Tag: Motley Fool Australia

Shares in Ecofibre Ltd (ASX: EOF) have jumped 10% today after the cannabis company announced an exclusive distribution agreement. Under the agreement, Ecofibre’s topical hemp-derived products will be offered for sale through CVS pharmacies in the US. 

What does Ecofibre do?

Ecofibre is a biotechnology company which produces and sells hemp-derived products in Australia and the US. The company owns one of the largest and most diverse collections of genetics with over 300 landraces of cannabis from more than 25 countries. 

Ecofibre’s Ananda Hemp business processes hemp into nutraceutical products that promote health and wellness. The Ananda Food business provides customers with Australian grown and processed hemp-based foods.

Hemp Black is Ecofibre’s industrial use business that focuses on solutions across a spectrum of markets including fabrics, healthcare, composites, and building materials. 

New distribution agreement

Under the distribution agreement with CVS, Ecofibre will initially supply 10 products for sale exclusively at CVS pharmacy locations. Products will be manufactured at Ecofibre’s US headquarters in Georgetown, Kentucky. The products are expected to be available for purchase at select CVS locations from December 2020. The agreement is ongoing and covers future purchases with no minimum or maximum value. 

Ecofibre’s David Neu said, “we are very pleased to have been selected to supply this brand of products to be offered exclusively at CVS, and are excited at the long-term prospects of providing high-quality hemp-derived products to a broad range of consumers.”

Recent performance

Ecofibre reported revenue of $14.2 million in the March quarter, a 42% increase on the prior corresponding period, but down 4% on the previous quarter. The quarterly result was influenced by the dislocation in US hemp-derived cannabidiol (CBD) companies and the onset of COVID-19. 

Standards of professionalism and quality required by distributors and customers have continued to increase, causing significant industry disruption. Many low-quality manufacturers involuntarily exited the industry during the March quarter. 

Ecofibre has shifted to a wholesale distribution model with 2 significant buying groups added during the quarter. The shift is based on the expectation that the CBD industry must align with the existing US health care wholesale distribution model in the long term. Ecofibre expects to gain access to more pharmacies and practitioners over time. 

The balance sheet remains debt-free and capable of supporting working capital requirements for all 3 business lines. CEO Eric Wang said, “Ecofibre remains very positive over the medium-term . . . in the short-term we are acting on opportunities to accelerate growth where they are aligned to our strategy.”

More reading

• Goldman Sachs names 5 reasons iron ore prices won’t crash
• Looking for dividend income? Try these 3 ASX shares
• Leading broker names CBA shares as a sell
• ASX fundie says ASX 200 was more volatile in March than during the GFC
• 3 quality mid cap ASX shares to buy with $3,000

Motley Fool contributor Kate O’Brien 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 ASX stock of the day: This ASX cannabis share jumped 10% today as it cracked the US market appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/35Y4wXg

In afternoon trade the Commonwealth Bank of Australia (ASX: CBA) share price is down 2.5% to $59.22.

This means the banking giant’s shares are now down 38% from their 52-week high.

Unfortunately for shareholders, one leading broker still believes they could be heading lower from here.

Who is bearish on Commonwealth Bank?

This morning analysts at Goldman Sachs retained their sell rating but lifted the price target on the company’s shares slightly to $56.40.

According to the note, Commonwealth Bank’s third quarter cash earnings of $1.3 billion is running well short of the broker’s second half expectations.

Though It acknowledges that this weakness has been driven entirely by higher provisions for bad and doubtful debts because of the coronavirus pandemic.

Excluding one offs, its profits were running ahead of its estimates. This was driven by better than expected net interest income (NIM) growth and partly offset by higher expenses.

So why is Goldman Sachs bearish?

Goldman Sachs’ main issue with Commonwealth Bank is its valuation. It doesn’t believe the bank deserves to trade at such a premium to National Australia Bank Ltd (ASX: NAB) and the rest of the big four.

Goldman notes that Commonwealth Bank’s pro-forma CET1 ratio, adjusted for announced but not yet completed asset sales, will fall 45 basis points half on half. This will bring its pro-forma CET1 advantage over its peers to <1%, from >1.5% at the end of the first half.

“Therefore, while we remain of the view that the CBA balance sheet looks the most defensive of the major Australian banks (provisions, capital, funding etc), we cannot justify the 25% 12-mo forward PER premium it trades on versus peers (vs. 14% 15-yr av.) and we stay Sell,” it explained.

Its preferred pick in the sector remains NAB. Goldman has a conviction buy rating and $17.50 price target on its shares.

More reading

• Top brokers name 3 ASX shares to sell right now
• ASX 200 down 0.9%: Xero posts strong growth & Australian economy loses 594,300 jobs
• Why Beach, CBA, Qantas, & Xero shares are dropping lower
• What happens to ASX shares if Australian house prices do fall 30%?
• Is the CBA share price a buy?

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

The post Leading broker names CBA shares as a sell appeared first on Motley Fool Australia.

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

We all know the S&P/ASX 200 Index (ASX: XJO) market crash that we saw in March was both brutal and filled with extreme volatility. After all, the ASX 200 went from over 7,100 points to under 4,500 points in just over 1 month – a ~40% turnaround which quickly wiped out years’ worth of gains.

But research from ASX fundie Allan Gray actually proves what we were all thinking – the March market crash was the most brutal the ASX has seen since Black Monday in 1987. Not in terms of sheer losses – the GFC still comes out on top there, but in terms of market volatility.

According to Allan Gray, March 2020’s intraday stock market volatility was:

“Greater than at any other time [since 2000] and significantly exceeded the peaks during the Global Financial Crisis (GFC) between 2007 and 2009. In March this year there were nine trading days with volatility above 10%, seven of them consecutive. During the GFC there were only four days in total with greater than 10% intraday volatility and no consecutive trading days.”

Despite these extraordinary statistics, Allan Gray’s Chief Investment Officer, Simon Mawhinney, stated it wasn’t all bad news during March and investors should take advantage of volatility when it does happen:

“Volatility is your friend when investing for the long term, with the at times extreme fluctuations in price presenting excellent long-term buying opportunities. The causes of the current bout of volatility are certainly different . . . but in each of the previous bouts of market volatility, significant opportunities were presented to long-term, patient investors. It is hard to believe that this will be any different today.”

How do we invest if the ASX crashes again?

I think Allan Gray makes some great points. Yes, volatility can be extremely scary when it does occur, but it also gives us a chance to invest in ASX shares at great prices. Volatility often indicates emotion and irrationality in the markets, which is usually when shares become detached from their intrinsic value. Warren Buffett wouldn’t be nearly as rich as he is today if it weren’t for these kinds of periods.

Just think, anyone who took advantage of the volatility in the Afterpay Ltd (ASX: APT) share price over March would be sitting on gains close to 400% today.

Volatility never lasts, but the decisions you make during those times of high volatility do. Make them count!

More reading

• These ASX shares are set to dominate the post-COVID-19 economy
• 3 common mistakes millennials make investing in ASX shares
• This ASX growth share has rocketed 150% higher since March. Is it too late to invest?
• Why I’d buy and hold Telstra shares for a decade
• How to invest $1,000 like Warren Buffett today

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

The post ASX fundie says ASX 200 was more volatile in March than during the GFC appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2Am889P

The Australian share market is home to a large number of mid cap shares. The good thing about this is that mid caps generally carry less risk than small caps, but stronger potential returns than large caps.

This arguably makes it one of the best areas for investors to look for market beating returns over the next decade. But which mid cap shares should you buy?

Three that I would buy with $3,000 are listed below. Here’s why I rate them:

Bubs Australia Ltd (ASX: BUB)

Bubs is an infant formula and baby food company which has been growing at a very strong rate over the last few years. And thanks to some recent supply agreements with Coles Group Ltd (ASX: COL) and Woolworths Group Ltd (ASX: WOW), it looks well-placed to continue this trend. While previously it was running loss-making operations, it recently revealed positive quarterly operating cashflows. I’m optimistic this means the company has now reached a scale which will make its operations more and more profitable in the coming years. As a result, I think it could be a good long term option for investors.

Opthea Ltd (ASX: OPT)

Opthea is a developer of novel biologic therapies for the treatment of eye diseases. The key attraction to the company for me is the OPT-302 combination therapy. Last year Opthea delivered very strong Phase 2b study results. If its Phase 3 trial proves just as successful, then the future could be very bright for the company. The current standard of care treatments for wet age-related macular degeneration and diabetic macular edema had sales of over US$3.7 billion and US$6.2 billion in 2018. Another positive is that Opthea has a very strong balance sheet and appears well-funded to see OPT-302 through its trials.

Pushpay Holdings Group Ltd (ASX: PPH)

Pushpay is a fast-growing donor management platform provider for the faith, not-for-profit, and education sectors. Due to the quality of its product, Pushpay has been growing its share of the U.S. market at a rapid rate in recent years. This has led to the company’s recurring revenues increasing very strongly. The good news is that it still has a long runway for growth. Last week it revealed that it is targeting 50% of the medium to large church market. This represents a US$1 billion opportunity, which is many multiples what it achieved in FY 2020.

More reading

• ASX shares I’d invest $10,000 into today
• How to build good wealth with small investments
• Is it time to buy ASX small caps for your portfolio?
• The Pushpay share price is up 70% in 2020: Why I would still invest
• 3 ASX growth shares to buy immediately with $3,000

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 BUBS AUST FPO. The Motley Fool Australia owns shares of and has recommended PUSHPAY FPO NZX. The Motley Fool Australia owns shares of COLESGROUP DEF SET. 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 3 quality mid cap ASX shares to buy with $3,000 appeared first on Motley Fool Australia.

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

The spread of coronavirus is reshaping our economic future and paving the way for new winners among ASX shares. Structural shifts have been accelerated with remote working, digital payments, and e-commerce benefitting from more widespread adoption. 

ASX shares have faced very different fates since borders closed in March. The banking sector has taken a hit with profits and dividends plummeting. The travel sector remains in limbo. The retail sector has suffered from store closures and declining sales. But some individual ASX shares are not just surviving, but thriving in this new COVID-19 world. 

Online shopping has surged as consumers in lockdown go to the web for everything from essentials to luxury goods. Companies leveraged to this trend are benefitting. Kogan.com Ltd (ASX: KGN) and Afterpay Ltd (ASX: APT) are 2 ASX shares that are emerging as potential winners in the post-COVID world. 

Kogan sales and customers surge 

Kogan added 139,000 active customers in April, bringing its total number of active customers to 1,948,000. Gross sales in April 2020 grew by more than 100% compared to April 2019, leading to growth in gross profit of 150%. Kogan is Australia’s only diversified online retailer, and customers have inundated it as an alternative to physical shopping. 

The Kogan business model relies on offering products at lower prices than competitors, aggressively building market share while operating on slim profit margins. As an online-only retailer, Kogan benefits from lower costs than competitors with a physical presence, saving on store rental and staffing costs. 

Kogan launched Kogan Marketplace last year which allows third parties to sell via its website. The venture has been performing well, with sales growing 7% quarter-on-quarter between December and March. March 2020 sales were up 69% on February 2020 sales. The venture reduces working capital demands which should allow for greater profitability in future. 

Afterpay benefits from shift to online 

Buy now, pay later provider Afterpay has also benefited from the surge in online shopping with March being its third-largest underlying sales month on record. Underlying sales in the March quarter increased 97% compared to Q3 FY19. For the year to date, Afterpay has reported underlying sales of $7.3 billion, growing at 105% compared to the prior corresponding period (pcp). 

Healthy growth in merchant and customer numbers was recorded during the March quarter – active customers grew to 8.4 million, up 122% on the pcp. Merchant numbers grew to 48,400 globally, up 78% on the pcp. 

Foolish takeaway

The future of shopping and payments is changing rapidly thanks to coronavirus. Kogan and Afterpay are at the forefront of this shift. 

More reading

• 3 common mistakes millennials make investing in ASX shares
• This ASX growth share has rocketed 150% higher since March. Is it too late to invest?
• 2 exciting ASX tech shares to buy right now
• Could these small cap ASX shares be the next Afterpay?
• 3 top ASX shares to buy now and hold for 10 years

Motley Fool contributor Kate O’Brien has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd. The Motley Fool Australia owns shares of AFTERPAY T FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post These ASX shares are set to dominate the post-COVID-19 economy appeared first on Motley Fool Australia.

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

Most ASX investors make mistakes in their investing careers – none of us are perfect but millennials, through being the youngest and often the most inexperienced group of investors, often make a disproportionate amount.

Whilst this is totally normal, it doesn’t change the fact that making mistakes when investing is financially painful and it’s far better to learn from someone else’s mistakes than your own.

So here are three mistakes I often see millennials make when investing in ASX shares:

Mistake 1 – obsessing over share prices

This is one of the most common things I see with young investors out there. I have had excited friends tell me that one of their stocks was “up 1% today” and so they were ‘raking it in’. Whilst I think keeping an eye on your shares is a great idea, checking them every hour of the day isn’t. Investing is a long-term game, not something that should be tracked just based on normal market fluctuations. As Warren Buffett once said: “If you buy a farm, do you go up and look every couple of weeks to see how far the corn is up?”

Mistake 2 – buying too high, selling too low

This one is a common mistake and also one that will set you back dramatically. I have seen many millennial investors get very excited when their shares go up in value. So excited, in fact, that they think they have to ‘lock-in’ their gains, even if they’ve only owned their shares for a few months. On the other hand, they can pile more money in, chasing those ‘sweet gains’.

Conversely, I have also seen would-be investors buy shares and, after watching them go down 5% or 10%, sell out, thinking they’ve made a terrible mistake.

Again, this is letting the markets dictate what you do, which is a terrible habit to get into if you want decent returns over the long-term.

Mistake 3 – not diversifying

I once met a young investor who told me (very proudly) that he only owned two ASX shares – Afterpay Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P). On one hand, I think everyone should invest in companies they find interesting and exciting. But there is a limit. If your entire portfolio consists of unprofitable payments companies, you are leaving yourself open to a lot of risk.

That’s why I think it’s important for new investors to build up a diversified portfolio of companies across at least a few different industries. That way you are not wiped out if the government bans buy-now, pay-later offerings, for instance. If you only find interest in one area, you can always use exchange-traded funds (ETFs) to give your portfolio a little more balance.

More reading

• 2 exciting ASX tech shares to buy right now
• Could these small cap ASX shares be the next Afterpay?
• 3 top ASX shares to buy now and hold for 10 years
• If you invested $10,000 in the Afterpay IPO, this is how much you’d have now
• Is the Zip share price in the buy zone?

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 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.

The post 3 common mistakes millennials make investing in ASX shares appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2zFrx5a

On Wednesday I looked at three ASX shares that brokers have given buy ratings to this week.

Unfortunately, not all shares are in favour with them right now. Three that have just been given sell ratings are listed below.

Here’s why these brokers are bearish on them:

Amcor PLC (ASX: AMC)

According to a note out of Goldman Sachs, its analysts have retained their sell rating but lifted their price target on this packaging company’s shares to $12.50. Amcor delivered stronger than expected earnings growth in the third quarter. Its EBIT increased 10% compared to Goldman’s 7% forecast. However, it remains sell rated on valuation grounds. It notes that Amcor is trading at a notable premium to other packaging companies under its coverage. Amcor’s shares are changing hands for $14.10 this afternoon.

Commonwealth Bank of Australia (ASX: CBA)

A note out of Morgan Stanley reveals that its analysts have retained their underweight rating and cut the price target on this banking giant’s shares to $56.00. According to the note, following the release of its third quarter update, the broker sees little reason that Commonwealth Bank’s shares should trade at a premium to its peers. In addition to this, it has forecast a sizeable dividend cut in August and has concerns over margin pressures. The Commonwealth Bank share price is down almost 3% to $59.16 this afternoon.

Sigma Healthcare Ltd (ASX: SIG)

Analysts at UBS have retained their sell rating and 53 cents price target on this pharmacy chain operator and distributor’s shares following its trading update. Although Sigma reported strong sales growth in March because of the pandemic, it notes that management has decided against providing guidance for FY 2021 at this stage. So, with its shares trading at approximately 20x estimated forward earnings, UBS sees no reason to change its rating at this point. The Sigma share price is trading at 57.5 cents this afternoon.

More reading

• ASX 200 down 0.9%: Xero posts strong growth & Australian economy loses 594,300 jobs
• Why Beach, CBA, Qantas, & Xero shares are dropping lower
• What happens to ASX shares if Australian house prices do fall 30%?
• Is the CBA share price a buy?
• Negative interest rates coming? Here’s what it would mean for ASX 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 Amcor Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Top brokers name 3 ASX shares to sell right now appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3bwUQ7w

Exchange-traded funds (ETFs) can be really good choices for easy investing and good returns.

It’s a lot easier to invest in exchange traded funds than identifying individual shares to buy. To outperform the share market you need to put in a lot of time to research the potential investments, think about how much it can grow, consider the balance sheet strength and so on.

Investing in an ETF needs less analysis. If you set up a regular investment plan then you don’t need to really think about much at all. Yet you still get access to the strong long-term returns. Some have very low annual management fees.

Option 1: Vanguard FTSE Asia ex Japan Shares Index ETF (ASX: VAE)

This is an ETF focused on the Asian share market. Predominately it’s invested in businesses located in China, Taiwan, South Korean, Hong Kong and India.

Before the coronavirus came along, Asian economies were growing at an attractive pace. Middle class wealth was rising quickly and eCommerce was growing strongly. I think that some Asian businesses are among the best in the world.

Among the top 10 holdings are: Alibaba, Tencent, Taiwan Semiconductor Manufacturing, Samsung and Ping An Insurance.

The ETF has a relatively low management fee of just 0.40% per annum, which is much cheaper than most Asian-focused Australian fund managers.

I think the returns of 8.9% per annum have been solid since inception in December 2015 (which includes the current decline).

It has over 1,200 holdings, a dividend yield of 3%, a p/e ratio of 12.3x and a return on equity (ROE) of 14.75%.  

Option 2: Betashares FTSE 100 ETF (ASX: F100)

The UK share market has been pummelled just like most other markets. With this investment you can get exposure to 100 of the biggest businesses listed on the London Stock Exchange.

One of the benefits of the UK share market is that the ETF’s top 10 holdings of the FTSE are in industries that are holding up quite well. There’s pharmaceuticals (Astrazeneca and GlaxoSmithKline), alcohol (Diageo) and consumer products (Unilever and Reckitt Benckiser).

Within the next group of 20 shares are shares like mining (Rio Tinto and BHP), electricity distribution (National Grid), a telco (Vodafone) and a supermarket (Tesco).

I think the UK share market is pretty defensive with a solid dividend yield. At the end of April this BetaShares offering had a trailing dividend yield of almost 6%, though this will probably reduce somewhat.

BetaShares charges an annual management fee of 0.45% per annum.

Foolish takeaway

Both of these ETFs look cheap today and have quality holdings that could be good for many years ahead. I’d probably prefer buying the UK ETF because of the defensive shares and high dividend yield, but getting exposure to Alibaba and Tencent sounds good to me too.

More reading

• 2 quality ETFs I’d buy today

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.

The post 2 ETFs for easy investing and good returns appeared first on Motley Fool Australia.

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

The Kogan.com Ltd (ASX: KGN) share price has been experiencing a very strong rally. After dropping as low as $3.45 in mid-March, Kogan shares are now trading at $8.75, a massive 153.6% increase. In comparison, the S&P/ASX 200 Index (ASX: XJO) has seen a much more modest increase during this period.

So, is it too late for investors to take a stake in Australia’s largest locally-based, online specialist retailer?

Strong March quarter and record customer growth in April

Kogan released a trading update in April indicating that it saw a very strong 30% increase in gross sales and a 23% jump in gross profit during the March quarter. The final month of March saw particularly strong growth, with sales increasing by more than 50% on the prior corresponding period (pcp). The company also experienced its largest-ever monthly increase in active customers since its IPO.

Kogan revealed that it was able to successfully navigate through the disruptions caused by the coronavirus in all of its key markets.

Due to the harsh lockdown restrictions, there has been a surge in online spending at specialist retail sites such as Kogan and Amazon. In particular, Kogan has seen a strong rise in the sales of home office equipment, such as PCs and laptops, as well as home fitness equipment.

This ramp-up in sales accelerated further in the month of April, with sales growing by more than 100% in April compared to the pcp.

Profits during April were even more impressive, with gross profit growing by more than 150% and adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) increasing by more than 200%. This boost in sales during April meant that Kogan’s adjusted EBITDA was up by a very impressive 40% financial year to date compared to the same period last financial year.

This strong result was achieved despite the company heavily investing to build its brand, with overall operating costs increasing by 37% during the March quarter. 

Kogan continues to invest in its proprietary marketplace platform. It revealed that its pipeline for new sellers in the Kogan Marketplace remains strong and continues to grow despite its rapid onboarding of new sellers.

Is it too late to invest in Kogan?

With Kogan’s recent share price rally, I don’t think it offers investors compelling value at present, but it is still worthy of consideration as a long-term buy and hold option.

Kogan remains well-placed to leverage the growing adoption of online shopping, the increasing popularity of its Kogan-branded products and in particular, its fast-growing Kogan Marketplace.

Additionally, the company’s expansion into a broad range of verticals, including internet, mobile, energy, credit cards, super, travel, insurance and cars, provides it with a diversified business model and a wide range of future growth opportunities.

More reading

• Why I’d buy and hold Telstra shares for a decade
• How to invest $1,000 like Warren Buffett today
• ASX 200 down 0.9%: Xero posts strong growth & Australian economy loses 594,300 jobs
• Should you cash out of this ASX 200 rally?
• This ASX 200 share is rocketing higher after delivering more strong sales growth

Motley Fool contributor Phil Harpur owns shares of Kogan.com ltd. The Motley Fool Australia owns shares of and has recommended Kogan.com 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 This ASX growth share has rocketed 150% higher since March. Is it too late to invest? appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/35ZI8Nb

Telstra Corporation Ltd (ASX: TLS) shares have outperformed in 2020 despite broad market volatility. While the S&P/ASX 200 Index (ASX: XJO) has fallen 19.91%, Telstra shares are ‘only’ down 12.57% this year.

But despite holding value better than many of its ASX 200 peers, is the Aussie telco in the buy zone?

Why I’d buy and hold Telstra shares for a decade

Telstra has been a staple of Australian share portfolios for decades. The Aussie telco was favoured for its 100% dividend payout policy before slashing it lower in recent years. However, its shares currently yield a tidy 3.20% and, I believe, still have some serious upside.

Telstra is shaping up as a potential leader in the 5G network space. The group continues to invest heavily in the future which I think is key in this hyper-competitive industry. With NBN Co breathing down its neck, Telstra is focusing strongly on maintaining market share.

Innovation is also a key reason I’d buy and hold Telstra shares for a decade. The company’s ‘Telstra 2022’ strategy illustrates forward thinking and, furthermore, the group is also focused heavily on slashing its costs. 

Having said that, the changing face of its competition has the potential to negatively impact Telstra’s profitability. The proposed merger between TPG Telecom Ltd (ASX: TPM) and Hutchinson Telecommunications (Aus) Ltd (ASX: HTA) is shaping up to be a real threat to Telstra’s long-term future. 

The merger would combine Vodafone‘s and TPG’s capabilities and create another major player alongside Telstra and Optus. However, there is also the opportunity for Telstra to capture more market share amid an industry shake-up.

This means shares in the Aussie telco could see some real gains if its Telstra 2022 strategy pays off. Given its strong dividend yield in the short to medium term and a solid long-term growth outlook, I think there are worse buys than Telstra.

I also think the move towards working from home more could benefit Telstra. More remote working means increased demand for mobile infrastructure, which could benefit this market leader.

Foolish takeaway

Telstra shares have fallen lower in 2020, but it’s important to invest for the long-term. I prefer to drown out the day-to-day noise and look at Telstra as a company to buy and hold for the decades ahead.

More reading

• How to invest $1,000 like Warren Buffett today
• ASX 200 down 0.9%: Xero posts strong growth & Australian economy loses 594,300 jobs
• Should you cash out of this ASX 200 rally?
• This ASX 200 share is rocketing higher after delivering more strong sales growth
• David Tepper believes we’re in the biggest stock bubble since 1999

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra 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’d buy and hold Telstra shares for a decade appeared first on Motley Fool Australia.

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