Tag: Motley Fool Australia

Good value ASX dividend shares are hard to find. With the August earnings season nearly upon us, let’s take a look at which ASX shares are worth considering right now.

3 ASX dividend shares I like in July

Right at the top of the list is Commonwealth Bank of Australia (ASX: CBA).

CommBank has long been a blue-chip ASX dividend share, churning out multi-billion-dollar profits and paying consistent dividends to shareholders.

All of that has changed thanks to the coronavirus pandemic in 2020.

The Australian Prudential Regulation Authority (APRA) wanted banks to reduce their dividend payments amid fears over liquidity and capital adequacy.

With APRA announcing a review of that advice, and the economy delicately poised for recovery, Commonwealth Bank could maintain its strong ASX dividend status.

If bad debts remain low and the bank can protect its net interest margin, we could see a small CommBank dividend announced in August.

Other than the ASX banks, I like the look of JB Hi-Fi Limited (ASX: JBH) right now. The JB Hi-Fi share price is up 16.5% this year despite challenging conditions for Aussie retailers.

Much of JB Hi-Fi’s share price growth has been due to strong sales in March and April.

With plenty of cash, and arguably limited internal reinvestment, JB Hi-Fi could be a strong ASX dividend share this year.

JB Hi-Fi shares are currently yielding 3.4% but I’d be keeping an eye on its 17 August results.

My final ASX dividend share to watch is Transurban Group (ASX: TCL). In my books, Transurban is more of a medium to long-term prospect.

Traffic numbers on its toll roads have been hit hard by coronavirus restrictions. However, that is starting to pick up again which could be good news for the Aussie infrastructure group.

Whilst we’ve seen a shift towards working from home, we’re also seeing a move away from public transport. This means FY2021 and FY2022 could be good ones for Transurban.

I’d tip Transurban’s distributions to dip lower this year. However, if you’re a buy and hold investor, I still think its a good long-term ASX dividend share.

More reading

• ASX 200 Weekly Wrap: ASX has week of high volatility
• 5 simple steps to financial independence
• A top ASX dividend share to buy next week
• Buffett buys more bank shares: Should you?
• 2 off the grid ASX retail shares for higher returns

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

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

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

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

• Myer Holdings Ltd (ASX: MYR) continues to be the most shorted share on the Australian share market despite its short interest easing slightly to 12.1%. Short sellers appear to believe the department store operator will struggle because of the accelerating shift to online shopping.
• Speedcast International Ltd (ASX: SDA) has short interest of 11.7% once again. Short sellers have done very well with this one. The communications satellite technology provider’s shares have been suspended for a few months as it finalises its bankruptcy.
• Webjet Limited (ASX: WEB) has seen its short interest fall week on week to 9.8%. Webjet shares have been among the worst performers on the ASX 200 in 2020 because of the pandemic. Some short sellers don’t appear to believe the worst is over for the company and its shares.
• Inghams Group Ltd (ASX: ING) has 9.5% of its shares held short, which is down slightly week on week. Last week the poultry company’s shares came under pressure after one of its processing plants in Victoria was closed after five employees tested positive for coronavirus. Outside this, there are concerns that its performance in FY 2020 could be impacted by an unfavourable sales mix.
• Nearmap Ltd (ASX: NEA) has seen its short interest rise slightly to 8.3%. Nearmap has come onto the radar of short sellers this year after large churn events led to a guidance downgrade. They may be expecting more churn events because of the pandemic.
• Zip Co Ltd (ASX: Z1P) has entered the top ten with 8.1% of its shares held short. Short sellers may be targeting the buy now pay later (BNPL) provider because of its lofty valuation and a recent rise in bad debts.
• Clinuvel Pharmaceuticals Limited (ASX: CUV) has seen its short interest remain flat at 8%. I suspect that the valuation of this biopharmaceutical company’s shares is the reason for high short interest.
• FlexiGroup Limited (ASX: FXL) has seen its short interest rise to 7.9%. The financial services company has been reporting strong BNPL growth, but there remain questions over the rest of its business.
• Bank of Queensland Limited (ASX: BOQ) has seen its short interest fall to 7.9%. Last week the regional bank lifted its coronavirus provisions and warned that there could be more to come.
• Orocobre Limited (ASX: ORE) has seen its short interest rise again week on week to 7.6%. Short sellers have been going after Orocobre due to ultra-low lithium prices.

More reading

• These were the ASX 200’s biggest share gainers last week
• ASX 200 Weekly Wrap: ASX has week of high volatility
• 3 stellar ASX tech shares I would buy in August
• Here are easy ways to diversify your ASX portfolio
• These were the best performing ASX 200 shares last week

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 Nearmap Ltd. and ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. The Motley Fool Australia has recommended FlexiGroup Limited and Nearmap 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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The Australian share market hit a four month high on Tuesday but slid lower towards the end of the week, with the S&P/ASX 200 (ASX:XJO) ending the week down 0.2%. The market was buoyed early in the week on news around a potential COVID-19 vaccine, but economic data put a dampener on exuberance later in the week. The government announced the extension of its stimulus payments which gave the market continued support, but ongoing increases in COVID-19 cases in Victoria is giving rise to caution. 

The information technology sector finished the week marginally higher with the S&P/ASX All Technology Index (ASX: XTX) up just under 2%. The energy sector also performed well, however industrials and healthcare were down. A number of blue chip shares dropped last week, including CSL Limited (ASX: CSL), which fell 2.3%. But Afterpay Ltd (ASX: APT) was up 3.6% and Newcrest Mining Limited (ASX: NCM) was up 5.6%. So now let’s take a look at last week’s biggest ASX 200 share price gainers. 

Resolute Mining Limited (ASX: RSG)

The Resolute Mining share price gained 17.2% last week to finish the week at $1.36. The gold miner released its June quarterly report and the gold price was also on the rise, closing the week at $2680 per ounce. Resolute poured 107,183 ounces of gold in the June quarter at an all-in sustaining cost (AISC) of US$1,033 per ounce. 

The miner sold 110,660 ounces of gold during the quarter at an average price of US$1,446 per ounce. Resolute Mining had US$88 million cash and bullion at 30 June 2020 and net debt of US$220 million. The company has provided FY20 guidance of 430,000 ounces of gold at an AISC of US$980 per ounce. 

AP Eagers Ltd (ASX: APE)

The AP Eagers share price rose 16.8% last week to close the week at $7.23. AP Eagers is Australia’s oldest listed automotive group. The company represents a diversified portfolio of brands including 19 of the top 20 selling car brands in Australia and 9 of the top 10 selling luxury car brands. The company operates dealerships, many of which are on land it owns, with the balance leased. 

AP Eagers own $332 million of prime real estate in high profile, main road locations across Brisbane, Sydney, Melbourne, Adelaide, and Perth. It sold off an ancillary refrigeration business in June for $75 million, allowing it to focus on its core automotive retailing business. The company has engaged with its landlords in an effort to share the economic burden of Covid-19 and taken action to reduce its cost base. There was no news out of the automotive group last week to prompt the price rise, however the extension in the government’s stimulus program and resulting uplift to the economic outlook no doubt contributed. 

Orocobre Limited (ASX: ORE) 

The Orocobre share price lifted 13.2% last week to finish the week at $3.17.  Lithium prices are at record lows this year but are expected to rally in coming years as demand for electric vehicles increases. Orocobre shares have been rallying since the start of the month, having been slow to recover from the March market correction. Orocobre shares actually hit their low for the year of $1.84 in May, but have since recovered 72%.

Sales in the June quarter were impacted by coronavirus restrictions which hindered the ability of the company to complete sales. Total sales volume for the June quarter was approximately 1,600 tonnes of lithium carbonate at US$4,015 per tonne FOB. While most logistical issues have now been addressed, demand has yet to return to normal as customers delay shipments due to lower production and excess inventory. 

Electric vehicle manufacturers are taking a cautious approach to production given the uncertain economic impacts of COVID-19. Nonetheless, the pandemic has accelerated investment in some jurisdictions which will have medium to long-term benefits with many European countries implementing programs to support the manufacture and use of electric vehicles. 

Silver Lake Resources Limited (ASX: SLR) 

The Silver Lake Resources share price gained 11.6% last week to close the week at $2.59. Another beneficiary of the rising gold price, Silver Lake Resources also revealed record quarterly gold production last week. During the June quarter, Silver Lake Resources produced 71,291 ounces of gold and 494 tonnes of copper. It sold 64,593 ounces of gold and 416 tonnes of copper. 

Annual group sales were a record 255,533 ounces of gold and 2,175 tonnes of copper, exceeding upgraded sales guidance. The miner reported it held cash and bullion of $269 million at the end of the quarter, an increase of $42 million or 19%, plus no debt. Silver Lake Resources has provided sales guidance for FY21 of 240,000 to 250,000 ounces of gold and 1,100 tonnes of copper. 

QBE Insurance Group Ltd (ASX: QBE)

The QBE share price rose 11% last week to close the week at $10.40. The share price rose throughout the week after QBE released a better than expected update on the impact of COVID-19 and its 1H20 result. Covid-19 is expected to have a $335 million underwriting impact over the half. This includes ~$150 million of net incurred claims, ~$115 million of additional risk margin, and ~$50 million of premium concessions. 

While the landscape remains uncertain, QBE expects total Covid-19 related costs to be around $600 million pre-tax. QBE expects to report a 1H20 net statutory loss after tax of $750 million, reflecting the impact of Covid-19, bushfires, and investment market volatility. CEO Pat Regan said, “despite the impact of Covid-19, I am encouraged by the strong underlying trends evident in the result. Our greatly strengthened capital base positions us well to capitalise on accelerating pricing momentum and emerging organic growth opportunities.”

More reading

• These are the 10 most shorted shares on the ASX
• Why the gold price just stormed to a record high
• ASX 200 Weekly Wrap: ASX has week of high volatility
• 5 things to watch on the ASX 200 on Monday
• These were the best performing ASX 200 shares last week

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.

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The Perpetual Limited (ASX: PPT) share price won’t be going anywhere today after the fund manager requested a trading halt.

Why is the Perpetual share price in a trading halt?

Perpetual requested a trading halt this morning while it undertakes an equity raising to fund a major acquisition.

According to the release, Perpetual has entered into an agreement with BrightSphere Investment Group to acquire its 75% interest in Barrow Hanley for US$319 million (A$465 million).

Barrow Hanley is a diversified investment manager based in Dallas, Texas with funds under management (FUM) of approximately US$44.1 billion (A$63.9 billion) across 21 key strategies.

Its team invests with a value orientation across US equities, global equities, global emerging markets equities, and fixed income strategies.

Management notes that the acquisition is consistent with its strategy to build world-class investment and distribution capability and brings together two complementary investment management brands.

It is expected to more than triple Perpetual’s FUM from A$28.4 billion to A$92.3 billion and add 21 key new strategies across asset classes, strategies, and geographies.

On a pro forma basis, post the acquisitions of Barrow Hanley and Trillium (which completed on 30 June), Perpetual’s FUM will be comprised of 14% Australian equities, 48% US equities, 11% global equities, and 27% cash & fixed income.

Perpetual Chief Executive Officer and Managing Director, Rob Adams, commented: “This is a compelling acquisition. It provides Perpetual with world-class investment teams, diversifies our client base by sector and geography, and presents us with significant growth opportunities in the Australian market and a formidable platform to scale our business internationally.”

How is Perpetual funding the deal?

To fund the acquisition, Perpetual is launching a fully underwritten institutional placement of A$225 million at a fixed price of A$30.30 per share. This represents a 9.8% discount to its last close price.

It is also aiming to raise a further $40 million via an underwritten share purchase plan and has agreed a new debt facility of A$284 million (US$195 million) to cover the balance.

More reading

• Why Alumina, BWX, Life360, & Perpetual shares are charging higher
• 10 FY21 ASX share picks revealed by Bell Potter

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.

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Australia’s leading gold miners such as Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) will be on watch on Monday after the gold price raced to a record high on Friday evening.

According to CNBC, the precious metal’s August futures contract rose 0.4% to settle at US$1,897.50 per ounce. This was the sixth day in a row of gains and means the gold price has now also recorded a seven-week winning streak.

Since then, according to Bloomberg, the gold price has continued to rise and is now trading comfortably above US$1,900 an ounce at a lofty US$1,929.70.

Why is the gold price at a record high?

Traders have been buying gold this year due to the coronavirus pandemic, interest rate cuts, and, most recently, increasing tensions between the United States and China.

It was the latter that sent the gold price beyond the US$1,900 an ounce mark, much to the delight of shareholders of Evolution Mining Ltd (ASX: EVN), Resolute Mining Limited (ASX: RSG), and Saracen Mineral Holdings Limited (ASX: SAR).

Their shares could be on the rise today after the elevated gold price boosted profit margins even further.

Why are tensions rising between the United States and China?

CNBC reports that tensions between the two superpowers rose last week after China ordered the U.S. to close its Chengdu-based consulate. This was in response to the U.S. closing the Houston-based Chinese consulate earlier in the week.

UBS analyst Mark Haefele, commented: “US-China tensions continue to escalate, which prompted a risk-off move in markets on Thursday and Friday.”

But he doesn’t expect it to stop there and has suggested that the political uncertainty could take the gold price beyond US$2,000 an ounce this year.

This is likely to be supported by a weakening U.S. dollar, which fell 1% last week and has now recorded declines for five straight weeks.

“While we think gold will continue to be supported by rising geopolitical tensions, in our view the primary drivers of the gold price are its negative correlation to real interest rates and the dollar,” Haefele added.

Is it too late to buy gold miners?

I wouldn’t necessarily go piling into all of the gold miners as I feel a lot of the gold price strength is already priced in, however I still see value in some gold miners.

The one I would buy is Newcrest. I think it is the best in the industry and could still go higher from here.

UBS certainly believes this is the case. Last week it slapped a buy rating and $38.40 price target on its shares.

More reading

• ASX 200 Weekly Wrap: ASX has week of high volatility
• 5 things to watch on the ASX 200 on Monday
• New tailwind pushes gold price closer to record highs
• These were the best performing ASX 200 shares last week
• How to take advantage of the surging gold price

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.

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The Australian share market ended last week lower with the S&P/ASX 200 (ASX:XJO) falling 0.2%. After hitting a four-month high on Tuesday, the market slid lower over the remainder of the week. News around a potential COVID-19 vaccine buoyed the market early, but economic data dampened spirits towards the end of the week. The government announced the extension of its stimulus program which gave investors some comfort, but continuing high numbers of COVID-19 cases in Victoria is blunting optimism. 

The information technology sector finished the week marginally higher with the S&P/ASX All Technology Index (ASX: XTX) up just under 2%. The healthcare sector, however, was down, as were industrials. A number of blue chip shares dropped last week, including both Coles Group Ltd (ASX: COL), which fell 2% and Woolworths Group Ltd (ASX: WOW), which fell 0.6%. Miners and telecommunications shares were also weak with Telstra Corporation Ltd (ASX: TLS) falling 3.8% and BHP Group Ltd (ASX: BHP) down 2.2%. On that note, let’s take a look at the ASX 200’s biggest share price fallers last week. 

Alumina Limited (ASX: AWC) 

The Alumina share price fell 7.2% last week to finish the week at $1.67. There was no news out of the aluminium and bauxite miner to prompt the fall in the share price, however the  price had risen strongly the previous week. The previous share price rise was prompted by the announcement Alumina had received more cash than expected from its aluminium joint venture. 

Alumina owns 40% of Alcoa World Alumina & Chemicals (AWAC), the western world’s largest alumina business. AWAC achieved record quarterly daily production despite the challenges of the COVID-19 pandemic and Alumina received $58.6 million of net cash distributions. The price of alumina has decreased since the start of 2020, but has risen from a low of $225 per tonne in April to $284 per tonne as at 16 July. Escalating political tensions between the United States and China do not bode well for the price, however, as these tensions hurt demand last year. 

Cooper Energy Ltd (ASX: COE) 

The Cooper Energy share price fell 7.1% last week to close the week at 39 cents. Cooper Energy is an oil and gas company supplying customers including AGL Energy Limited (ASX: AGL) and Origin Energy Ltd (ASX: ORG). Cooper Energy dropped its June quarterly report on Thursday which showed record quarterly production and revenue. But the share price dropped sharply on Friday regardless, with the figures disappointing investors given the share’s 16% price rise over the preceding month. 

Cooper Energy reported a 118% increase in quarterly production and 61% increase in quarterly revenue, which reached $24.1 million, up from $15 million the previous quarter. This increase was primarily due to higher gas sales thanks to the first full quarter’s supply from the Sole gas field which commenced production in March 2020. Full year production increased 19% and full year sales revenue 3% to $78.1 million. Cash at the end of the quarter was $131.2 million, down from $143.3 million at the beginning of the quarter. Net debt was $98.2 million at 30 June, up from $53.9 million at 30 June 2019. 

Western Areas Ltd (ASX: WSA) 

The Western Areas share price dropped 6.6% last week to finish the week at $2.53. Western areas is a nickel producer with two high-grade nickel mines located in Western Australia and also has a third mine in development. Western Areas released its quarterly activities report last week which showed the company produced 20,926 nickel tonnes in concentrate, 99.7% of guidance. Unplanned downtime in June relating to power supply interruptions caused the variance. 

The nickel price is well down from highs seen a year ago but has gained ground from its low in March. The average nickel price in the June quarter was $8.50 per pound, slightly up on the March quarter’s $8.40 per pound. Western Areas reports that it finished the FY20 financial year with $144.8 million cash at bank and no debt. The most significant cash flow item for the quarter was the $28.6 million paid for its 19.9% investment in Panoramic Resources Ltd (ASX: PAN). 

TPG Telecom Ltd (ASX: TPG) 

The TPG share price fell 6.1% last week to close the week at $8.02. The share price fell as low $7.50 on Friday but then bounced back somewhat, perhaps on speculation it had been oversold. There was no news out of the telecommunications provider to prompt the price fall. But the telecommunications sector on the whole was out of favour last week, with the S&P/ASX 200 Communication Index (ASX: XTJ) falling 2.3%. 

TPG is the result of the $15 billion merger with Vodafone, a deal that was first announced in August 2018. It took nearly two years to implement the deal after the ACCC opposed the merger. Approval from the Federal Court in February allowed the two to join forces. Previously, TPG was missing a proper mobile arm and Vodafone missing a fixed line footprint. The merger allows them both to fulfil their ambitions. 

Unibail-Rodamco-Westfield (ASX: URW)

The Unibail share price dropped 6% last week to finish the week at $3.89. There was no news out of the shopping centre operator to prompt the fall in the share price, however investor concerns around the role of its commercial properties in a post-COVID-19 world may have prompted the sell off. Unibail runs retail properties, convention centres, and office buildings in Europe and North America. The Unibail share price is now down 61% over the past year. 

The fall in Unibail’s share price means it was removed from the S&P/ASX 100 (ASX: XTO) in the most recent quarterly rebalance. Although the majority of the company’s shopping centres have reopened, performance has been mixed across jurisdictions. With 86% of Unibail’s portfolio in retail assets, the ongoing economic downturn is likely to have a significant impact on its tenants. 

More reading

• ASX 200 Weekly Wrap: ASX has week of high volatility
• 5 things to watch on the ASX 200 on Monday
• Top broker picks the cheapest ASX stocks to buy today
• 3 ASX 200 shares to buy for the long-term
• Top brokers name 3 ASX shares to sell next week

Motley Fool contributor Kate O’Brien owns shares of BHP Billiton Limited. The Motley Fool Australia owns shares of and has recommended Telstra Limited. 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.

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The S&P/ASX 200 Index (ASX: XJO) has endured one of its more volatile weeks in recent months last week as ASX 200 bulls and bears struggled for control. The ASX 200 remains above the psychologically-important 6,000 point threshold, but only just — closing at 6,024 points last Friday. That was despite the ASX 200 touching a low 0f 5,991 points on Monday, and a high of 6,156 points on Wednesday.

The latter represents the highest point the index has touched since the coronavirus pandemic smashed global markets back in March, giving you some idea of how wildly the markets were swinging last week. Between Monday afternoon and Wednesday morning, ASX 200 shares gained more than 2.7%. Conversely, between Wednesday morning and Thursday afternoon, the markets gave back around 1.5% of those gains.

By market close on Friday, the ASX 200 ‘only’ lost 0.16% for the week. But it was open warfare between ASX bulls and bears in the meantime.

Vaccines and deficits

Sentiment surrounding possible developments of a coronavirus treatment or vaccine, as well as an extension of government stimulus programs, were the primary positive influences for the ASX last week. We heard from both the United Kingdom-based company AstraZeneca and the United States-based Moderna that progress is being made on a potential treatment or vaccination for the coronavirus, which is of course extremely exciting news.

On the other hand, coronavirus cases in Victoria continue to be at highly concerning levels, and the situation in New South Wales also remains fluid. This put a dampener on the vaccine excitement from earlier in the week and was the main factor pulling the ASX 200 back to Earth from Wednesday onwards.

We also got a sobering fiscal update from the Treasurer last Thursday. Markets initially applauded the government’s decision on Tuesday to extend its JobKeeper and coronavirus supplement safety net payments until at least March 2021 (albeit with reduced and tiered payment rates and tightened eligibility). But the reality of an almost-unfathomable $85.8 billion budget deficit for the 2020 financial year (and a projected deficit of $184.5 billion in FY21) also began to sink in.

All in all, it was a week of high drama in multiple arenas last week, and the market responded with some drama of its own in turn.

How did the markets end the week?

As I flagged earlier, the ASX 200 ended the week 0.16% in the red after starting out at 6,033.6 points and closing on Friday at 6,024 points. Monday saw a 0.5% slump, whereas Tuesday brought the punch back to the party with a 2.6% gain. But Wednesday saw the bears regain control with a 1.3% slide. Thursday saw a modest 0.3% gain, but Friday sealed the week’s red fate with another 1.1% loss.

Meanwhile, the All Ordinaries (INDEXASX: XAO) also had a flat week, starting at 6,144.9 points and finishing at 6,148 points for a week-to-week gain of 0.05%.

Which ASX 200 shares were the biggest winners and losers?

Time for things to get interesting with our weekly winners and losers. As per usual, we shall start with the losers:

Worst ASX 200 losers	% loss for the week
Alumina Limited (ASX: AWC)	(7.2%)
Cooper Energy Ltd (ASX: COE)	(7.1%)
Western Areas Ltd (ASX: WSA)	(6.6%)
TPG Telecom Ltd (ASX: TPG)	(6.1%)

Well, today we have 2 ‘hero-to-zero’ shares (not literally zero) in Alumina and Cooper Energy, who both made the previous week’s winners list. There appeared to be no major news out of either company last week, so we can probably put these large losses down to investors taking some profits off the table after strong gains the week prior.

Western Areas is a nickel producer who gave a disappointing market update on Friday.

The newly merged TPG was also on investors’ hit list. Perhaps, with nothing to look forward to (specifically in the mergers and special dividends department), investors have gotten bored of the newly-wed telco.

Now let’s take a look at the winners from last week:

Best ASX 200 gainers	% gain for the week
Resolute Mining Limited  (ASX: RSG)	17.2%
AP Eagers Ltd (ASX: APE)	16.8%
Orocobre Limited (ASX: ORE)	13.2%
QBE Insurance Group Ltd (ASX: QBE)	11%

ASX gold miner Resolute takes out last week’s crown with a hefty gain. Investors were keen to get hold of Resolute shares after the company reported a positive quarterly update with increased gold production. A near-record high gold price wouldn’t have hurt either.

Car dealership owner AP Eagers was also in favour after some positive brokering coverage.

Lithium miner Orocobre was also a buyer target, despite this company’s volatile performance in 2020 so far and no real news being released last week. Orocobre shares are now up more than 70% since May, so perhaps this is a case of investors jumping on an accelerating train here.

What is this week looking like for the ASX 200?

It continues to be a moving arena for ASX shares, so (frankly) who knows what twists and turns this week will bring. For a start, all eyes will continue to be on coronavirus case levels in Australia (and particularly Victoria) as we start a new week.

The Aussie dollar also continues to shine, so it will be noteworthy to see whether it climbs above its current ~71 US cents level this week.

Turning to ASX 200 shares, we saw some fairly heavy selling of ASX bank shares like Commonwealth Bank of Australia (ASX: CBA) on Friday, so it will be interesting to see how the banks open this week. Insurance giant Insurance Australia Group Ltd (ASX: IAG) announced it would be the latest ASX 200 share to cancel its dividend on Friday – highlighting what a perilous year 2020 has been for dividend investors so far.

And I’ll personally be keeping an eye on the gold price as it approaches the all-time high of US$1,920 per ounce it hit back in 2011.

Before we go, here is a look at how the major ASX 200 blue chip shares are looking as we prepare for the new week:

ASX 200 company	Trailing P/E ratio	Last share price	52-week high	52-week low
CSL Limited (ASX: CSL)	44.65	$277.02	$342.75	$215.24
Commonwealth Bank of Australia (ASX: CBA)	13.22	$72.86	$91.05	$53.44
Westpac Banking Corp (ASX: WBC)	13.33	$17.76	$30.05	$13.47
National Australia Bank Ltd. (ASX: NAB)	16.14	$17.98	$30.00	$13.20
Australia and New Zealand Banking Group Limited (ASX: ANZ)	12.45	$18.29	$28.79	$14.10
Woolworths Group Ltd (ASX: WOW)	19.23	$38.63	$43.96	$32.12
Wesfarmers Ltd (ASX: WES)	24.04	$46.36	$47.42	$29.75
BHP Group Ltd (ASX: BHP)	14.24	$37.08	$41.98	$24.05
Rio Tinto Limited (ASX: RIO)	15.06	$102.92	$107.79	$72.77
Coles Group Ltd (ASX: COL)	20.00	$17.78	$18.32	$13.10
Telstra Corporation Ltd (ASX: TLS)	19.21	$3.33	$4.01	$2.87
Transurban Group (ASX: TCL)	162.03	$13.70	$16.44	$9.10
Sydney Airport Holdings Pty Ltd (ASX: SYD)	30.18	$5.40	$9.30	$4.37
Newcrest Mining Limited (ASX: NCM)	33.98	$34.60	$38.87	$20.70
Woodside Petroleum Limited (ASX: WPL)	40.82	$20.99	$36.28	$14.93
Macquarie Group Ltd (ASX: MQG)	14.80	$125.79	$152.35	$70.45

And finally, here is the lay of the land for some leading market indicators:

•     S&P/ASX 200 (XJO) at 6,024 points
•     All Ordinaries (XAO) at 6,148 points
•     Dow Jones Industrial Average at 26,469.89 points after falling 0.68% on Friday night (our time)
•     Gold (Spot) swapping hands for US$1,901.30 per troy ounce
•     Iron ore asking US$105.59 per tonne
•     Crude oil (Brent) trading at US$43.42 per barrel
•     Crude oil (WTI) going for US$41.34 per barrel
•     Australian dollar buying 71.03 US cents
•    10-year Australian Government bonds yielding 0.86% per annum

Foolish takeaway

After last week’s swings, I’m reminded how much short-term sentiment can sway the ASX 200 sharemarket — and equally how little these short-term swings really matter in the long-run. So don’t let volatility get you down Fools! It’s our constant reminder that the share market is a place where cool heads always prevail in the end. So, as always, stay safe out there, stay rational and stay Foolish!

More reading

• 5 things to watch on the ASX 200 on Monday
• Buy these blue chip ASX dividend shares for income
• Top broker picks the cheapest ASX stocks to buy today
• 3 ASX 200 shares to buy for the long-term
• Top brokers name 3 ASX shares to sell next week

Sebastian Bowen owns shares of National Australia Bank Limited, Newcrest Mining Limited, and Telstra Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited and Telstra Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET, Transurban Group, Wesfarmers Limited, and Woolworths Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post ASX 200 Weekly Wrap: ASX has week of high volatility appeared first on Motley Fool Australia.

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On Friday the S&P/ASX 200 Index (ASX: XJO) finished the week on a disappointing note. The benchmark index fell 1.15% to 6,024 points.

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

ASX 200 set to drop lower.

The ASX 200 looks set to drop lower this morning after a poor finish to the week on Wall Street. According to the latest SPI futures, the benchmark index is expected to open the week 27 points or 0.45% lower. On Wall Street the Dow Jones fell 0.7%, the S&P 500 dropped 0.6%, and the Nasdaq fell 0.9%.

Oil prices edge higher.

Energy producers such as Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) could start the week with a small gain. According to Bloomberg, the WTI crude oil price climbed 0.55% to US$41.29 a barrel and the Brent crude oil price rose 0.1% to US$43.34 a barrel. This was the third week out of four that oil prices have recorded weekly gains.

Gold price breaks through US$1,900 mark.

Gold miners including Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) could be on the rise on Monday after the gold price strengthened further. According to CNBC, the spot gold price rose 0.4% to US$1,925.20 an ounce. The gold price closed at a record high amid rising tensions between the U.S. and China.

Non-bank financial shares to buy.

Analysts at Goldman Sachs have been looking through non-bank financial shares ahead of earnings season and are recommending which ones to buy and which ones to sell. Top of the buy list is the QBE Insurance Group Ltd (ASX: QBE) share price with a conviction buy rating and an $11.52 price target. This price target implies potential upside of 11% excluding dividends. It believes QBE is well positioned to capitalise on the hardening cycle.

Non-bank financial shares to sell.

At the bottom of Goldman Sachs’ list among the non-bank financials is the ASX Ltd (ASX: ASX) share price. It has a sell rating and $70.29 price target on the stock exchange operator’s shares. This price target implies potential downside of 16% for its shares. It is bearish on ASX Ltd due to emerging rates business headwinds and its peak valuation belief.

More reading

• ASX 200 Weekly Wrap: ASX has week of high volatility
• Top broker picks the cheapest ASX stocks to buy today
• 3 ASX 200 shares to buy for the long-term
• You should watch this key metric during the reporting season that others often overlook
• New tailwind pushes gold price closer to record highs

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

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

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If you’re planning to buy some dividend shares this week, then you might want to consider the ones listed below.

I think these ASX dividend shares are top option for income investors right now. Here’s why:

Australia and New Zealand Banking GrpLtd (ASX: ANZ)

Rather than put money into its savings accounts or term deposits, I think investors would be better off buying this banking giant’s shares. At approximately 0.9x estimated FY 2021 book value, I think ANZ’s shares could be great value after their sizeable pullback this year.

And while the bank will almost certainly have to cut its dividend further in FY 2021, I believe the recent share price weakness means that it will still provide investors with an above-average yield. I currently expect ANZ to pay its shareholders a partially franked dividend of $1.05 per share in FY 2021. Based on the latest ANZ share price, this will provide investors with a very attractive forward 5.7% yield.

Wesfarmers Ltd (ASX: WES)

Another ASX dividend share to consider buying is this conglomerate. I think Wesfarmers is a great option due to its positive long term outlook thanks to its collection of quality brands. These brands include the likes of Bunnings, Kmart, Target, ecommerce company Catch Group, and a collection of industrial businesses. 

In addition to this, the company is sitting on a sizeable cash balance and looks very likely to put it to work with value accretive acquisitions in the near term. If these potential acquisitions are a success, it could give its growth an additional boost. I estimate that the company will be paying its shareholders a dividend of approximately $1.46 per share in FY 2021. Based on the current Wesfarmers share price, this equates to a fully franked 3.15% dividend yield.

More reading

• Top brokers name 3 ASX shares to buy next week
• Buffett buys more bank shares: Should you?
• Will the iron ore price crash by the end of 2020?
• Which ASX 200 shares are the safest?
• Extended jobkeeper: Which ASX shares to buy?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Wesfarmers 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 Buy these blue chip ASX dividend shares for income appeared first on Motley Fool Australia.

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It’s hard to talk about cheap ASX stocks when experts are warning that the market is overstretched and is facing judgement day next month.

But as it turns out, ASX shares may actually be cheap after all, if UBS’ analysis on the true market valuation is on the money.

The pessimists have been beating the warning drums on lofty share prices after the S&P/ASX 200 Index (Index:^AXJO) rallied 33% in four short months.

There’s a growing sense of foreboding. Many are expecting a day of reckoning in August when companies unveil their profit results, which are unlikely to justify the big jump in ASX shares.

When reality clashes with valuation

Next month’s reporting season is tipped to be a pretty sombre affair as the COVID-19 pandemic wreaks havoc on profits.

Brokers are forecasting earnings to tumble by around 15% at a time when the ASX 200 is trading on a lofty one-year forward price-earnings (P/E) multiple of nearly 20 times.  

However, UBS believes that the overall market may still be inexpensive after it took a closer look at the impact of interest rates on valuations.

Impact of record low interest rates on ASX shares

Record low rates around the world have been credited for the larger than expected jump in equities. What the broker found was that there could be another circa 35% upside for ASX stocks, although this comes with a few caveats.

Firstly, the impact of rates on valuations differ between sectors. For instance, there’s little correlation between resource stocks and interest rates. This is likely because of the positive correlation between rates and commodity prices.

“For Financials, the negative effect of lower interest rates on earnings partially offsets lower interest rates, with a linear negative relationship between yields and Pes,” said UBS.

“However, for the Industrials ex-Financials, there is significant convexity in the relationship between bond yields and P/Es.”

The real P/E looks cheap

Based on its estimates for the current rate environment, fair value for ASX industrial stocks is 25 times P/E.

This is roughly what industrial stocks (excluding financials) are already trading at, but this P/E is distorted by two factors.

First is the exaggerated impact of technology and health care stocks. These stocks are on multiples that are well ahead of the group.

Second is the one-off hit from COVID-19 on FY21 earnings. To adjust for these distortions, one should be looking at FY22 and FY23 estimates instead and exclude tech and healthcare stocks.

This puts the “adjusted” P/E for industrials at around 19.8 times for the next financial year and 18.5 times for the following year.

Cheap ASX stocks to buy

“To screen for stocks that are potentially cheap, we compare the current P/E of stocks relative to their sector with their typical relative P/Es,” added UBS.

There are five ASX stocks that stand out as cheap buys, according to the broker.

These are the Aristocrat Leisure Limited (ASX: ALL) share price, Aurizon Holdings Ltd (ASX: AZJ) share price, Worley Ltd (ASX: WOR) share price, Crown Resorts Ltd (ASX: CWN) share price and Reliance Worldwide Corporation Ltd (ASX: RWC) share price.

More reading

• 3 ASX 200 shares to buy for the long-term
• You should watch this key metric during the reporting season that others often overlook
• Should fixed-interest investments be part of your ASX share portfolio?
• Where to invest $100,000 into ASX shares
• These were the worst performing ASX 200 shares last week

Brendon Lau owns shares of Aristocrat Leisure Ltd. and WorleyParsons Limited. Connect with me on Twitter @brenlau.

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Reliance Worldwide Limited. The Motley Fool Australia has recommended Aurizon Holdings Limited, Crown Resorts Limited, and Reliance Worldwide 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 broker picks the cheapest ASX stocks to buy today appeared first on Motley Fool Australia.

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