Tag: Motley Fool

I’ve got my eyes on some ASX shares that I’d buy if the share market crashes again.

COVID-19 is still affecting the world, the US election is getting closer and President Trump has just gone to hospital with COVID-19. I think next week and even next month could be volatile.

There are some ASX shares that I’d be very happy to buy for the long-term if there’s another sizeable decline:

Altium Limited (ASX: ALU)

Altium is a leading electronic PCB software business. The ASX share has been growing strongly over the past decade, but COVID-19 has harmed short-term growth. The company was focused on growing its subscriber numbers so that it can continue to aim for clear market leadership by 2025.

In FY20 the ASX share grew its subscription base by 17% to 51,006 with the number of new Altium Designer seats sold rising by 15% to 9,251. FY20 revenue only increased by 10% and normalised earnings per share (EPS) only grew by 5% (which ignores a one-off tax change).

The Altium share price has risen 42% since the 23 March 2020 low. It’s looking fairly pricey at 61x FY21’s estimated earnings. So I’d be much more inclined to buy Altium shares if it was at least 10% lower and closer to $30. 

Over the long-term I think Altium can continue to grow with its strong balance sheet, quality client list and growing subscriber numbers. I’m just waiting for a better price. 

Pro Medicus Ltd (ASX: PME)

Pro Medicus is another of the ASX’s best businesses in my opinion. It provides a number of services in healthcare imaging IT. The ASX share is a provider of radiology information systems (RIS), picture archiving and communication systems.

The company is steadily winning more big clients, with the latest one being NYU Langone Health. More revenue is really beneficial for Pro Medicus because it has one of the highest earnings before interest and tax (EBIT) margins on the ASX. In FY20 it had an EBIT margin of 52.5%. It’s also debt free with a growing cash balance – which was up 34.3% to $43.4 million in FY20.

A lot of the new revenue simply falls to the bottom line. I like that the company is looking to expand into new markets, which increases its addressable market.

The Pro Medicus share price fell to $13.86 in the COVID-19 crash, but it has soared 77% since then.

COVID-19 isn’t really hurting Pro Medicus and it still has a very high price/earnings ratio. It’s trading at 95x FY21’s estimated earnings.

If the ASX share was trading close to $22 (or under) then I’d be more interested in buying Pro Medicus shares.

WAM Microcap Limited (ASX: WMI)

Small cap shares are usually hit harder during a market crash, so I think they can be better buying opportunities.

WAM Microcap has been a strong performer since it listed with a gross portfolio return of 21.7% per annum before fees, expenses and taxes.

The listed investment company (LIC) owns dozens of very promising small cap ASX shares. Some of the names in its portfolio at 31 August 2020 included Marley Spoon AG (ASX: MMM), People Infrastructure Ltd (ASX: PPE), Redbubble Ltd (ASX: RBL) and Temple & Webster Group Ltd (ASX: TPW).

During March 2020 the WAM Microcap share price plunged to $0.85 and it has surged 88% since then.

If WAM Microcap shares were to drop heavily, it would be one of the first ASX shares that I’d be looking at to buy for my portfolio.

Foolish takeaway

Pro Medicus is the ASX share that I’d like to buy the most, it’s the only one not in my portfolio at the moment. But of the three, I think I’d pick WAM Microcap today because of its diversification to many different businesses and it’s probably trading fairly closely to its net tangible assets (NTA).

More reading

• Is the Altium (ASX:ALU) share price a buy after slumping?
• ASX 200 up 1.6%: CBA higher on COVID-19 loan deferrals update, Reliance rockets
• 3 ASX growth shares to buy with $3,000 in October
• Where to invest your CBA dividends
• Buying these 3 ASX shares could change your life

Tristan Harrison owns shares of Altium and WAM MICRO FPO. 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. recommends Pro Medicus Ltd. The Motley Fool Australia owns shares of and has recommended Pro Medicus 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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Last week was one to forget for the S&P/ASX 200 Index (ASX: XJO). The benchmark index was well and truly out of form and lost 2.9% over the week to end at 5,791.5 points.

Another busy five days is expected next week. Here are five things to watch:

ASX 200 to start the week strongly.

The ASX 200 index looks set to start the week with a decent gain after a better than expected night of trade on Wall Street on Friday. According to the latest SPI futures, the ASX 200 is expected to rise 67 points at the open. In the United States, the Dow Jones fell 0.5%, the S&P 500 dropped 0.95%, and the Nasdaq fell 2.2%. Futures contracts were pointing to more severe declines during afternoon trade on Friday.

Reserve Bank meeting.

On Tuesday the Reserve Bank will hold its October meeting and make a decision on the cash rate. According to the latest cash rate futures, the market is currently pricing in a 67% probability of a rate cut at the meeting. While I’m not convinced rates will go to zero, I suspect a cut from 0.25% to 0.1% could be possible based on recent comments out of the central bank.

Dividends, dividends, dividends.

Next week is another busy one for dividends. Plumbing parts company Reece Ltd (ASX: REH) and fuel retailer Viva Energy Group Ltd (ASX: VEA) are due to go ex-dividend on Monday and Tuesday, respectively. Companies paying dividends next week include the likes of Atlas Arteria Group (ASX: ALX), Carsales.Com Ltd (ASX: CAR), CSL Limited (ASX: CSL), InvoCare Limited (ASX: IVC), NIB Holdings Limited (ASX: NHF), and Woolworths Group Ltd (ASX: WOW).

Federal Budget.

On Tuesday night Scott Morrison and Josh Frydenberg will be handing down the Federal Budget. The government intends to make this a budget focused on creating jobs and driving Australia out of its recession. There is speculation the government may bring forward personal tax cuts and extend the HomeBuilder package. In total, it is expected to announce $140 billion worth of stimulus over the next four years.

Annual general meetings.

Annual general meeting season continues next week. On Wednesday, both logistics solutions company Brambles Limited (ASX: BXB) and toll road operator Transurban Group (ASX: TCL) will hold their annual general meeting. Trading updates could potentially be released at the meetings.

More reading

• Where to invest $10,000 into ASX shares next week
• These were the best performing shares on the ASX 200 last week
• ASX 200 drops, Trump has COVID-19, Mesoblast (ASX:MSB) share price sinks
• ASX 200 crashes lower after President Trump tests positive for COVID-19
• Will ASX media stocks get a $1.4 bn Google boost?

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 Transurban Group and Woolworths Limited. The Motley Fool Australia has recommended InvoCare Limited and NIB Holdings 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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With many economists predicting that interest rates will remain at rock bottom levels for some time to come, I think investors should skip savings accounts and put their money to work in the share market.

If I had $10,000 in a bank account and no immediate use for it, I would consider investing it into one of these three ASX shares:

CSL Limited (ASX: CSL)

Investors interested in gaining exposure to the healthcare sector might want to consider CSL. Over the last decade this biotherapeutics company’s shares have provided shareholders with a stunning average annual total return of 24.9%. While the level of return may not be quite as strong over the next decade, I believe its robust core business, pipeline of products under development, and growing Seqirus influenza business could allow it to generate market-beating returns.

Domino’s Pizza Enterprises Ltd. (ASX: DMP)

Although this pizza chain operator’s shares have been in sizzling form in 2020, I still think that in the long-term they could provide above-average returns for investors. After all, the company plans to more than double its store footprint to 5,500 stores by 2033. Thanks to this expansion, its focus on technology and efficiencies, and its long track record of same store sales growth, I believe Domino’s is well-placed for solid earnings growth over the next decade.

NEXTDC Ltd (ASX: NXT)

Due to the unstoppable rise of cloud computing and the ever-increasing consumption of data, I believe demand for data centre capacity will grow at a rapid rate over the long term. As a market-leader with some of the highest quality centres in the world, I think NEXTDC will be a big winner from the trend. And while its shares look expensive on paper, I believe its positive long term growth outlook more than justifies the premium.

More reading

• How to generate a passive income of $50,000 with ASX shares
• I would buy CSL (ASX:CSL) and this outstanding ASX blue chip share
• Potential ASX winners from government’s $1.5bn manufacturing blueprint
• Top ASX Stock Picks for October 2020
• Forget day trading and buy and hold these fantastic ASX shares

James Mickleboro owns shares of NEXTDC Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia has recommended 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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You might have heard an investor describe themselves as a contrarian, or perhaps an ASX share they’re looking to buy as a ‘contrarian play’. It’s more common than you’d think. What is meant by this rather strange phrase is that the investor either views themselves or the investment idea they have come up with as running ‘against the heard’ or against the popular opinion of the time.

As an example, buying Afterpay Ltd (ASX: APT) shares today is certainly not a contrarian play. That’s because we can confidently say, given the Afterpay share price has appreciated 160% year to date, ‘the heard’ had regarded this share as a buy in 2020. But if you were bullish on Afterpay back when it was $12 per share or less in 2018, this would have been a ‘contrarian’ position to make, as most other investors were giving Afterpay a wide berth at the time.

So does being a contrarian pay off? Well, sometimes. Going against the opinions of most other investors can be highly lucrative. But then again, if most investors aren’t bullish on a particular share, it’s probably for a reason. If the Afterpay growth story didn’t work out, that contrarian position wouldn’t have looked so prescient, for example.

So, after that long-winded introduction to contrarian shares, what’s my favourite contrarian play today? It’s MFF Capital Investments Ltd (ASX: MFF).

MFF – a contrarian bet today

MFF is a listed investment company (LIC) that normally invests in United States-listed growth shares. I say normally because, at the present time, MFF’s largest position is actually cash. According to its most recent market update, MFF told investors that its two largest stock positions were in the US payments giants Visa Inc (NYSE: V) and Mastercard Inc (NYSE: MA). But those positions were only worth 18.1% and 17.3% of the entire portfolio respectively. That pales in comparison with MFF’s cash position, currently sitting at close to 50% of the portfolio.

That in turn, means that MFF is taking a highly ‘contrarian’ position in today’s market by sitting out of the recent gains the market has been making. By extension, this also means that anyone holding MFF shares (like yours truly) is also holding a contrarian position. I’m very comfortable with this right now, as I view holding MFF shares as partly a cash position in itself. I know that MFF’s portfolio managers won’t hesitate to deploy this cash if there’s a market crash in the near future, which in turn gives me confidence in this position. It also balances nicely with my other share positions, which will (hopefully) thrive if the market doesn’t crash.

I wouldn’t call myself a fully contrarian investor, but I certainly like hedging my bets against ‘the crowd’ from time to time, and my position in MFF upholds this today, in my view.

More reading

• The smartest ASX shares to buy if you have $2,000
• 3 ASX shares that I’d invest $1,000 into EVERY month
• These ASX growth shares could be strong buys in October
• Meet the ASX 200 stock with a dividend yield that’ll hit ~14% in FY22
• ASX 200 down 0.95%: Mesoblast crashes lower on FDA update, Afterpay surges higher

Sebastian Bowen owns shares of Magellan Flagship Fund Ltd, Mastercard, and Visa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Mastercard and Visa. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Mastercard. 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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If you’re wanting to generate an income of $50,000 per year from dividends, you’ll need either time or a large amount of money.

If you have the latter, you could buy the shares of companies such as Sydney Airport Holdings Pty Ltd (ASX: SYD) or Telstra Corporation Ltd (ASX: TLS).

In respect to Telstra, I’m optimistic that a shift to a free cash flow-based dividend policy will allow the telco giant to maintain its 16 cents per share fully franked dividend in FY 2021.

This is a view that I share with Credit Suisse, which late last month put an outperform rating and $3.85 price target on the Telstra share price.

It expects Telstra to continue paying 16 cents per share over the near term, which will yield 5.8% for investors that buy in now.

This means that an investment of $862,000 into Telstra’s shares would generate $50,000 of dividends each year.

Though, it is worth noting that investing such a large sum into a single share wouldn’t be wise – don’t put all your eggs in one basket springs to mind here. So, investors ought to look to build a diversified portfolio with shares offering similar yields to generate an income of this level through this method.

If you have time on your side.

If you have time on your side, then you might want to start thinking about investing for the future.

By investing in companies with solid long term growth potential that pay dividends, investors can build up a significant income portfolio over the long term.

A great example of this is pizza chain operator Domino’s Pizza Enterprises Ltd (ASX: DMP).

In May of 2005, Domino’s undertook its IPO and raised $75 million through the offer of approximately 34 million shares at $2.20 each.

Just over 15 years later the Domino’s share price is changing hands for $80.60 and is tipped to pay a dividend of ~$1.43 in FY 2021.

This means that investors that bought Domino’s shares at its IPO, and held onto them until today, will receive a yield on cost of 65%. To put that into context, for every dollar you invested in 2005, Domino’s will be giving you 65 cents back in dividends over the next 12 months.

In light of this, an investment of ~$76,900 at its IPO would now be generating $50,000 in dividends this year.

But it doesn’t stop there. Investing $76,900 into the Domino’s IPO would have got you 34,954 shares. Today, those shares would have a market value of approximately $2.82 million.

So, not only are you receiving $50,000 (and growing) of dividends each year, you have a significant little nest egg that you could cash in later in life.

Overall, I think this demonstrates just how rewarding it can be to invest in ASX shares with a long term view.

More reading

• Beat the RBA rate cuts with these ASX dividend shares
• Meet the ASX 200 stock with a dividend yield that’ll hit ~14% in FY22
• The Telstra (ASX:TLS) share price is at a new 52-week low
• 2 high yield ASX dividend shares to solve your income needs
• 3 ASX shares for growth, income, and value investors to buy in October

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia has recommended 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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There are a few ASX shares out there that could make very smart buys with $2,000.

Here are my two top long-term ideas:

MFF Capital Investments Ltd (ASX: MFF)

I think that MFF Capital is one of the most promising ASX shares. I think it’s a very promising listed investment company (LIC) which is operated by Chris Mackay, one of the best Australian fund managers in my opinion.

MFF Capital invests in global shares. I believe MFF Capital is a good way to diversify your portfolio and hopefully get strong returns. According to CMC, it has delivered average total shareholder returns per annum of 17.4%.

The strong return has been down to good picks by MFF Capital, namely Visa and Mastercard which are the biggest positions and have been long-term positions. These two payment giants are benefiting from very powerful tailwinds as more transactions go cashless and there’s more online shopping.

Visa and Mastercard are still the biggest positions for MFF Capital – combined, they amount to just over 35% of the portfolio at the end of September 2020.

The ASX share has a really good portfolio in my opinion, it’s more than just Visa and Mastercard. Its other portfolio holdings include: Home Depot, CVS Health, Facebook, Berkshire Hathaway, Microsoft, CK Hutchison, Flutter Entertainment, L’Oreal, JP Morgan Chase, Prosus, Itochu, Mitsubishi, Asahi, Intercontinental Exchange, Lloyds Banking, Lowe’s, US Bancorp, Mitsui & Co, Sumitomo and Schroders.

MFF Capital has been steadily investing its large cash pile into shares over the past few months. It still has a fairly high cash position of 28.9% at the end of September 2020 which could be useful for buying opportunities over the coming weeks.

The ASX share is looking to grow its half-yearly dividend to 5 cents per share over the next few years. At the current MFF Capital share price that would be a future grossed-up dividend yield of 5.5%. It’s priced at a 9% discount to the net tangible assets (NTA) at 30 September 2020.

Pushpay Holdings Ltd (ASX: PPH)

Pushpay is one of my highest-conviction ASX share ideas at the moment.

The electronic donation business has done very well to try to help US churches during this difficult COVID-19 period. It is helping large and medium US churches to receive digital donations – in FY20 it grew total processing volume by 39% to US$5 billion.

One of the attractive features about Pushpay’s technology is that it allows the church to livestream the service to its congregation and stay connected.

Total revenue increased by 32% to US$129.8 million, which helped grow the gross profit margin by five percentage points from 60% to 65%. It’s the rapid increase in the gross margin that is one of the main reasons I’m interested in Pushpay. More gross profit should mean fast growth of the net profit as well.

Over the long-term, the ASX share is aiming for US$1 billion of annual revenue. Pushpay should be able to materially increase its margins as it gets closer to that target.

I like the optionality that Pushpay has in the future. At the moment it’s aiming for large and medium US churches. Other religions in the US could be a future target. There are other churches in other countries it could aim for. There are plenty of non-religious donation sectors that Pushpay could try to expand into in the future.

The ASX share’s core product has a long growth runway and it seems it has very strong economies of scale. In FY21 alone it’s looking to at least double its earnings before interest, tax, depreciation, amortisation and foreign currency (EBITDAF) to between US$50 million to US$54 million.

At the current Pushpay share price it’s trading at 38x FY21’s estimated earnings.

Foolish takeaway

I really like both of these ASX shares at the current prices. MFF Capital offers a lot of global diversification, low fees and a promising future dividend yield. However, Pushpay would be my first pick because of how much profit margin improvement it could achieve in the coming years.

More reading

• 3 ASX shares that I’d invest $1,000 into EVERY month
• Where to invest $10,000 into ASX shares immediately
• 2 top ASX shares I’d buy with $2,000 for October and beyond
• 3 ASX shares for growth, income, and value investors to buy in October
• Buying these 3 ASX shares could change your life

Tristan Harrison owns shares of Magellan Flagship Fund Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of PUSHPAY FPO NZX. The Motley Fool Australia has recommended PUSHPAY FPO NZX. 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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Last week was a tough one for the S&P/ASX 200 Index (ASX: XJO). The benchmark index lost 2.9% over the five days to end at 5,791.5 points.

While a number of shares dropped lower with the market last week, some stood out with particularly large declines.

Four shares that tumbled notably lower last week are listed below. Here’s why they were the worst performers on ASX 200 over the period:

Mesoblast limited (ASX: MSB)

The Mesoblast share price was the worst performer on the ASX 200 last week by some distance with a sizeable 35% decline. Investors were hitting the sell button on Friday after the biotechnology company revealed that the US FDA has not approved its remestemcel-L (RYONCIL) treatment for paediatric patients with steroid-refractory acute graft versus host disease (SR-aGVHD). Instead, the FDA has requested that Mesoblast undertake at least one additional randomised, controlled study in adults and/or children. This is to provide further evidence of the effectiveness of remestemcel-L for SR-aGVHD.

A2 Milk Company Ltd (ASX: A2M)

The A2 Milk share price was well and truly out of form last week with an 18.5% decline. Investors were selling the infant formula and fresh milk company’s shares after it updated its outlook for FY 2021. According to the release, a2 Milk has been experiencing weakness in the daigou channel following lockdowns and international travel restrictions. As a result, management expects its first half sales to be down 3.9% to 10.1% compared to the prior corresponding period.

Blackmores Limited (ASX: BKL)

The Blackmores share price was the next worst performer with a decline of 11.1% over the five days. This decline appears to have been driven by concerns that it too could be impacted by weakness in the daigou channel during the pandemic. This could mean the health supplements company’s recovery takes longer than expected.

NRW Holdings Limited (ASX: NWH)

The NRW share price was out of form and dropped 9.6% lower. Last week the mining services company announced that attempts to place Gascoyne Resources into liquidation failed in the Federal Court. Gascoyne is currently in voluntary administration, with NRW involved in the recapitalisation of the company. NRW was a creditor to Gascoyne and is owed $32.7 million.

More reading

• ASX 200 drops, Trump has COVID-19, Mesoblast (ASX:MSB) share price sinks
• These ASX growth shares could be strong buys in October
• Why Beach, Fortescue, Mesoblast, & SeaLink shares are tumbling lower
• ASX 200 down 0.95%: Mesoblast crashes lower on FDA update, Afterpay surges higher
• Mesoblast (ASX:MSB) share price tumbles 32% lower on update

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended A2 Milk and Blackmores 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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Next week the Reserve Bank will hold its October meeting and make a decision on the cash rate.

According to the latest cash rate futures, the market is currently pricing in a 67% probability of a rate cut at the meeting.

In light of this, I would suggest income investors continue to look beyond savings accounts and term deposits and focus on some of the quality dividend shares trading on the Australian share market.

Two ASX dividend shares that I would buy are listed below.

Dicker Data Ltd (ASX: DDR)

The first ASX dividend share to consider buying is Dicker Data. It is a leading wholesale distributor of computer hardware and software across the ANZ region. Dicker Data has been a very positive performer over the last few years and this has continued in FY 2020.

It recently released its first half results and revealed half year revenue above $1 billion for the first time. Even better, the company reported a 30.4% lift in net profit before tax to $42 million. In light of this, it remains on track to deliver on its plan to increase its dividend by 31% to 35.5 cents per share this year. Based on the current Dicker Data share price, this represents a generous fully franked 4.55% dividend yield.

Sydney Airport Holdings Pty Ltd (ASX: SYD)

An ASX dividend share for patient income investors to consider buying is Sydney Airport. While its dividends are likely to be lower than normal in FY 2021 due to the pandemic’s impact on travel and tourism, I’m optimistic that they will rebound strongly once the crisis passes. This could make it well worth buying and holding the airport operator’s shares for the long term.

In FY 2021 I expect Sydney Airport to pay shareholders 15 cents per share, which equates to a 2.6% yield. However, in FY 2022 I’m confident traffic volumes will have improved enough for the company to pay the equivalent of a 4.5% dividend yield. This should then increase further in FY 2023.

More reading

• Advantage Australia — Why Morgan Stanley upgraded ASX shares to overweight
• 2 reliable and quality ASX dividend shares to buy
• ASX 200 Weekly Wrap: Bank shares push ASX 200 higher
• Brokers name 3 ASX shares to buy right now
• Where to invest your Telstra (ASX:TLS) dividends

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Dicker Data 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) was out of form last week and tumbled notably lower. The benchmark index lost 2.9% over the five days to end at 5,791.5 points.

Fortunately, not all shares on the index sank lower with the market.

Four shares that stormed higher last week are listed below. Here’s why they were the best performers on ASX 200 over the period:

Janus Henderson Group (ASX: JHG)

The Janus Henderson share price was the best performer on the ASX 200 last week with a sizeable 16.7% gain. A good portion of this gain came at the end of the week following reports that activist investor Trian Fund Management had taken a big stake in the fund manager. 

EML Payments Ltd (ASX: EML)

The EML Payments share price wasn’t too far behind with a gain of almost 13% over the five days. This was despite there being no news out of the payments company last week. However, prior to last week, the EML Payments share price was down by more than 50% since the start of the year. Bargain hunters may have been swooping in, especially given the rebound in tech stocks.

Premier Investments Limited (ASX: PMV)

The Premier Investments share price was on form last week and recorded an 11.9% gain. This appears to have been driven by a broker note out of UBS. Its analysts retained their buy rating but lifted the price target on the retail conglomerate’s shares to $20.50. UBS is positive on the company’s long term outlook. This is thanks partly to the global expansion of the Smiggle brand and its improving margins due to a shift in its sales mix.

Zip Co Ltd (ASX: Z1P)

The Zip share price returned to form and charged 8.9% higher over the week. Investors were buying Zip and other tech stocks last week after their US counterparts on Wall Street’s Nasdaq index pushed higher. This led to the S&P/ASX All Technology Index (ASX: XTX) overcoming the market weakness and recording a solid gain of 1.9%.

More reading

• ASX 200 drops, Trump has COVID-19, Mesoblast (ASX:MSB) share price sinks
• ASX 200 crashes lower after President Trump tests positive for COVID-19
• Will ASX media stocks get a $1.4 bn Google boost?
• This is my favourite ASX share right now
• Meet the ASX 200 stock with a dividend yield that’ll hit ~14% in FY22

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 ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended Emerchants Limited and Premier Investments 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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There are some ASX shares that would make good ideas to invest $1,000 into every month.

Plenty of ASX shares can be quite volatile and it would hard to commit to buy them every month. Some of those businesses names like Afterpay Ltd (ASX: APT) and Mesoblast Limited (ASX: MSB).

Instead, there are some ASX shares that would be good for a regular investment plan such as these picks:

MFF Capital Investments Ltd (ASX: MFF)

This is a LIC run by the co-founder of Magellan Financial Group Ltd (ASX: MFG), Chris Mackay. I think Mr Mackay is one of the best fund managers in Australia. 

Over the past decade the LIC has been a very strong performer. According to CMC, MFF Capital has delivered total shareholder returns per annum of 17.5% over the past 10 years.

COVID-19 has detracted from returns, but I think MFF Capital is well placed to deliver good returns over the long-term. For starters, its fees are attractively low. Unlike most active fund managers, MFF’s management expenses are fixed at a fairly low level – cheaper than most other LICs – and as a percentage those fees will become smaller as the LIC’s assets grow in value.

I like its assets. Some of its largest positions include Visa, Mastercard, Home Depot, CVS Health, Berkshire Hathaway, Facebook and Microsoft. These businesses have solid long term prospects. 

The ASX share has announced its intention to continue to grow its ordinary dividend for shareholders and it is usually priced cheaper than its pre-tax net tangible assets (NTA). Indeed, at the time of writing the MFF Capital share price is valued at a 9% discount to the 30 September 2020 NTA.

Betashares Global Quality Leaders ETF (ASX: QLTY)

This is an exchange-traded fund (ETF) which invests in high-quality global businesses.

What counts as quality? To make it into the ETF’s holdings, companies need to rank well on return on equity (ROE), debt to capital, cash flow generation ability and earning stability.

It has an annual management fee of just 0.35% per annum, which is a lot cheaper than you’d probably pay for an active manager to put together a ‘quality’ portfolio.

The ETF doesn’t invest in ASX shares, just global businesses – as the ETF’s name might suggest.

It has 150 holdings. I won’t list them all, but here are the ones that made it into the top 10 positions: Keyence, Nike, Nvidia, Intel, Texas Instruments, Apple, Adobe, Intuit, Intuitive Surgical and Johnson & Johnson.

The ETF has only been around since November 2018, though obviously the underlying companies have been operating for many more years than that. Since inception its net returns have been an average of 19.6% per annum.

WAM Leaders Ltd (ASX: WLE)

This is another LIC. It aims to invest actively in large cap ASX shares. It’s operated by Wilson Asset Management (WAM), with lead portfolio manager Matthew Haupt at the helm.

It has done very well since inception in May 2016. At 31 August 2020, it had outperformed the S&P/ASX 200 Accumulation Index by 3.5% per annum, and over the prior 12 months it had outperformed the index by 10.7%.

I believe that WAM Leaders could be one of the best ways to invest in large cap ASX shares. Some of its ‘active’ picks in its top 20 holdings include Downer EDI Limited (ASX: DOW) and Star Entertainment Group Ltd (ASX: SGR).

Not only does WAM Leaders provide portfolio outperformance, but it also has a really attractive dividend. At the time of writing, WAM Leaders has a grossed-up dividend yield of 7.9%.

ASX blue chip shares can provide fairly reliable returns if you pick the right ones. I think WAM Leaders is a solid pick and is usually trading at a discount to its NTA.

More reading

• I’d buy MFF Capital (ASX:MFF) shares this week
• Where I’d invest $10,000 into ETFs right now
• How to create a yearly income of $65,000 in dividends
• 3 LICs with high dividend yields of over 6.5%
• 3 ASX dividend shares to buy for 2021

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

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