Tag: Motley Fool Australia

It has been another busy day of quarterly and full year updates.

Today we have seen the likes of St Barbara Ltd (ASX: SBM) and IGO Ltd (ASX: IGO) release their quarterly updates (here and here) and will see Rio Tinto Limited (ASX: RIO) release its full year results after the market close.

Three other updates that you might have missed are listed below. Here’s how they are performing:

Champion Iron Ltd (ASX: CIA)

The Champion Iron share price is up 2.5% to $2.83 after the release of its first quarter update. The Canada-based iron ore miner revealed quarterly revenue of $244.6 million and EBITDA of $127.7 million. While these were down from the prior corresponding period, it was driven by lower production after being forced to ramp down during the pandemic. Nevertheless, this didn’t stop Champion Iron from posting record quarterly net income of $75.6 million.

Life360 Inc (ASX: 360)

The Life360 share price is down almost 2% to $3.25 following the release of its second quarter update. The family-focused app provider reported annualised monthly revenue (AMR) of US$77.9 million at the end of June, which was up 26% year-on-year. In addition to this, Life360 delivered positive quarterly operating cash flow of US$0.7 million, compared with a cash outflow of US$6.2 million in the March 2020 quarter. However, one disappointment was a 2.8 million reduction in its global monthly active user base to 25.2 million. Management advised that this reflects COVID-19 impacts.

Nuchev Ltd (ASX: NUC)

The Nuchev share price is in a trading halt today after launching a $15 million equity raising along with the release of its fourth quarter update. During the quarter the company reported strong sales of its Oli6 goat-milk infant formula and nutritional products. This led to Nuchev delivering a 98% increase in FY 2020 revenue to $17.8 million. While this was strong, it did fall ever so slightly short of its prospectus forecast. Another negative was that management has warned that third quarter pantry filling and panic buying is unwinding and is expected to continue into the first quarter of FY 2021. It also notes that lower international student numbers are restricting the traditional Daigou channel volume.

More reading

• This ASX tech share has my attention
• Why Alumina, BWX, Life360, & Perpetual shares are charging higher
• Why I’d buy and hold a2 Milk shares until 2025

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 3 quarterly updates you might have missed: Champion Iron, Life360, & Nuchev appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/306aTGN

‘Warren Buffett shares’ on the ASX could be the best way to invest right now.

There are certainly some great growth shares that could be worth investing for the long-term like Bubs Australia Ltd (ASX: BUB) and Altium Limited (ASX: ALU). However, for various reasons (including very low interest rates), businesses with lots of potential growth are being also being priced highly.

But there are some shares that still seem like they’re trading at reasonable valuations to me, outside of the tech sector. Warren Buffett’s share picks that made him big returns over the decades weren’t exactly pure tech plays.

But don’t forget, any decent business these days is using technology to make their business more efficient. From automated trucks for big miners like BHP Group Ltd (ASX: BHP) to the tech systems used by Transurban Group (ASX: TCL) to manage the tolls. Technology can still be involved in other industries.

If Warren Buffett invested in ASX shares, I think he’d be very interested in the below two businesses.

Warren Buffett shares: Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) and Brickworks Limited (ASX: BKW)

Both of these businesses are closely linked to each other.

Soul Patts owns 44% of Brickworks and Brickworks owns 39.4% of Soul Patts. This partnership goes back decades to a time when corporate raiders were more common. If they both owned big chunks of each other then it would hopefully stop aggressive investors trying to come in and split them up into pieces.

Soul Patts is a diversified investment conglomerate and I’d describe Brickworks a diversified property business. I think they’re both ‘Warren Buffett shares’ because of their long-term focus, aligned management and the aim of being quality.

Brickworks

Brickworks is best known as a building product business. In Australia it has a number of key divisions including Austral Bricks, Bristle Roofing, Austral Masonry and Austral Precast. Each of these businesses are among the leading suppliers in their respective markets.

Brickworks also has a USA division. The company made three acquisitions over the past couple of years and now it’s the leading brickmaker in the north east of the US.

I’m very excited by Brickworks’ industrial property trust. COVID-19 has caused properties involved with logistics and ecommerce to be in even higher demand. There are currently two large distribution warehouses being built for Coles Group Limited (ASX: COL) and Amazon. Once complete, the rental income should rise and the gross assets of the trust is expected to go above $3 billion.

I think Brickworks is a Warren Buffett share not only due to everything I’ve already mentioned, but also because Clayton Homes is one of Berkshire Hathaway’s larger businesses – it shows he likes to be involved in property (with the right business).

Soul Patts

Soul Patts could be the best Warren Buffett-like share on the ASX. It operates in a similar way to Berkshire Hathaway. Soul Patts invests in both publically listed and private businesses. Aside from Brickworks, some of Soul Patts’ other major investments include TPG Telecom Ltd (ASX: TPG), Clover Corporation Limited (ASX: CLV), Milton Corporation Limited (ASX: MLT) and Bki Investment Co Ltd (ASX: BKI).

The investment house tries to invest with a contrarian strategy whilst being defensively positioned. Some of its investments include resources and agriculture, which largely have different returns profiles to the normal share market.

The ‘Warren Buffett share’ continues to diversify its portfolio. It will soon supposedly be investing in regional data centres.

I think they’re both pretty cheap

Brickworks looks the cheaper of the two after the COVID–19 decline. If you just take the pre-tax value of the Soul Patts shares and net asset value of the property trust, the rest of Brickworks is essentially free.

At the current Brickworks share price it comes with a grossed-up dividend yield of 5%.

There isn’t a clear net asset discount with Soul Patts like there is with Brickworks. But it does offer more diversification and it has a great dividend growth record – it has increased its dividend every year since 2000.

At the current Soul Patts share price it has a grossed-up dividend yield of 4.4%.

More reading

• 3 ASX 200 shares to buy for the long-term
• Extended jobkeeper: Which ASX shares to buy?
• Got $1,000? You should buy 1 of these 6 ASX shares
• 3 Warren Buffett dividend shares you can buy today
• 2 ASX shares for growth and dividends

Tristan Harrison owns shares of Altium and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Clover Limited. The Motley Fool Australia owns shares of and has recommended Brickworks, BUBS AUST FPO, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Transurban Group. 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 2 cheap Warren Buffett shares could be top picks right now appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/39BJAXU

The Suda Pharmaceuticals Ltd (ASX: SUD) share price has soared 207.4% today, at the time of writing. The surge came following the company’s announcement that its Zolpimist product has been approved by the TGA (Therapeutic Goods Administration). ZolpiMist is an oral spray for the treatment of insomnia. 

In an investor presentation released by Suda Pharmaceuticals earlier this month, the company estimated the market for insomnia treatments will be approximately US$4 billion by 2026. Furthermore, according to the National Institutes of Health, as reported by Sleep Foundation, an estimated 30% of the general population complains of sleep disruption and 10% have associated symptoms during the day.

TGA approval

The approval follows an announcement from Suda Pharmaceuticals on 12 May 2020 outlining its decision to register a supplemental active pharmaceutical ingredient (API) supplier and manufacturer which required an amendment to an existing TGA submission. Therefore, today’s decision will benefit the company by reducing the costs of raw material and its finished product to create increased value. 

According to the market release today, the TGA approval was achieved ahead of a projected Q4 2020 deadline. The decision enables Suda’s Zolpimist product to be sold in Australia, allows more competitive pricing and supports further submissions across more locations. 

Suda Pharmaceuticals CEO and Managing Director, Dr Michael Baker, commented:

“The TGA submission was a combined effort by Suda’s technical team as well as our regulatory consultant, Pharma to Market. Obtaining the approval indicates the calibre of our staff and is also a key benefit to our partners for ZolpiMist. We are delighted by the outcome and look forward to seeing the commencement of commercial sales in the foreseeable future”.

Other recent announcements

Earlier this month, Suda Pharmaceuticals raised $3.56 million in an entitlement offer. The purpose of the funds was to assist with the development of the company’s anagrelide technology, which is used in the treatment of cancer, and its OroMist platform. The funds are also earmarked to be used for potential acquisition of new assets and general working capital.

About the Suda Pharmaceuticals share price

According to its website, Suda Pharmaceuticals is a leader in reformulating and delivering medications through the use of oral sprays. It argues patients typically take medication as pills, tablets or capsules yet less than 25% of the medication is absorbed into the bloodstream. This compares to up to 95% absorption through a simple spray into the mouth.

The company’s product, ZolpiMist, is also FDA (Food and Drug Administration) approved in the United States. 

At time of writing the Suda Pharmaceuticals share price is trading at 8.3 cents.

More reading

• Could these small cap ASX shares be the next Afterpay?
• Warning! ASX investors might be turning away from the share market
• 3 quarterly updates you might have missed: Champion Iron, Life360, & Nuchev
• These 2 cheap Warren Buffett shares could be top picks right now
• Here’s why the AP Eagers share price has motored 11% higher today

Motley Fool contributor Matthew Donald 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 Suda Pharmaceuticals share price soars 200% on TGA approval appeared first on Motley Fool Australia.

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

The AP Eagers Ltd (ASX: APE) share price is up 11.63% to $7.87 at the time of writing, following the release of the chair and CEO’s addresses to shareholders. Both addresses will be delivered at the AP Eagers AGM today.

What was in the announcement?

The addresses included a business update about the company, including an update about the company’s results for the half year to 30 June 2020.

In his address, AP Eagers CEO Martin Ward reported that the company expects underlying profit for the half year to June 30 of $40.3 million, a 23.6% decline on the prior corresponding period. The company announced that its formal results would be released after 26 August, with the board confident that underlying profit will match its current expectation.

Commenting on the results, Ward stated:

The Board believes this to be a resilient operating performance particularly as the first quarter was tracking above last year and all of the decline was experienced during April and May – the peak impact of COVID-19 restrictions up to this point. Importantly those challenging months were followed by a rebound in June, supported by an opening of the economy and confidence in the Government stimulus measures.

Within the address announcement, AP Eagers also revealed it had achieved permanent cost reductions of $78 million per year in the previous 3 months.

The company had $633.9 million of liquidity available at 30 June 30 and its net debt decreased to $7.6 million at June 30, down from $315.8 million at 31 December 2019.

About the AP Eagers share price

AP Eagers is a car dealership operator with over 100 years of history. The company has more than 200 car dealerships and also sells new and used buses and trucks. AP Eagers has a large property portfolio worth over $300 million.

Recently, AP Eagers sold its AHG refrigerated logistics business to Anchorage Capital Partners for $75 million. The company absorbed a $20 million accounting loss from the sale.

 The AP Eagers share price is up 214% from its 52-week low of $2.50, however, it is down 20.9% since the beginning of the year. The AP Eagers share price is down 27.67% since this time last year. 

More reading

• ASX 200 flat: Big four banks higher, St Barbara and IGO sinks on Q4 updates
• Why AP Eagers, CIMIC, NAB, & Virgin Money shares are charging higher
• These were the ASX 200’s biggest share gainers last week
• ASX 200 Weekly Wrap: ASX has week of high volatility
• These were the best performing ASX 200 shares last week

Motley Fool contributor Chris Chitty 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 Here’s why the AP Eagers share price has motored 11% higher today appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/30QGTxS

Shares in our big ASX banks are outperforming the broader market after the banking regulator ordered a cap on dividends.

You might have thought that this would send the sector slumping into the red. But the Australia and New Zealand Banking GrpLtd (ASX: ANZ) share price is leading its peers higher with a 2.4% jump during lunch to $18.51.

The Westpac Banking Corp (ASX: WBC) share price and National Australia Bank Ltd. (ASX: NAB) share price are right behind with gains of nearly 2% each.

The Commonwealth Bank of Australia (ASX: CBA) share price, the only bank to report results next month, is 1.2% in the black at $73.07.

In contrast, the S&P/ASX 200 Index (Index:^AXJO) can barely hold its head above water after giving up its morning gains.

Glass half full

What’s keeping the banks afloat if relief. The Australian Prudential Regulation Authority instructed banks today to limit their dividend payout ratio to 50%, according to the Australian Financial Review.

This means CBA is likely to announce a bigger than expected cut to its final dividend, or a large increase, depending on which side of the fence you sit.

You see, brokers are split on whether CBA will pay a dividend this time. Those who do think around a 50% cut from the $2.31 a share final dividend it paid in 2019 sounds about right.

The dividend “haves” and “have-nots”

But there are some who thought CBA would follow ANZ’s and Westpac’s lead in deferring their dividends altogether.

If CBA were to limit its payout ratio to 50%, it would imply a $1 a share distribution, according to the AFR.

That’s a few cents under what the first broking group is forecasting but one full buck ahead of the second group of pessimists. It’s clear which group investors were believing.

ASX bank dividends to return

This also explains why ANZ and WBC are bouncing harder. APRA advised the banks not to pay dividends in April and its new instructions clears the way for both to restart payments in November, when they hand in their full year results.

NAB was the only big four bank to deviate from APRA’s advice three months ago to declare an interim dividend. But even then, its payment was chopped by two-thirds to a paltry 30 cents a share.

Worst has passed for bank profits

Another reason why investors are welcoming APRA’s latest dividend ruling is because it shows a growing sense of confidence in the broader Australian economy.

As the AFR reported, APRA’s chair Wayne Byres said “although the environment remains one of heightened risk, we now have a stronger sense of how Australia’s economy and financial institutions are being impacted by COVID-19”.

Pity his words haven’t elicited the same level of enthusiasm from the other ASX sectors today.

More reading

• Xero and 1 other ASX growth share to watch in August
• APRA eases dividend restrictions, ASX bank shares rally
• ASX 200 flat: Big four banks higher, St Barbara and IGO sinks on Q4 updates
• Why the IGO share price is the worst performer on the ASX 200 today
• Why AP Eagers, CIMIC, NAB, & Virgin Money shares are charging higher

Motley Fool contributor Brendon Lau owns shares of Australia & New Zealand Banking Group Limited, Commonwealth Bank of Australia, National Australia Bank Limited, and Westpac Banking. Connect with me on Twitter @brenlau.

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 big banks stocks outperform even as APRA caps dividends appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3hK8VBV

Tech shares. They’re hot right now and continue to climb.

Whether its Afterpay Ltd (ASX: APT) surging in Australia or Amazon.com Inc. (NASDAQ: AMZN) in the United States, global technology investors are having a field day.

However, investors have to be careful in such a high-growth area. While the WAAAX ASX tech shares have outperformed recently, there is a lot of future expected growth being priced in.

As we approach the August earnings season, let’s take a look at the pros and cons of investing in WAAAX or FAANG shares.

Should you buy tech shares right now?

Investors often choose ASX dividend shares for their consistent payouts versus uncertain future capital growth. However, 2020 (and the coronavirus pandemic) has moved the goalposts, so to speak.

That means now could be a good time to invest in ASX tech shares.

Despite already lofty valuations, the Afterpay share price has continued to climb. It’s a similar story for other WAAAX shares like Xero Limited (ASX: XRO) and Altium Limited (ASX: ALU).

There is a lot of cheap money looking for a good home right now and that’s driving up demand for shares right across the market.

However, we’re still seeing strong operational and financial growth numbers from these companies, which is good news for shareholders who have bought and held.

It’s not just happening in Australia, either. We’ve seen the Amazon share price storm higher while the Apple Inc. (NASDAQ: AAPL) share price is up 26.3% this year.

Many investors smarter and with more knowledge than myself think buying tech shares is a good idea right now. If that’s the case, what’s the best way to do it on the ASX?

How to invest in ASX tech shares today

The most obvious way is to invest directly in ASX tech shares. That means simply buying Afterpay or Xero shares through a broker and taking a direct ownership stake.

That’s the best way to get pure exposure to the company of your choice. You can also look at exchange-traded funds (ETFs) for lower costs and more diversification.

For ASX tech shares, you might want to look at BetaShares S&P/ASX Australian Technology ETF (ASX: ATEC). That aims to track the S&P ASX All Technology Index (ASX: XTX) and invests in top tech shares like Afterpay and Xero.

For international exposure, the ETFS FANG+ ETF (ASX: FANG) may fit the bill. The ASX tech ETF’s top holdings include top US tech stocks like Amazon, Apple and Tesla Inc (NASDAQ: TSLA).

Foolish takeaway

No one knows whether now is a good time to buy tech shares. In hindsight, mid-March was a great time to buy but so too was 2009.

If you’re bullish on tech and a long-term investor, the short-term price fluctuations shouldn’t cloud your judgement on the power of long-term returns.

More reading

• Xero and 1 other ASX growth share to watch in August
• Earnings season: What’s ahead for the Afterpay share price?
• Are ASX tech shares the only way to protect your portfolio against the coronavirus?
• 3 of the best ASX tech shares to buy and hold until 2030
• WAAAX shares see mixed recovery from COVID-19

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Ken Hall 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 Altium, Amazon, Apple, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Xero and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Amazon and Apple. 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 WAAAX or FAANG? Which ASX tech shares to buy in 2020 appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/30QGPOE

Unless you’ve just emerged from hibernation — in which case, good morning! — you’ll know that most retailers are struggling, to say the least…

Here’s an excerpt from an article in The New Daily, titled ‘Retail apocalypse: Bricks-and-mortar stores are disappearing’:

Retailers across Australia are shutting up shop, as rents skyrocket and time-poor, dollar-conscious consumers opt for the internet over their local high street.

Over the next year, 1.3 per cent of consumer goods retailers are expected to close as physical stores struggle to compete with the low prices, vast range and ease of online shopping.

Meanwhile, once-mighty department stores are in the midst of a mass extinction, with only one of the two major players, Myer and David Jones, expected to survive.

Skyrocketing rents aside, you’d be forgiven for thinking this was penned after the onset of the COVID-19 lockdowns and social distancing.

Not so.

Pandemic hits ASX retail shares when they’re down

In fact, the article was published on 21 August 2019. That’s almost 7 months before the coronavirus saw many physical stores in Australia forced to shut their doors or sharply limit the number of customers allowed inside at any given time.

All the negative ramifications associated with controlling the pandemic hit these retailers when they were already wobbly.

Over in the United States, big name brands including JCPenney and Neiman Marcus are just some of the brick-and-mortar focused retailers that have already filed for bankruptcy since the onset of the global shutdowns.

Here in Australia, swimwear brand Seafolly, with 44 stores across the country, entered voluntary administration at the end of June, citing COVID-19 as the final straw. And with the renewed lockdowns in Victoria and possible return to more stringent distancing measures in New South Wales and other states, even some of the most successful traditional retailers are struggling.

Harvey Norman Holdings Limited (ASX: HVN), for example, has seen its share price drop 13% year-to-date.

Myer Holdings Ltd (ASX: MYR) has fared far worse, with Myer shares falling 58.33% so far in 2020.

But not every retailer is feeling the pain.

No social distancing required

According to data from the Bank of America, US Department of Commerce and ShawSpring Research, e-commerce in the US grew from 16% to reach 27% of total retail sales in March and April of 2020.

That’s almost a doubling of its market share in only 2 months. And it’s seen stocks like the US$1.5 trillion (AU$2.1 trillion) Amazon.com, Inc. (NASDAQ: AMZN) gain an astounding 58.1% since 2 January.

In Australia, the surge in online shopping has been a similar boon for a select group of retailers with strong e-commerce platforms. Here are 2 I think you should consider adding to your own portfolio.

First, there’s Carsales.Com Ltd (ASX: CAR). The online car retailer‘s share price plunged 45.2% from 12 February to 23 March before making a sharp recovery. It’s gained 78.6% since that low. Year-to-date, the Carsales share price is up 11.4%. And this comes during Australia’s first recession in 29 years!

The fact of the matter is most Australians need cars. Even if you live in one of the major cities, you need a car to get outside the sprawl. And the impact of COVID-19 on people’s comfort using public transportation is likely to last long beyond the virus itself.

Those predicting the death of the car (be it electric, petrol, or what have you) will almost certainly be proven wrong. Even the trendy concept of ‘shared cars’ is unlikely to bounce back quickly. In a world rocked by the novel coronavirus and gripped by fears of future pandemics, it’s likely many drivers will stick to the comfort of their own vehicle.

Second, we have Kogan.com Ltd (ASX: KGN). The Kogan share price is up a whopping 119.4% in 2020.

Yes, that means it would have been great to get into the stock at the beginning of the year. But if you’re playing the long game, which I recommend, then I think the Kogan share price could have a lot more growth ahead. Even under some of the rosier scenarios, it’s likely Australians will be dealing with some form of social distancing or another for at least another 12 to 18 months. (Don’t shoot the messenger!)

And people are creatures of habit. When all the virus-related restrictions are finally lifted, and they will be eventually, many consumers will keep buying most of their stuff online.

The e-commerce trend is already well established. And it’s only likely to grow from here.

More reading

• 3 of the best ASX tech shares to buy and hold until 2030
• Latest ASX entrant mixes BNPL with eCommerce
• All Technology Index celebrates 6 months with stunning outperformance
• Is now the time to sell your ASX shares?
• Where to invest $100,000 into ASX shares

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Bernd Struben 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 Amazon. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Kogan.com ltd and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool Australia has recommended Amazon, carsales.com Limited, and 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 Why you should buy into this booming ASX retail sector today appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/307ZndZ

The S&P/ASX 50 index may not be as well-known as the S&P/ASX 200 Index (ASX: XJO), but it is arguably just as important.

This illustrious index is home to 50 of the largest companies on the Australian share market. These include household names and companies that are true blue chip shares.

While not all shares on the index are necessarily in the buy zone, I think there are a few that could be.

Here’s why I would buy these two outstanding ASX 50 shares:

CSL Limited (ASX: CSL)

My favourite ASX 50 share is biotherapeutics giant CSL. I think it is one of the best options on the index due to its high quality CSL Behring and Seqirus businesses. I believe these businesses are well-placed to deliver strong sales and earnings growth over the next decade.

This is thanks to their leading products and lucrative research and development (R&D) pipelines. In respect to the latter, in FY 2019 CSL invested US$832 million in its R&D activities and a similar level of investment is expected this year. I believe these investments will allow the company to maintain its market-leading position and underpin solid profit growth for the foreseeable future.

Telstra Corporation Ltd (ASX: TLS)

Another ASX 50 share to consider buying is this telco giant. I’ve been very impressed with the progress of Telstra’s T22 strategy. This game-changing strategy is stripping out costs and simplifying its business, making Telstra a leaner and more nimble business.

In addition to this, the NBN headwind is starting to ease and peak pain from the rollout is just around the corner. When this is reached, the drag on its earnings will subside and earnings growth will become a lot more achievable. Other positives that look set to be supportive of growth in the coming years are the arrival of 5G internet and rational industry competition. In light of this, its lucrative infrastructure assets, and its attractive valuation, I think now would be an opportune time to invest.

More reading

• Nanosonics and 2 other ASX healthcare shares to buy
• Are ASX tech shares the only way to protect your portfolio against the coronavirus?
• The TPG share price has fallen 9% in a month. Time to buy?
• Afterpay and Immuron were among the most traded shares on the ASX last week
• Pushpay and 1 other 5-star ASX share to buy 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 CSL Ltd. 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 2 must-buy ASX 50 shares to snap up today appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2P1FCi3

Many of Australia’s top brokers have been busy adjusting their financial models again, leading to the release of a large number of broker notes this week.

Three broker buy ratings that have caught my eye are summarised below. Here’s why brokers think these ASX shares are in the buy zone:

Corporate Travel Management Ltd (ASX: CTD)

According to a note out of Ord Minnett, its analysts have upgraded this travel company’s shares to a buy rating with an improved price target of $12.97. The broker believes the company has ample liquidity to ride out the pandemic. Which is something many of its competitors do not have. As a result, it appears to believe it could come out of the crisis in a stronger position. While I do think that Ord Minnett makes some great points, I’d prefer to wait for the crisis to pass before considering an investment in travel shares.

Elders Ltd (ASX: ELD)

Analysts at Goldman Sachs have initiated coverage on this agribusiness company’s shares with a conviction buy rating and $13.65 price target. According to the note, the broker is a fan of Elder’s 8-point plan for FY 2021 to FY 2023. This plan aims to win market share, expand its margins, and strengthen its core operations. Goldman expects this to result in a 16% compound annual growth rate for its earnings per share from FY 2019 through to FY 2022. I agree with the broker and think Elders could be worth a closer look.

Temple & Webster Group Ltd (ASX: TPW)

A note out of the Macquarie equities desk reveals that its analysts have retained their outperform rating and lifted the price target on this online homewares retailer’s shares to $8.80. This follows the release of a full year result which was in line with its expectations earlier this week. Macquarie appears confident on the year ahead and notes that its strong balance sheet gives it opportunities to accelerate its growth with acquisitions. I think Macquarie is spot on and Temple & Webster would be worth considering.

More reading

• ASX 200 down 0.4%, Credit Corp and Temple & Webster impress
• Why Credit Corp, Nufarm, Regis, & Temple & Webster shares are jumping higher
• Can the Marley Spoon share price climb even higher?
• Temple & Webster share price hits record high on stellar FY 2020 growth
• Which ASX furniture share has the edge?

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 Temple & Webster Group Ltd. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited. The Motley Fool Australia has recommended Elders Limited and Temple & Webster Group 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 Top brokers have named 3 ASX shares to buy today appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3f8jNrH

Both Coles Group Ltd (ASX: COL) shares and Woolworths Group Ltd (ASX: WOW) shares have been something of a beacon of stability in 2020 so far. With the coronavirus pandemic upending the world this year, it has been a strange and often scary period in which to invest in ASX shares.

Both Coles and Woolworths are consumer staples giants, with customers flocking to the supermarkets like never before in the first few months of the pandemic. This has lead to ASX investors treating both supermarket chains like islands of capital stability in an ocean of uncertainty.

And fair enough too. Both Coles and Woolworths are among the ever-shrinking pool of ASX 50 companies that are unlikely to cut their dividend payments to shareholders in 2020 and beyond for one. Their defensive, consumer staples nature for another is almost certain to keep the companies healthy and profitable under any future circumstances, whatever they may be. We all need to eat and buy household essentials after all. 

But which of these 2 Australian icons is the better buy today? Well, that’s what we’ll be trying to answer.

An age-old question: Coles or Woolies?

Unlike Coles or Woolies shoppers, who might tend to choose whichever supermarket is closest, we as investors can take a holistic view of these companies. So, let’s start with some statistics (always fun).

On market capitalisation, Woolworths is the biggest player in the game – $49.27 billion on current prices, compared to Coles’ $24.24 billion. This does reflect Woolworths’ ownership of the Big W discount chain, as well as the ALH Hotels Group and the Endeavour Drinks business (which includes the bottle shop chains Dan Murphy’s and BWS). In contrast, Coles is more of a one-trick pony, owning just the Coles network of stores, as well as some bottle shop chains of its own (including First Choice Liquor and Liquorland).

But Woolworths still has a larger presence in the overall grocery market. According to a recent Roy Morgan report, Woolworths maintained a 32.9% share of the market over the course of last year, which compares favourably with the 26.6% share of the grocery market Coles commanded. According to the report, this was a 0.7% drop for Woolworths over the previous year and a 1.4% drop for Coles.

What about the Coles and Woolworths share prices?

At the time of writing, Woolworths is trading for $39.01 and Coles for $18.17. Incidentally, the latter is just a touch off Coles’ all-time high of $18.32 that the company recently reset.

These share prices give Woolworths a price-to-earnings (P/E) ratio of 19.42 and a trailing dividend yield of 2.64%. In contrast, Coles is currently trading on a P/E ratio of 20.46 and offers a trailing dividend yield of 2.31%.

So here we can see the market is pricing Coles at a slight premium to Woolies today.

Foolish takeaway

I would say neither Coles nor Woolies is a screaming bargain today. Investors have clearly kept up both companies’ share prices, probably to reflect a ‘stability’ premium they now offer in this uncertain world.

If I had to choose one company, I think I would go with Woolworths. It’s currently offering a greater market share than Coles, has a cheaper price (relative to earnings) and a higher starting dividend yield. It’s also a more diversified company. As such, I think Woolies wins the supermarket wars, for today at least.

More reading

• CBA and 2 more ASX shares to buy and hold forever
• Are ASX tech shares the only way to protect your portfolio against the coronavirus?
• What would deflation mean for your ASX shares?
• Can the Marley Spoon share price climb even higher?
• Why I would buy Coles and these ASX dividend shares today

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of 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.

The post Better buy today: Coles or Woolworths shares? appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/30Zggqn