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Traditional ASX blue-chip shares are cutting their dividends. Income investors looking for growing dividends may do well holding Carsales.Com Ltd (ASX: CAR), JB Hi-Fi Limited (ASX: JBH) and Domino’s Pizza Enterprises Ltd. (ASX: DMP).

For my analysis, I looked at 2010 to 2019 calendar years.

Carsales

Carsales has grown its dividend except in 2013 when the dividend fell from 31 cents in 2012 to 28 cents in 2013. Since then, Carsales’ dividend has grown each year, as can be seen by the chart below:

Despite the headwinds, CEO Cameron McIntyre stated in a recent business update: “Our market leading position, strong customer proposition and diversification across geography and product supports our resilience and positions Carsales well into the future.”

The Carsales share price trades 28% lower from its 52-week high of $19.60. I believe this reflects the short-term uncertainty in the economy. Having said that, Carsales is a quality tech company growing its dividend in 9 out of the last 10 years and could continue to reward patient growth and income investors over the next decade.

JB Hi-Fi

JB Hi-Fi has rewarded patient long-term investors with a growing dividend between 2012 and 2019. While short-term headwinds are impacting the economy, JB Hi-Fi has a track record of a growing dividend, as can be seen by the chart below:

Last week on 6 May, JB Hi-Fi released a third-quarter market update detailing an acceleration in sales. It attributed the rise in sales to anticipated easing of government restrictions. New Zealand was the only market in which it experienced a decline in sales. Strong growth in JB Hi-Fi and The Good Guys more than offset the weakness.

JB Hi-Fi also secured an additional $260 million of short-term debt facilities. However, it does not expect this will be needed despite a continued withdrawal of earnings guidance for FY20.

Despite the headwinds, JB Hi-Fi is a quality company that I believe will grow its dividends over the next decade despite the immediate uncertainty. The market appears to agree, sending the JB Hi-Fi share price up 42% over the past 12 months.

Domino’s Pizza

Domino’s is a dividend success story, managing to increase its dividend each year between 2010 and 2019. After paying an 18 cent dividend in 2010, this has heated up to $1.15 in 2019. In addition to paying rising dividends, the Domino’s share price has rallied 38% over the past 12 months.

Domino’s is reopening stores as worldwide restrictions issued by governments begin to be eased. It is seeing a shift in how consumers are ordering, with food delivery services soaring on the back of restrictions. In recognition of this, Domino’s has hired more team members.

In financial news, the balance sheet remains strong with no committed short-term debt and more than $260 million cash as of 27 March 2020.

The company’s medium-term outlook is unchanged for new store openings of 7% to 9% per year, growth in same-store sales of 3% to 6% per year, and increased net capital expenditure of $60 million to $100 million per year.

Despite the strong financial situation, some franchisees are waiting to see if stores will be reopened, dependent on local market conditions.

On balance, Domino’s appears to be in good shape for the long term. In my view, patient long-term shareholders could see further increases in dividends.

Foolish takeaway

Investing is a marathon, not a sprint. Shareholders in Carsales, JB Hi-Fi and Domino’s that have played the long game have seen both capital and income growth. I suspect this will continue and the recent uncertainty offers an opportunity to buy growing dividends at growing companies.

More reading

• Carsales share price down 26% since February. Is it now a good buy?
• Analysts think this ASX auto share could be turning the corner
• These 3 ASX 200 retail shares are absolutely thriving right now
• 3 ASX 200 pandemic winners and 3 losers
• Are ASX retail shares undervalued today?

Motley Fool contributor Matthew Donald has no position in any of the stocks mentioned. The Motley Fool Australia has recommended carsales.com Limited and Domino’s Pizza Enterprises Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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On Monday 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:

ASX Ltd (ASX: ASX)

A note out of the Macquarie equities desk reveals that its analysts have retained their underperform rating and lifted the price target on this stock exchange operator’s shares to $71.50. This follows the release of its April update last week. Although Macquarie notes strong average daily volume growth and a sharp increase in capital raisings during the second half, it still feels its shares are overvalued at the current level. It estimates that ASX Ltd’s shares are changing hands at 31x estimated full year earnings. Its shares are trading at $83.00 this afternoon.

Cochlear Limited (ASX: COH)

According to a note out of Goldman Sachs, its analysts have retained their sell rating and $156.00 price target on this hearing solutions company’s shares following its recent trading update. That update revealed that Cochlear’s sales were down 60% in April because of a sharp reduction in elective surgeries during the pandemic. And although there has been a recovery in elective surgeries now, the broker isn’t overly confident on the trajectory of the recovery. It suspects it may take longer than the market expects and therefore holds firm with its sell rating. Cochlear’s shares are changing hands for $187.98 on Tuesday.

Domain Holdings Australia Ltd (ASX: DHG)

Analysts at Morgans have retained their reduce rating and $2.25 price target on this property listings company’s shares. According to the note, the broker expects a sharp decline in listing volumes in the fourth quarter of FY 2020 and further declines in the first two quarters of FY 2021. In light of this, it has reduced its revenue forecasts accordingly. Domain’s shares are trading at $2.93 this afternoon.

More reading

• ASX 200 sinks 1.3%: Big four banks drag ASX lower & Altium issues sales warning
• These 10 ASX 200 shares have fallen the most over the last year
• Carsales share price down 26% since February. Is it now a good buy?
• These were the top 10 ASX 200 shares over the last year
• Brokers may be upgrading this ASX stock even as it delivered a plunge in profits

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

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ASX dividend shares have had a rollercoaster ride in 2020. Some of the highest paying income shares have been smashed as coronavirus concerns have taken hold.

However, that doesn’t mean there aren’t good buying opportunities on the market. Here are 3 ASX dividend kings I think are worth buying and holding forever.

3 ASX dividend shares to buy and hold forever

There are still plenty of uncertain times ahead. No one knows just what the economy will look like by the end of the year, let alone 10 years into the future. As such, I think some defensive exposure in your portfolio could come in very handy.

I like the look of Coles Group Ltd (ASX: COL) shares at the moment. Coles looks to be a top ASX dividend share given its non-cyclical earnings and 2.78% dividend yield. Of course, dividend yields aren’t necessarily stable or reliable at the moment. Still, that doesn’t change the fact that Coles’ earnings are likely to be more stable than most of its ASX 200 peers.

Another ASX dividend share I believe to be in the buy zone is BHP Group Ltd (ASX: BHP). At the time of writing, BHP shares are paying an attractive 6.75%, now that the share price has fallen 18.94% lower in 2020. The mining sector could be vulnerable to the impact of COVID-19 as international trade slows down and demand for iron ore subsides.

However, I think the technical environment isn’t too bad. China’s economy is picking up pace again and the Australian Government could look to infrastructure to kickstart our own economy. On top of that, the Aussie dollar has slumped lower in 2020 which could make exports like iron ore more attractive.

My final ASX dividend share to buy and hold forever is Commonwealth Bank of Australia (ASX: CBA). ASX bank shares are under pressure at the moment with significant impairments and soft earnings. However, CBA remains an important pillar of the Aussie economy and I think it will continue to churn out consistent profits in years to come.

Bank dividend cuts have spooked some investors, but given CBA shares are down 24.73% in 2020, I think they could be a long-term bargain buy right now.

More reading

• UBS picks the real ASX winners from the COVID-19 grocery boom
• ASX 200 sinks 1.3%: Big four banks drag ASX lower & Altium issues sales warning
• 3 safe and strong ASX dividend shares to buy today
• 3 cheap ASX 200 shares for value investors
• These 3 ASX 200 retail shares are absolutely thriving right now

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

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Images of panicked shoppers rushing into the supermarket chains have helped the sector outperform the S&P/ASX 200 Index (Index:^AXJO) during the COVID-19 pandemic.

The question investors are facing is what happens as the paranoia dies down and fears of the sky falling eases.

In other words, are ASX shares in the consumer staples sector about to wake with a bad hangover?

Structural changes

The good news is that changes to consumer behaviour is likely to endure even as world gets the coronavirus disaster under control.

UBS identified three trends that will shape the fortunes of the grocery sector and highlighted the winners and losers from the changes.

Online boom

The big shift to online buying is an easy one to pick. Consumers aren’t only using the web to shop for clothes and electronics, but are embracing online grocery deliveries during the lockdown.

This is unlikely to change post COVID-19. History has shown that once consumers embrace a new channel, they are likely to stick to it as habits are hard to reverse.

Our two largest supermarkets, Coles Group Ltd (ASX: COL) and Woolworths Group Ltd (ASX: WOW), are best placed to benefit from this trend. Competitors Aldi and Metcash Limited (ASX: MTS) aren’t.

Increasing appetite for eating in

The second trend is change in eating occasions. UBS believes Aussies will be eating at home more instead of dining out.

Growing levels of joblessness and closures of restaurants that cannot survive the coronavirus lockdown will keep this trend going over the medium-term, if not longer.

The broker estimated that every 0.1 times increase in at-home cooking frequency equates to around a 1% increase in grocery sales.

Bargain products in vouge

The third trend is the move to value brands. This is again linked to the weakening economy, although UBS thinks premium health products with a clear point of differentiation are well placed to benefit too.

Based on these three lasting changes to spending habits, the broker believes Woolworths, Coles, A2 Milk Company Ltd (ASX: A2M) will be the winners in the sector.

On the flipside, Coca-Cola Amatil Ltd (ASX: CCL) will be a loser as its beverages are aimed at the higher end of the market, while grocery distributor Metcash Limited (ASX: MTS) lacks the online component.

The experts at the Motley Fool have identified other ASX stocks that are likely to outperform in the coronavirus recovery.

Click on the link below to find out what these shares in their free report.

More reading

• 3 safe and strong ASX dividend shares to buy today
• These 3 ASX 200 retail shares are absolutely thriving right now
• 3 high quality ASX shares for a retirement portfolio
• Is the Woolworths share price a buy?
• Buy these 4 ASX shares to survive the pandemic

Motley Fool contributor Brendon Lau has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of A2 Milk, COLESGROUP DEF SET, 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.

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The phrase ‘buy-and-hold’ is often derided as the most basic form of investing in ASX shares. It’s easy to understand and requires little ongoing effort to execute. For these reasons, it’s sometimes ragged upon.

But the ‘buy-and-hold’ strategy has many famous spruikers – including the great Warren Buffett. Buffett even once famously said that his favourite time to sell a share is ‘never’.

So is there merit to this view?

Benefits of buy-and-hold

The main reason so many investors find the buy-and-hold strategy a superior one is due to the fact it bypasses the psychological foibles of being human. See, we’re often our own worst enemies when it comes to investing.

We have a tendency to want to buy more shares if one of our companies goes up in value – and buy even more if it continues to rise.

Conversely, we also have a nasty habit of pushing the sell button when our companies’ share prices fall – especially during a market crash or other kind of panic.

Both of these behaviours violate that most basic law of good investing – buy low, sell high.

And that’s where ‘buy-and-hold’ really helps us out. If you go into investing with a ‘I’ll never sell’ attitude, the likelihood of ‘doing something stupid’ (as Buffett would put it) is far lower.

Another (far greater) benefit of the buy-and-hold approach comes from the magic of compound interest. The best companies in the world are exceptionally good at taking their profits and reinvesting them at high rates of return for even higher profits down the road. That’s partly how CSL Limited (ASX: CSL) was able to grow so fast over the past two decades.

If you buy a company like this, and just hold it over a long period of time, you’ll almost certainly be better off than trying to dip in and out.

Finally, it’s worth noting that buying and selling shares isn’t free. There are transaction fees like brokerage to consider, as well as taxes. Buying-and-holding negates many of these extra burdens – leaving more cash in your pocket at the end of the day.

Risks of buying-and-holding

Of course, no strategy is perfect and this one is no different. Buy-and-hold can be great if you’ve found a winner like CSL. But if you pick a lemon and don’t cut your losses, you can end up losing far more capital than if you got out early. Ergo, buy-and-hold only works with winners (and arguably index funds).

Foolish takeaway

The buy-and-hold strategy is one that I think has a lot of merit, and one I employ myself to a degree as an investor. However, it’s not an excuse to be apathetic with your shares. Buying-and-holding a company into the ground can be a costly mistake. You still have to make sure your company is ahead of the game and has what it takes to stay ahead!

More reading

• In a post-COVID world, could Australia be the next superpower?
• ASX 200 Weekly Wrap: New ASX bull run continues
• 3 of the best ASX 200 shares to buy and hold for 10 years
• Why I’d buy and hold CSL shares forever
• How to find winning ASX shares in a recession

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.

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At lunch on Tuesday the S&P/ASX 200 Index (ASX: XJO) is on course to give back Monday’s gains and more. The benchmark index is currently down 1.3% to 5,389.9 points.

Here’s what has been happening on ASX 200 today:

Big four banks drag market lower.

Australia’s big four banks are acting as a major drag on the ASX 200 on Tuesday. All four banks are trading notably lower at lunch, with National Australia Bank Ltd (ASX: NAB) leading the way with a 2.5% decline. The best performer is the Commonwealth Bank of Australia (ASX: CBA) share price with a 1% decline ahead of its third quarter update.

Altium update.

The Altium Limited (ASX: ALU) share price has come under pressure on Tuesday after the electronic design software company warned that it could fall short of its aspirational goal of US$200 million in revenue in FY 2020. Altium has blamed the economic and social impacts of the coronavirus lockdowns on this. It expects these tough trading conditions to impact its performance in the final quarter of the financial year. Altium remains committed to achieving its 50,000-subscriber target for the full year.

Travel shares tumble lower.

After a couple of days of stellar gains, Australian travel shares have come under pressure and are tumbling lower. The likes of Corporate Travel Management Ltd (ASX: CTD), Flight Centre Travel Group Ltd (ASX: FLT), and Webjet Limited (ASX: WEB) are all down at least 5% at lunch. Investors were buying their shares on Friday and Monday amid hopes the easing of lockdowns would boost their recoveries.

Best and worst ASX 200 shares.

The CSR Limited (ASX: CSR) share price is the best performer on the ASX 200 with a gain of almost 9%. Investors have been buying the building products company’s shares after a better than expected full year result. The worst performer has been the Virgin Money UK (ASX: VUK) share price with a 9% decline. Weakness in the banking sector appears to be weighing on the British bank’s shares.

Returns as of 7/4/2020

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

More reading

• These 10 ASX 200 shares have fallen the most over the last year
• Why Altium, ELMO, Suncorp, & Webjet shares are sinking lower
• Why CSR, Kogan, Premier Investments, & ResMed shares are storming higher
• Is the Webjet share price a buy right now?
• Carsales share price down 26% since February. Is it now a good buy?

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The last year has been tough. We’ve had bushfires, floods, and now coronavirus. The S&P/ASX 200 Index (ASX: XJO) is down 14% from this time a year ago.

We take a look at the 10 ASX 200 shares that have fallen the most over the last 12 months. 

Southern Cross Media Group Ltd (ASX: SXL)

Shares in Southern Cross Media Group have fallen 89% over the past year as advertising markets have taken a turn for the worse. The radio broadcaster recently completed a $169 million equity raising. Funds from the raising will be used to reduce debt. 

Southern Cross cancelled its FY20 interim dividend and has announced no final dividend will be paid. Advertising revenue for the 9 months to 31 March 2020 was down 10% compared to the prior corresponding period. Q4 FY20 and Q1 FY21 advertising revenues are expected to be materially impacted by COVID-19 and be down 30% or more on the prior corresponding periods. 

Pilbara Minerals Ltd (ASX: PLS)

Shares in Pilbara Minerals are down 71.6% from this time a year ago. The lithium and tantalum producer has suffered as lithium prices have declined since mid last year. Lithium was trading at above CNY75,000/tonne last year but has since dropped to below CNY45,000/tonne. 

Pilbara is pursuing a moderated production strategy. The company is focused on matching production and available stocks to customer demand, with a view to minimising investment in working capital. Final tonnes shipped for the March quarter were at the lower end of sales guidance. 

Flight Centre Travel Group Ltd (ASX: FLT)

Flight Centre shares have fallen 70.8% over the past year, with the majority of those falls since the coronavirus outbreak. In March 2020, Flight Centre’s total transaction value was just 20-30% of normal levels. The very low revenue environment is expected to continue in the short term. 

Flight Centre has announced the closure of more than 50% of leisure shops globally, including more than 40% of Australian leisure outlets. 6,000 support and sales staff have been stood down, or in some cases, made redundant. 

The company undertook a $700 million equity raising last month. Funds will be used to ensure it has the balance sheet flexibility and liquidity to manage through a prolonged period of disruption to the travel industry.  

Webjet Limited (ASX: WEB)

Webjet is another victim of the coronavirus pandemic with shares down 70.6% over the past year. The travel company undertook a $346 million equity raising last month to strengthen its balance sheet. Proceeds from the raising are expected to provide for operating costs and capital expenditure through to the end of 2020. 

A cost reduction program has been implemented to mitigate near term financial impacts. This includes redundancies, a reduction in staff working hours, and a freeze on all non-essential spending. Cash flow savings of around $13 million a month are expected. 

G8 Education Ltd (ASX: GEM)

Shares in G8 Education have dropped 65.7% over the past year. G8 Education runs more than 470 early learning centres across Australia. Under the Federal Government’s Early Childhood Education and Care Relief Package, the government will make weekly payments to G8 equivalent to 50% of each centre’s fee levels prior to the impact of COVID-19. 

G8 Education undertook a $301 million equity raising in April to provide additional liquidity. It will also strengthen the balance sheet to position the company for further growth opportunities during the recovery phase. 

Unibail-Rodamco-Westfield (ASX: URW)

Unibail-Rodamco-Westfield shares have fallen 63% since this time last year. The shopping centre operator has suffered due to lockdowns in Europe which have impacted its properties in the region. 

Lengthened lockdowns mean conventions and exhibitions remain on hold, and foot traffic at shopping centres is down. Many retailers are seeking rent reductions from landlords as coronavirus sees them facing plummeting revenues. Unibail-Rodamco-Westfield may see lower rental revenue from its properties as the crisis continues. 

oOh!Media Ltd (ASX: OML)

Shares in oOh!Media are down 62.9% from this time last year. The company has been a victim of weak advertising markets which have been hit hard by coronavirus. oOh!Media operates a network of more than 37,000 billboards in public locations including airports, train stations, bus stops, retail centres, and universities. 

With public movement slowing due to the spread of coronavirus, oOh!Media’s assets stand to lose out on views. Outdoor advertising is likely to suffer as lower foot traffic means lower audience levels. Additionally, clients have been slowing advertising spend as the economic impacts of the virus take hold. 

Oil Search Limited (ASX: OSH)

Oil Search shares have fallen 59.8% over the past year. The oil and gas producer has suffered from declining oil prices which fell from above US$60 a barrel earlier this year to below US$0 recently.

Oil Search’s March 2020 quarter revenue was down 20% on the December 2019 quarter despite a 5% increase in production. Revenue was impacted by a 13% fall in sales and 20% lower oil prices. 

Whitehaven Coal Ltd (ASX: WHC)

Shares in Whitehaven Coal have dropped 58.5% from this time a year ago. The miner recently downgraded its coal sales target for the second time and ruled out investing in mine expansion due to volatile financial markets. 

Coal sales were down in the March quarter. Equity coal sales declined 19% on the prior corresponding period. Managed coal sales were down 22%. Saleable coal production also fell during the quarter, down 15%.

Whitehaven has 3 major development projects under consideration which would expand production over the next decade. The company has announced it will not make financial investment decisions on the projects this year due to volatile financial market conditions.  

Virgin Money UK PLC (ASX: VUK)

Virgin Money shares are down 58% over the past year. The company offers credit cards, home loans, superannuation and insurance products, including travel insurance. Sales of its travel insurance products have no doubt declined and will remain depressed for the foreseeable future. Investors are likely also concerned about the prospect of rising defaults on Virgin’s credit card and loan offerings. 

In the meantime, those out of work may need to use their credit cards to meet basic living expenses, with no clear way of meeting repayments. Many of the newly unemployed will also have entered the coronavirus crisis with credit card debt, which they now may struggle to repay. 

More reading

• Why Altium, ELMO, Suncorp, & Webjet shares are sinking lower
• Is the Webjet share price a buy right now?
• Carsales share price down 26% since February. Is it now a good buy?
• These were the top 10 ASX 200 shares over the last year
• Brokers may be upgrading this ASX stock even as it delivered a plunge in profits

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 Webjet Ltd. The Motley Fool Australia has recommended Flight Centre Travel Group Limited and oOh!Media Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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In late morning trade the S&P/ASX 200 Index (ASX: XJO) is on course to end its winning streak. At the time of writing the benchmark index is down 1.4% to 5,383.6 points.

Four shares that have fallen more than most today are listed below. Here’s why they are sinking lower:

The Altium Limited (ASX: ALU) share price is down 4% to $35.32. This morning the electronic design software company warned that it could fall short of its aspirational goal of US$200 million in revenue in FY 2020. This is because economic and social impacts of the coronavirus lockdowns are likely to impact its performance in the final quarter of the financial year. Altium remains committed to achieving its 50,000-subscriber target for the full year.

The ELMO Software Ltd (ASX: ELO) share price is down 10% to $7.08. This morning the cloud-based human resources and payroll software provider successfully completed its fully underwritten $70 million institutional placement. ELMO raised the funds at $7.00 per new share, representing an 11.5% discount to its last closing price. The proceeds will primarily be used for organic growth initiatives and to fund acquisition opportunities. ELMO will now push ahead with its $20 million share purchase plan.

The Suncorp Group Ltd (ASX: SUN) share price has tumbled 5% lower to $8.79. The catalyst for this decline may have been a broker note out of Morgan Stanley. In response to its trading update, the broker has retained its underweight rating and cut the price target on its shares to $8.10. It notes that Suncorp is facing a number of headwinds right now.

The Webjet Limited (ASX: WEB) share price has fallen 7% to $3.25. Today’s decline appears to be down to profit taking after some sensational gains on Friday and Monday. Webjet and other travel shares zoomed higher in response to the government’s plan to reopen Australia.

More reading

• Is the Webjet share price a buy right now?
• 3 ASX tech shares to buy now for long-term returns
• Altium share price on watch after warning of tough trading conditions
• Is it time to invest in shares or wait on the sidelines?
• In a post-COVID world, could Australia be the next superpower?

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 and recommends Elmo Software. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. The Motley Fool Australia owns shares of Altium. The Motley Fool Australia has recommended Elmo Software. 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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In late morning trade the S&P/ASX 200 Index (ASX: XJO) is on course to give back all of Monday’s strong gains. At the time of writing the benchmark index is down 1.25% to 5,392.4 points.

Four shares that are not letting that hold them back are listed below. Here’s why they are storming higher:

The CSR Limited (ASX: CSR) share price has jumped 9.5% to $3.70. Investors have been buying the building products company’s shares after the release of its full year results. Although CSR delivered a 25.8% decline in underlying net profit to $134.8 million, this was better than the market was expecting. Furthermore, the company revealed that trading conditions have remained reasonably steady in the first six weeks of FY 2021.

The Kogan.com Ltd (ASX: KGN) share price is up 6.5% to $8.90. This follows the release of a business update from the ecommerce company this morning. During the month of April, Kogan’s sales grew by more than 100% compared to the prior corresponding period. Things were even better in respect to profits. Its gross profit grew more than 150% and its adjusted EBITDA increased by more than 200% during the month. This was despite its biggest monthly investment in marketing during the period.

The Premier Investments Limited (ASX: PMV) share price is up 2% to $15.75 following the release of a business update. According to the release, Premier Investments will reopen the balance of its Australian stores later this week. This will be a positive as its total sales for the six weeks to May 6 were down 74% on the prior corresponding period. The store closures were partially offset by a 99% jump in online sales.

The ResMed Inc. (ASX: RMD) share price is up 5.5% to $26.14. This follows a strong gain by its NYSE-listed shares during overnight trade. Investors may be betting on the company’s ventilator sales remaining strong for some time to come because of the pandemic and potential second waves.

More reading

• Premier Investments share price higher after announcing store reopenings and online sales surge
• These were the top 10 ASX 200 shares over the last year
• Kogan share price jumps after doubling its sales in April
• Brokers may be upgrading this ASX stock even as it delivered a plunge in profits
• In a post-COVID world, could Australia be the next superpower?

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

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Is the Webjet Limited (ASX: WEB) share price a buy? Investors certainly thought so yesterday when it jumped around 20%.

A bit of the gloss has been taken off as Webjet has fallen back a bit this morning, but it’s still up significantly this week.

In-fact, the last few weeks have been very good for the Webjet share price, it’s gone up 49% since 22 April 2020.

So what next for Webjet? It hasn’t really said much since the capital raising at the start of April 2020. The company raised around $350 million which is being used to strengthen the balance sheet due to the travel restrictions that are in place globally due to the coronavirus.

The capital raising proceeds are expected to be sufficient to provide for the operating costs and capital expenditure through to the end of 2020 even if severe travel restrictions continue. Despite being cashed up, Webjet is working on cost reductions where it can.

What’s the bull case for the Webjet share price?

I think there are two key points why the Webjet share price could continue to be a good performer over the rest of 2020.

The first is that the restrictions are lifting much earlier than expected. Whilst normal travel isn’t on the agenda yet, particularly international travel, the possibility of domestic travel has been brought forward with other restrictions ending. I think that’s very promising that bookings could start again sooner rather than later.

I believe the second point to consider is how Webjet delivers its service. It’s an online-only offering. It doesn’t rely on a large physical network of travel agent stores to sell services. The online model means it has lower costs and can offer a cheaper service than many of its competitors. This might be very important for cost conscious customers. Webjet’s global earnings and product lines may mean it can perform well when things start returning to normal.

How much earnings can Webjet generate over the next 12 months? Will it even be profitable? These are obviously important for the Webjet share price. I don’t know the answer to those questions, but it now seems very unlikely that going bust is on the cards.

Is it a buy today?

It’s unknowable whether there will be a second wave of infections. Are there lots of Aussies wanting to go on a (domestic) holiday as soon as they can?

At this share price, Webjet is still priced very cheaply in a scenario where domestic travel rebounds strongly. I think Webjet could be a high-risk, high-reward option today with a multi-year investment time in mind. Restrictions are lifting and that could help Webjet get back to some sort of ‘normal’. 

More reading

• Is it time to invest in shares or wait on the sidelines?
• ASX 200 starts the week strongly, up 1.3%
• Webjet share price jumps 25%: Is it good value?
• ASX 200 storms 1.2% higher: Cochlear reports 60% sales decline, Webjet jumps 22%
• ASX tourism shares on watch as government flags easing of coronavirus restrictions

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

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