Tag: Motley Fool

When the extent of the potential economic damage from coronavirus lockdown and social distancing measures became apparent, the Australian government was quick to act.

To help households impacted by the sharp rise in unemployment and underemployment, the government lifted the JobSeeker benefits to $550 per fortnight for those who were considered full time workers before losing their jobs.

And to minimise the number of people losing their jobs, and help businesses retain valuable staff through the pandemic slowdown, the government introduced the JobKeeper program. This gave qualified people $1,500 per fortnight.

But earlier this week, on Tuesday 28 September, both those relief packages were reduced. The next round of reductions is scheduled for 4 January before being terminated entirely on 28 March 2021.

With so much at stake for households and businesses, and a lot of uncertainty about the nature of the changes that have just passed, the Motley Fool reached out to Mark Chapman, H&R Block Inc (NYSE: HRB) Australia’s Director of Tax Communications for his advice.

Read on for the full interview with Mark below…

Can you highlight the changes that have been made in the 2 programs?

The big change is that businesses themselves need to effectively retest themselves as to whether they’re eligible for JobKeeper. So they’ve got to redo that 30% declining turnover test, based on their figures for July, August and September.

This could mean that some businesses which have experienced a bit of pickup over the course of the past few months could find themselves off JobKeeper. A significant amount of businesses are likely to no longer be eligible.

If a business is still eligible, if it meets that 30% decline in turnover, the employees of those firms will get reduced rates. It’s now gone down to $1,200 per fortnight where previously it was $1,500. And that’s for people who worked 80 hours or more over a 28-day period, so it’s aimed basically at full time people. And then you’ve got the lower rate of $750 per fortnight for people who worked less than 80 hours over a 28-day period.

In terms of JobSeeker, that $550 per fortnight that people were getting earlier on in the year dropped down to $250 per fortnight. So a significant hit to your income. Particularly for people who are just becoming unemployed who might now be trying to get onto JobSeeker.

Is it possible to access both assistance packages?

Yes, because of the drop in the rate, it is possible for some people to claim JobKeeper as well as JobSeeker. That could make up some of the shortfall from those declining rates. The reduced rates of JobKeeper now fall within the thresholds of what you’re allowed to earn and still collect JobSeeker, so you could have situations where people can claim both.

How do you recommend households prepare for the recent and upcoming changes?

It’s going to be a difficult experience, because initially people who are on JobKeeper will not know whether or not they are still eligible going forward. Not until their employer actually does that test. It could take a few weeks into October before they get to doing the books. October will be a difficult month for many people, tight budgets and tight cashflow for a lot of households. It’s worthwhile looking at whether or not they might be eligible for JobSeeker as well. That could potentially tide them over and could continue even if they do get JobKeeper.

What steps should businesses that believe they’re still eligible for the program be taking now?

First, they need to measure their turnover, get their books for the July, August and September months up to date as quickly as possible. And then measure their turnover for those 3 months with that same period last year. And if they hit that 30% threshold, they can stay within the JobKeeper program.

What they then need to do, quite quickly, is tell the ATO what level of payment their employees are entitled to. Whether they’re entitled to the high end $1,200 payment or the lower $750 payment. And they also need to tell their employees whether they’re still receiving JobKeeper and at what rates.

What recommendations do you have for businesses that are no longer eligible for JobKeeper?

There’ll likely be geographical differences there. In Victoria, most businesses will likely find it quite easy to still qualify for JobKeeper because of the stage-4 restrictions. But in the other states without the same level of restrictions, you’ll probably find more businesses which will no longer qualify with the 30% reduced turnover test. But they may still be experiencing difficulties. If your business has lost 20% of your business, you won’t qualify anymore, but that’s still a big hit. And those businesses are going to have to work out how they make ends meet going forward based on that level of loss of business. I suspect some businesses will be looking at their staffing, and not be able to afford [to keep] all of their staff on their full salary.

That could mean we see a bit of a spike in the jobless rate.

With these changes in mind, what’s the worst mistake a business could make?

I think the worst mistake a business could make is to not do anything. If your business was on JobKeeper up until the 28th of September and you choose not to do anything about it, then you’re going to have issues. The old JobKeeper did end and you cannot continue unless you actually retest your turnover as I talked about.

There is complexity around all of this. There are some situations where that simple turnover test we discussed may not be appropriate. Talk to your accountant. Find out what these changes mean to your specific business and your employees.

With so much uncertainty around this virus, do you think the government may backflip on its next planned reductions in these programs, currently scheduled for 4 January?

I have heard some suggestions that the government may look at those January cuts again. I don’t think they’ll increase the programs. But I think they might look again at cutting the rates from the 4th of January next year, when JobKeeper falls to $1,000 per fortnight for fulltime people and $600 for part-time people. And businesses will again need to retest their turnover. So you’re likely to find more businesses falling out in that first quarter of next year.

But certainly, if the economy is still doing it tough in January, I think it would be a sore development if the government did not pull those further cuts.

More reading

• ASX 200 drops, Trump has COVID-19, Mesoblast (ASX:MSB) share price sinks
• 1 ASX share to ride the viral logistics boom
• ASX 200 crashes lower after President Trump tests positive for COVID-19
• Insiders have been buying Jumbo (ASX:JIN) and this ASX share
• Will ASX media stocks get a $1.4 bn Google boost?

Motley Fool contributor Bernd Struben 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 What every business and household must know about JobKeeper, JobSeeker changes appeared first on Motley Fool Australia.

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The S&P/ASX 200 Index (ASX: XJO) dropped by 1.4% today to 5,791 points after investors learned that President Trump has COVID-19.

Here are the highlights from the ASX 200 today:

Mesoblast Limited (ASX: MSB)

The Mesoblast share price sunk heavily today after some disappointing news in the US, falling by 37.2%.

It was hoping for approval from the US Food and Drug Administration (FDA) for biologics license application (BLA) for remestemcel-L for the treatment of pediatric steroid-refractory acute graft versus host disease (SR-aGVHD).

The FDA recommended that Mesoblast conduct at least one additional randomised, controlled study in adults and/or children to provide further evidence of the effectiveness of remestemcel-L for SR-aGVHD. This was despite the Oncologic Drugs Advisory Committee (ODAC) of the FDA voting 9:1 that the available data supported the efficacy of remestemcel-L for SR-aGVHD.

As there are currently no approved treatments for the life-threatening condition in children under 12, the ASX 2oo share will urgently request a type A meeting with the FDA (which is expected within 30 days) to discuss a potential accelerated approval with a post-approval condition for additional study.

The FDA also identified a need for further scientific rationale to demonstrate the relationship of potency measurements to the product’s biologic activity.

Mesoblast CEO Dr Silviu Itescu said: “We are working tirelessly to bring remestemcel-L to patients with life threatening inflammatory conditions, including SR-aGVHD and COVID-19 ARDS.”

Breville Group Ltd (ASX: BRG)

Breville has revealed an acquisition worth US$60 million. The Breville share price fell 0.6% today.

It’s buying Seattle-based coffee grinding company Baratza. It was established in 1999 and is known for designing and distributing premium coffee grinders for the North American and international markets.

The ASX 200 business said that acquisition will be complementary to its existing premium coffee business and brings together two of the world’s leading companies in the design and global distribution of coffee products.

Of the US$60 million, US$43 million will be paid by cash from existing reservices and another US$17 million will be funded by issuing new shares of Breville.

Breville Group CEO, Jim Clayton, said: “We are excited by the opportunity to bring Baratza into the Breville family. Our combined experience will unlock dynamic revenue synergies for both businesses, that share a passion for innovation and an unwavering commitment to enhancing the consumer experience.”

Qube Holdings Ltd (ASX: QUB)

Qube has been busy looking to monetise its Moorebank Logistics Park. 

The process has received strong interest from a number of parties, and following initial expressions of interest, a short list of parties was selected to proceed to the second stage of the process.

Qube has received a number of non-binding indicative offers from “high quality” counterparties in the second stage of the process. Qube decided the best thing to do would be to enter into a period of exclusivity with a preferred partner.

That partner is LOGOS Property Group, an Asian Pacific specialist with $13.8 billion of assets under management (AUM). While work on the transaction is progressing, it is still a non-binding indicative proposal and there are number of conditions, including the agreement of the precise details and scope of the monetisation structure, completion of due diligence and documentation.

The two partners are now doing the work necessary for the agreement to go ahead.

Qube said it would only go ahead with the transaction if it can realise appropriate value. Qube expects to know whether or not to proceed by the end of the 2020 calendar year.

The Qube share price was flat today.

Collins Foods Ltd (ASX: CKF)

ASX 200 fast food business Collins Foods has announced that it’s shutting all of its Sizzler Australia stores, but the Asian Sizzler licencing will continue. The Collins Foods share price dropped 1.7% today. 

Whilst the company was profitable before COVID-19, Collins Foods hasn’t seen a return to profitability from Sizzler, though KFC and Taco Bell have rebounded.

Around 600 staff have been offered redundancy packages and access to outplacement support, though it’s looking to redeploy people to its KFC and Taco Bell networks.

Collins Foods CEO Drew O’Malley said: “This has been a difficult decision for Collins Foods, especially given the impact it will have on our dedicated Sizzler employees and customers in Australia.

“As a casual dining concept, Sizzler has been the brand in our portfolio most impacted by the COVID-19 pandemic. The ongoing impact of COVID-19 on revenues has meant that unfortunately, these restaurants have not established a clear path to profitability in the foreseeable future.

“In FY20, Sizzler Australia revenues accounted for less than 3% of Collins Foods’ total revenue. While the Sizzler Australia closure will allow us to minimise current-year and future losses, there will be some one-off closure costs that will be reflected in the upcoming half-year results.”

More reading

• 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
• Collins Foods (ASX:CKF) share price edges higher on Sizzler update
• Meet the ASX 200 stock with a dividend yield that’ll hit ~14% in FY22

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Collins Foods 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 drops, Trump has COVID-19, Mesoblast (ASX:MSB) share price sinks appeared first on Motley Fool Australia.

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When COVID-19 first reared its ugly head in Australia on 25 January, no one could have foreseen the massive impact this would have on our health, lives, and share markets.

The resulting lockdowns and ripples of panic saw ASX share prices across the market tank. The S&P/ASX 200 Index (ASX: XJO) fell 37% in a single month, hitting the bottom on 23 March before a strong rebound rally began.

While most ASX shares suffered sharp falls during the panic selling, not all shares suffered equally. And not all shares have rebounded as quickly, leaving some bargains on the table.

The rise of e-commerce

With people locked in their homes or mandated to maintain safe social distancing, brick and mortar retailers were among the hardest hit by the measures put in place to contain and eliminate the virus. Most have yet to recover the big share price losses suffered in February and March.

E-commerce shares largely went the other way.

Take online retailer Kogan.com Ltd (ASX: KGN), for example. The Kogan share price was ravaged during the initial market rout, falling 50% from 17 January through to 17 March.

Since then, it’s been a wildly different story. At the time of writing, Kogan’s share price is up 403% since that low. Year to date it’s up 168%.

Now Kogan’s share price, alongside other online focused shares, may well have further to run. But here’s the thing. The rapid increase in online shopping is also seeing a rise in the demand for the warehouses to support that.

1 ASX share to capture 53 industrial property assets

ASX share prices in the logistics market have largely lagged the rapid rises we’ve witnessed in the leading e-commerce players. But as demand for quality, well-situated warehouse space and logistics services heats up, that could be about to change.

One way to gain access to a portfolio of property assets with a single ASX share is via real estate investment trusts (REITs).

From the logistics side, there are a few REITs to choose from on the ASX.

One that looks particularly well positioned is the Centuria Industrial REIT (ASX: CIP), which is part of the ASX 200.

The trust holds 53 industrial assets, worth $2.1 billion as at 5 August. 90% are located on Australia’s east coast, close to key infrastructure.

And, according to Centuria, some 60% of CIP’s income comes from tenants “directly linked to the production, packaging and distribution of consumer staples, telecommunications and pharmaceuticals.”

Centuria Industrial REIT’s share price had been performing strongly, up 30% over the 12 months to 21 February, before the COVID panic selling kicked in. From 21 February CIP’s share price fell 39% through to the low on 23 March.

The Centuria Industrial REIT has gained 37% from that low. But the share price is still down 7% since 2 January, potentially offering investors a profitable entry point.

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
• Insiders have been buying Jumbo (ASX:JIN) and this ASX share
• Will ASX media stocks get a $1.4 bn Google boost?
• I would buy CSL (ASX:CSL) and this outstanding ASX blue chip share

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

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The S&P/ASX 200 Index (ASX: XJO) has just finished the week with a sizeable decline after it emerged that Donald Trump and his wife Melania have tested positive for COVID-19.

The ASX 200 ended the day 1.45% lower at 5,787.4 points.

What happened?

Earlier in the day the U.S. President revealed on Twitter that one of his closest advisers, Hope Hicks, had tested positive for COVID-19.

Hope Hicks, who has been working so hard without even taking a small break, has just tested positive for Covid 19. Terrible! The First Lady and I are waiting for our test results. In the meantime, we will begin our quarantine process!

— Donald J. Trump (@realDonaldTrump) October 2, 2020

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This led to both President Trump and the First Lady having tests of their own.

Within a couple of hours, the President updated the world via his Twitter feed that both he and the First Lady had tested positive and would be quarantining immediately.

Tonight, @FLOTUS and I tested positive for COVID-19. We will begin our quarantine and recovery process immediately. We will get through this TOGETHER!

— Donald J. Trump (@realDonaldTrump) October 2, 2020

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Given that the U.S. election is just on the horizon, this news has created a significant amount of uncertainty – something which we all know markets hate.

Unsurprisingly, this led to futures contracts on Wall Street falling heavily this afternoon, which in turn sent Australian investors to the exits in a panic.

At the time of writing, futures contracts are pointing to the Dow Jones dropping 1.7% and the Nasdaq index falling 2% at Friday’s open.

What now?

According to CNBC, White House physician Sean Conley expects the President to continue working from quarantine at the White House.

He said in a memo: “The President and First Lady are both well at this time, and they plan to remain at home within the White House during their convalescence.” Mr Conley added that Trump will “continue carrying out his duties without disruption while recovering.”

Though, one thing the President may miss is the next presidential debate. He is currently scheduled to go head to head again with Democratic rival Joe Biden on October 15.

More reading

• ASX 200 drops, Trump has COVID-19, Mesoblast (ASX:MSB) share price sinks
• 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
• The Telstra (ASX:TLS) share price is at a new 52-week low

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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Every so often, I like to take a look to see which shares have experienced meaningful insider buying.

This is because insider buying is often regarded as a bullish indicator, as few people know a company and its intrinsic value better than its own directors.

A number of shares have reported meaningful insider buying this week. Here are a couple which have caught my eye:

IOOF Holdings Limited (ASX: IFL)

According to a change of director’s interest notice, one of this financial services company’s independent non-executive directors has been buying shares this week. The notice reveals that John Selak has picked up a total of 45,000 shares through an on-market trade on 1 October. Mr Selak paid a total consideration of $140,850.00, which equates to an average of $3.13. This purchase almost doubled the director’s holding to 100,000 shares.

With the IOOF share price down by more than 56% since the start of the year, it appears as though this director sees value in its shares at the current level. One broker that would agree is Ord Minnett. Last month it upgraded IOOF’s shares to a buy rating with a $4.15 price target.

Jumbo Interactive Ltd (ASX: JIN)

A change of director’s interest notice reveals that this online lottery ticket seller’s new chair has bought her first shares since joining the company in September. According to the notice, Susan Forrester AM bought 7,500 shares through an on-market trade on 30 September. Forrester paid a total of $97,500 for the shares, which works out to be an average of $13.00 per share.

Unfortunately, since this purchase the Jumbo share price has come under pressure and is now down at $11.92. Though, it might not be down there for long. Yesterday, analysts at Morgan Stanley put an overweight rating and $14.30 price target on Jumbo’s shares.

More reading

• These ASX dividend shares could be stars of the future
• Brokers name 3 ASX shares to buy right now
• Why EOS, Jumbo, Nearmap, & OceanaGold shares are dropping lower today
• These were the worst performing ASX 200 shares in September
• ASX 200 sinks 2%, Corporate Travel (ASX:CTD) soars 8%

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Jumbo Interactive Limited. The Motley Fool Australia owns shares of and has recommended Jumbo Interactive 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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ASX media stocks are falling today even as Google’s parent Alphabet Inc Class C (NASDAQ: GOOG) is planning on paying news makers US$1 billion ($1.4 billion) over the next three years.

But this couldn’t reverse the 2.7% plunge in the Seven West Media Ltd (ASX: SWM) share price or the 1.4% fall by the Nine Entertainment Co Holdings Ltd (ASX: NEC) share price and the 0.6% drop in the News Corporation Class B Voting CDI (ASX: NWS) share price.

In contrast, the S&P/ASX 200 Index (Index:^AXJO) lost around 1% of its value in the last hour of trade on Friday.

Australia excluded from Google’s $1 billion pay-off

The lack of excitement in our media stocks is understandable. Australia is excluded from the payment while our government is looking to introduce a code of conduct on the internet giant.

This code will provide a framework where Alphabet will pay Australian news content producers a part of the revenue it makes from selling ads on its search engine.

The US$1 billion payment is only meant for the rest of the world, reported the Australian Financial Review.

Awaiting new code of conduct

Alphabet said it will wait for the outcome of the review before offering the program to Australian organisations, some of whom have already signed commercial contracts with the NASDAQ-listed giant.

Alphabet will pay news publishers to put content on its newly launched News Showcase offering.

“I’m proud to announce Google is building on our long-term support with an initial $US1 billion investment in partnerships with news publishers and the future of news,” wrotethe chief executive of Alphabet, Sundar Pichar, in a blog.

“This financial commitment – our biggest to date – will pay publishers to create and curate high-quality content for a different kind of online news experience.”

ACCC not impressed

However, Alphabet’s news was greeted with some scepticism. The chairman of the Australian Competition and Consumer Commission (ACCC), Rod Sims, noted that the timing coincides with “increased Government scrutiny both in Australia and overseas”.

He went on to say that “the code is designed to encourage good faith, commercial negotiations between news media businesses and platforms. The objective is commercial, not one-sided, outcomes”, reported the AFR.

The federal government has tasked the ACCC to draft and enforce the code of conduct.

How Google can trigger a sector re-rating

Few would be rich enough to thumb their nose at US$1 billion that Alphabet is putting on the table over three years. But it’s worth noting that the amount falls short of what Australian news organisations are asking for.

Nine Entertainment believes Google and Facebook, Inc. Common Stock (NASDAQ: FB) should be paying 10% of their annual Australian ad revenue, or roughly $600 million, to content makers.

News Corp believes the figure about be closer to $1 billion a year.

Of course, these figures are for the entire Australian news industry. But no matter how you divide the numbers, the potential Google payout will likely trigger a significant re-rating in the share prices of ASX media stocks.

More reading

• This is my favourite ASX share right now
• 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
• ASX 200 down 0.95%: Mesoblast crashes lower on FDA update, Afterpay surges higher
• Why WAAAX shares like Afterpay (ASX:APT) and Xero (ASX:XRO) are surging

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Brendon Lau 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 Alphabet (C shares) and Facebook. The Motley Fool Australia has recommended Alphabet (C shares), Facebook, and Nine Entertainment Co. 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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While it can be tempting to just fill a portfolio to the brim with exciting growth shares, I think it is important to balance it out with some quality blue chip shares.

Blue chips are companies that are large, stable, and have a long track record of operating profitably. They’re also quite often the leader (or one of the leaders) in their industry.

But which blue chip shares should you add to your portfolio? Two which I would buy are listed below:

CSL Limited (ASX: CSL)

If you only buy one blue chip ASX share, then I would make it CSL. I believe this biotherapeutics giant is arguably the highest quality company Australia has produced and feel it could continue to be a market beater over the 2020s and beyond. CSL is made up of two businesses – CSL Behring and Seqirus. CSL Behring is a global biotechnology leader which offers the broadest range of quality plasma-derived and recombinant therapies in the industry. Whereas Seqirus is one of the world’s leading vaccines developers with a focus on influenza. Its name comes from the Latin for “’securing health for all of us.”

Due to their leading therapies and vaccines, growing plasma collection network, and burgeoning research and development pipeline, I believe CSL is well-positioned to grow its earnings at a solid rate over the next decade.

Goodman Group (ASX: GMG)

Another high quality blue chip ASX share to buy is Goodman. It is an integrated commercial and industrial property group which has expertly curated its portfolio over the last few years to give it exposure to industries experiencing positive tailwinds. These include industries such as logistics, food, consumer goods, the digital economy, and ecommerce.

It is the latter that I’m particularly positive on. Especially given its close relationships with the likes of Amazon, DHL, and Walmart. Overall, I believe this has positioned Goodman perfectly to deliver further solid earnings and distribution growth over the next decade.

More reading

• 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
• 2 outstanding ASX shares to add to your retirement portfolio
• Which ASX REITs are still worth buying in a post-COVID-19 world?

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 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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Which ASX share is my favourite right now?

Well, that’s a tricky question. There are quite a few shares in my ASX portfolio, and each one is there for a reason. Some provide some portfolio ballast, even though I know they’re not going to be the shares that shoot the lights out over the next few years. Others are just there as a hedge against another share market crash or share market instability in general. And I do have some ‘high-conviction’ ideas that I’m hoping are going to at least offer the chance of a ’10-bagger’ return or better.

But the share I’m going to name as my favourite falls into none of the above categories. It’s a share that I own for market-beating performance as well as providing a decent stream of dividend income. It’s a healthy ‘core holding’ of my portfolio.

This share is the VanEck Vectors Wide Moat ETF (ASX: MOAT).

Moat?

This exchange-traded fund (ETF) gets its name from the ‘moat’ concept. A moat is an idea popularised by the great investor Warren Buffett. He describes a moat as an ‘intrinsic competitive advantage’ a company has that protects it from ‘attackers’ or competition. There are many types of moats a company can have, but the most common are a powerful brand, a product ecosystem that ‘locks’ customer in, and a ‘toll bridge’ moat where customers simply have to use a company’s products or services due to a lack of alternatives.

Think of the companies Warren Buffett is famous for investing in. Apple Inc (NASDAQ: AAPL) arguably has one of the best brands in the world that elicits its customers to pay far more for an Apple product than any competitor. It’s a similar story with the Coca-Cola Company Inc (NYSE: KO), which has one of the most recognisable brands on the planet.

Alternatively, think of Intel Corporation (NASDAQ: INTC). The vast majority of personal computers sold today, whether that be an Apple or a Windows, has an Intel chip in it. That means that consumers can’t really avoid using Intel’s products if they want a computer of most descriptions – a form of a ‘toll-bridge moat’.

The MOAT ETF holds only companies that display these characteristics. That’s why you’ll currently find Intel and Coca-Cola in MOAT’s holdings, as well as companies like Kellogg Company (NYSE: K), Amazon.com Inc (NASDAQ: AMZN) and American Express Co (NYSE: AXP).

Because of this investing philosophy, MOAT has managed to return an average of 18.61% per annum over the past 10 years. That’s an amazing return in my view and one that both exceeds the S&P 500 Index as well as the S&P/ASX 200 Index (ASX: XJO). And that’s why MOAT is my favourite ASX share right now.

More reading

• Will ASX media stocks get a $1.4 bn Google boost?
• 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
• ASX 200 down 0.95%: Mesoblast crashes lower on FDA update, Afterpay surges higher
• Why WAAAX shares like Afterpay (ASX:APT) and Xero (ASX:XRO) are surging

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Sebastian Bowen owns shares of American Express, Kellogg, Coca-Cola, and VanEck Vectors Morningstar Wide Moat ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Amazon and Apple 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, Apple, and VanEck Vectors Morningstar Wide Moat ETF. 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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I think it is fair to say that September was a month to forget for Australian investors.

I’m optimistic that October will be significantly better and that a number of beaten down ASX growth shares will recover some of their sizeable declines.

Two that I would consider buying are as follows:

a2 Milk Company Ltd (ASX: A2M)

The first ASX growth share to consider buying is a2 Milk. It is a leading infant formula and fresh milk company which specialises in a2-only products. Over the last few years the company has been growing at a very strong rate thanks to the expansion of its fresh milk footprint and the insatiable demand for its infant formula in China.

Unfortunately, the company’s impressive run is likely to come to an end in FY 2021. This due to the pandemic’s impact on the daigou channel and the pantry stocking it caused in FY 2020. The latter pulled forward sales from the current financial year. In light of this, management is forecasting a decline in first half sales in FY 2021. And while it expects a stronger second half to lead to full year growth, the level of this growth is significantly slower than the market is used to. While this is disappointing, I’m confident that a2 Milk will bounce back strongly in FY 2022. Especially given its growing Chinese mother and baby stores footprint, strong brand, and relatively small market share.

Afterpay Ltd (ASX: APT)

Another ASX growth share I would buy is Afterpay. Especially with its shares down 15% from their 52-week high. I think this has brought the payments company’s shares down to a level that is an attractive entry point for long-term focused investors.

This is because I remain confident that Afterpay is perfectly positioned to continue its meteoric growth over the next few years. I expect this to be underpinned by its strong position in the massive US market and its ongoing international expansions. In respect to the latter,  Afterpay has recently launched in Canada and acquired its way into mainland Europe. The company also has Asia in its sights and could soon launch there.

More reading

• 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
• Why Afterpay, Genetic Signatures, Qube, & Serko shares are charging higher
• Why WAAAX shares like Afterpay (ASX:APT) and Xero (ASX:XRO) are surging
• Is the Altium (ASX:ALU) share price a buy after slumping?

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

The post These ASX growth shares could be strong buys in October appeared first on Motley Fool Australia.

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When it comes to dividend shares there are countless options for investors to choose from on the ASX.

This certainly is fortunate with rates at record lows and potentially still going lower from here.

But with so many to choose from, it can be hard to decide which ones to buy.

To narrow things down I have picked out three ASX dividend shares that brokers think investors should buy:

Alumina Limited (ASX: AWC)

According to a note out of Citi, its analysts have upgraded this alumina producer’s shares to a buy rating with a $1.80 price target. The broker notes that Alumina’s shares have thoroughly underperformed its sector peers despite a rise in the alumina price over the last few months. In light of this, it sees a lot of value in them at the current level. And based on the current Alumina share price, it estimates that it offers income investors a 5.2% FY 2021 dividend yield.

BHP Group Ltd (ASX: BHP)

Analysts at UBS have retained their buy rating and lifted the price target on this mining giant’s shares to $41.00. The broker notes that base metal prices have been stronger than expected during the third quarter of 2020. This was particularly the case for iron ore prices, which averaged almost US$120 a tonne during the three months. As a result, the broker believes BHP is well-positioned to deliver another strong result in FY 2021. It is forecasting a dividend of approximately $2.49 per share, which equates to a fully franked 7% dividend yield.

Suncorp Group Ltd (ASX: SUN)

A note out of the Macquarie equities desk reveals that its analysts have upgraded this insurance and banking giant’s shares to an outperform rating with an improved price target of $11.00. The broker believes that Suncorp’s COVID provisions are sufficient. In light of this, Macquarie feels the material discount its shares are trading at in comparison to the ASX 100 is unnecessary. It is forecasting a dividend of 36 cents in FY 2021. This represents a fully franked 4.2% dividend yield.

More reading

• Meet the ASX 200 stock with a dividend yield that’ll hit ~14% in FY22
• Brokers name 3 ASX shares to buy right now
• Why BHP, Paradigm, Reliance, & SeaLink shares are charging higher today
• Will the Fortescue (ASX:FMG) share price outperform in 2021?
• Is the run over for ASX lithium shares after Tesla’s battery day? 

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 Top brokers name 3 ASX dividend shares to buy today appeared first on Motley Fool Australia.

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