global Invstmnt Co Ltd (ASX: FGG)

This is a special listed investment company (LIC). It donates 1% of its net assets each year to youth mental health charities. The LIC doesn’t change any management fees or performance fees. Future Generation Global invests in the funds of Australian fund managers that invest in overseas shares.

These fund managers are meant to be among the best in Australia. They include names like Magellan Financial Group Ltd (ASX: MFG) and Cooper Investors.

The global LIC has been a solid performer over the past three years to 30 April 2020. Its gross investment performance of 10.6% per annum outperformed the MSCI AC World Index (AUD) by 1.3% per annum. Outperformance makes a cheap ASX share even more attractive. 

I think Future Generation Global is a cheap ASX share because at the end of April 2020 its pre-tax net tangible assets (NTA) per share was $1.426 per share, which is a 20% discount to today’s share price of $1.145. You wouldn’t be able to get that kind of discount by investing with the fund managers yourself.

Foolish takeaway

I think both of these ASX shares look cheap to me. Once construction starts again I think the current Brickworks share price will look very cheap. Brickworks also comes with a grossed-up dividend yield of 6%. However, Future Generation Global does offer much more diversification with international exposure. I think both shares are great, cheap buys today.

More reading

• 2 quality ASX shares to buy for long-term growth
• How I would build a $130,000 ASX dividend portfolio right now
• How $1,000 can be enough to change your money mindset
• 3 ASX shares that I’d invest $1,000 into EVERY month
• My 3 best ASX dividend shares to buy right now

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. 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 2 cheap ASX shares to buy today appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3ehrCve

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

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

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

Two notices that have caught my eye are summarised below:

Mayne Pharma Group Ltd (ASX: MYX)

According to a notice of initial substantial holder, Lazard Asset Management Pacific Co. has been buying this pharmaceutical company’s shares over the last three months. It picked up its first parcel of shares at the end of February and made its most recent purchase on Thursday with a ~$890,000 investment. This final purchase took its holding to a total of 84,379,755 shares, which represents a 5.03% stake in the company.

Mayne Pharma’s shares have fallen heavily over the last few years due to incredibly tough trading conditions in the generic drugs market. Lazard may believe the company is over the worst of it now and could return to growth in the near future.

Megaport Ltd (ASX: MP1)

Another notice of initial substantial holder reveals that Commonwealth Bank of Australia (ASX: CBA) has become a substantial holder of this elasticity connectivity and network services provider. The banking giant and its subsidiaries have been building a position over the last few months and now own a total of 7,811,384 shares. This equates to a 5.1% stake in the company.

Megaport’s shares have been on fire over the last 12 months thanks to its explosive recurring revenue growth. This has led to them generating a return of over 130% for shareholders. Judging by its purchases, Commonwealth Bank appears to believe there are more strong returns to come in the future.  

More reading

• ASX 200 Weekly Wrap: ASX rallies on mining highs
• 3 high yield ASX dividend shares to buy right now
• How $1,000 can be enough to change your money mindset
• Is Afterpay an ASX blue chip of tomorrow?
• 2 ASX 200 dividend shares to buy for income in 2021

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 MEGAPORT FPO. The Motley Fool Australia has recommended MEGAPORT 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 Fund managers have been buying these ASX shares appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3gm2ntd

Dollar-cost averaging (DCA) is an investing strategy commonly prescribed for the ‘average’ investor on the street. It involves putting a consistent amount of money into an ASX share or portfolio of shares at a consistent interval over time (e.g. $100 a week), with no regard to the underlying price. In this way, you can get an averaged price without having to worry about timing the right entry point, which can be an emotionally fraught exercise.

Of course, this only works if you have a quality company that rises in value over time. Anyone who tried dollar-cost averaging into say AMP Limited (ASX: AMP) over the last decade would have been throwing money away.

So with that in mind, here are 3 ASX shares that I think are perfect for a DCA strategy.

Vanguard Australian Shares Index ETF (ASX: VAS)

This exchange-traded fund (ETF) is perfect for a DCA strategy. That’s because it holds not 1, but 300 of the largest companies on the ASX. It’s impossible to figure out whether an index fund like VAS is truly overvalued or undervalued at any one point, because you would have to do pricing analysis on all 300 companies.

Thus, a far easier way of successfully investing in a basket of companies like this would be to employ DCA. Losing companies are eventually weeded out and rising stars are added to over time. Index funds like VAS have historically always risen and made new highs (despite some volatility in between), and therefore I think this type of investment will serve you well under a DCA strategy.

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

‘Soul Patts’ is a company that acts as an investor in its own right. It does so by buying other ASX shares and building its own investment portfolio outside its old core business of operating pharmacies. Today, Soul Patts has large stakes in a diverse range of Aussie companies, including TPG Telecom Ltd (ASX: TPM), Brickworks Limited (ASX: BKW), New Hope Corporation Limited (ASX: NHC) and BKI Investment Co Ltd (ASX: BKI).

Thus, I think this company is a great alternative to an ASX index fund like VAS – which some investors might not like due to the heavy exposure to ASX banks and miners. It has a proud history of growth, including an unbeatable 20-year streak of increasing its dividends. As such, I think it’s a great company to employ a DCA strategy into.

More reading

• 2 quality ASX shares to buy for long-term growth
• Replace your term deposit with these dividend shares
• My ASX share for the week
• How to retire early using ASX shares
• Where to invest $1,000 in ASX ETFs today

Motley Fool contributor Sebastian Bowen owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks 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.

The post 2 ASX shares perfect for dollar-cost averaging appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3ehjNW6