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On Wednesday the S&P/ASX 200 Index (ASX: XJO) had a day to forget and crashed notably lower. The benchmark index dropped 2.3% lower to 5,815.90 points.

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

ASX 200 expected to rebound.

The ASX 200 is expected to rebound on Thursday following a strong night on Wall Street. According to the latest SPI futures, the ASX 200 is poised to open the day 11 points or 0.2% higher this morning. Overnight the Dow Jones rose 1.2%, the S&P 500 climbed 0.8%, and the Nasdaq pushed 0.75% higher.

Mesoblast FDA update.

The Mesoblast limited (ASX: MSB) share price will be in focus today. Earlier this year the United States Food and Drug Administration (FDA) set Wednesday evening as the review date for its remestemcel-L (RYONCIL) product. Mesoblast is seeking approval to use it as a treatment for paediatric patients with steroid-refractory acute graft versus host disease.

Oil prices mixed

Energy shares such as Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) will be on watch on Thursday after a mixed night for oil prices. According to Bloomberg, the WTI crude oil price rose 1.4% to US$39.85 a barrel and the Brent crude oil price has dropped 0.2% to US$40.95 a barrel. U.S. oil jumped higher amid optimism over inventory data.

Gold price tumbles.

Gold miners such as Northern Star Resources Ltd (ASX: NST) and Saracen Mineral Holdings Limited (ASX: SAR) could drop lower today after the spot gold price weakened. According to CNBC, the spot gold price is down 0.7% to US$1,889.70 an ounce. This meant that the precious metal had its worst month in almost four years.

Dividends being paid.

A number of popular dividends shares will be rewarding their shareholders with pay checks on Thursday. Eligible shareholders of network services company Service Stream Limited (ASX: SSM) and conglomerate Wesfarmers Ltd (ASX: WES) are scheduled to receive their dividends later today. They are paying 5 cents and 95 cents per share dividends, respectively.

More reading

• Forget term deposits and buy these ASX dividend shares for income
• Are Coles (ASX:COL) shares a top option for ASX dividend investors today?
• ASX 200 sinks 2%, Corporate Travel (ASX:CTD) soars 8%
• ASX 200 down 1.1%: Corp Travel Management surges higher, gold miners rise, Santos given approval
• Santos (ASX:STO) share price on watch after Narrabri Gas Project approval

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Wesfarmers Limited. The Motley Fool Australia has recommended Service Stream 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 5 things to watch on the ASX 200 on Thursday appeared first on Motley Fool Australia.

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We asked our Foolish writers to pick their favourite ASX stocks to buy in October. 

Here is what the team have come up with…

Daniel Ewing: Damstra Holdings Ltd (ASX: DTC) 

Damstra is an Australian provider of integrated workplace management solutions to multiple industry segments across the globe. Hence, the company is perfectly positioned to benefit from the changed working conditions of the post-pandemic world. Damstra’s extensive range of products is evidence of this, with its recently added fever detection software being particularly relevant in current conditions.

The company also recently completed its acquisition of Vault Intelligence Ltd (ASX: VLT), a software company offering solutions which combine health, safety, compliance and risk management. Vault is an important lever to Damstra’s United States expansion, with the company aiming to increase the 25% of its revenue that is currently generated internationally.

Motley Fool contributor Daniel Ewing owns shares of Damstra Holdings Ltd.

Chris Chitty: Magellan Financial Group Ltd (ASX: MFG)

Magellan has a strong track record as a fund manager which dates back to 2006. This company has steadily grown its funds under management and now manages over $100 billion spread across more than ten funds and exchange-traded funds (ETFs), making it one of Australia’s largest fund managers.

Magellan is also set to extract value from its recently announced 40% interest in Australia’s newest investment bank, Barrenjoey. Given Magellan’s prospects to continue growing in size and reach, I think it could offer huge additional value to shareholders in the near future.

Motley Fool contributor Chris Chitty does not own shares of Magellan Financial Group Ltd.

Aaron Teboneras: Fortescue Metals Group Limited (ASX: FMG) 

The Fortescue share price has fallen around 15% (at the time of writing) since the company released its full-year results in late August. Although this was mostly attributed to investors taking profit, I believe it has created a strong buying opportunity. 

Fortescue reported a stellar scorecard for FY20, achieving record shipments of iron ore and boasting the world’s lowest cost margins. The mining giant has also heavily invested in the future. Its $1.7 billion Eliwana Mine and Rail project is due to be completed in December this year. 

I think that Fortescue’s lean business model coupled with its share price dip makes it a top ASX stock pick for October. 

 Motley Fool contributor Aaron Teboneras does not own shares of Fortescue Metals Group Limited. 

The company is selling at a relatively high price-to-earnings (P/E) ratio of 31.2, at the time of writing. I believe this is high because earnings reduced by 60% during the pandemic lockdown, not because the share price is inflated. Moreover, the company has a trailing 12-month dividend yield of around 4.3%.

Motley Fool contributor Daryl Mather does not own shares of Centuria Capital Group.

Bernd Struben: CSL Limited (ASX: CSL)

If you’re looking for a quality, long-term investment for October, look no further than CSL Limited. The global biotechnology company develops innovative biotherapies and influenza vaccines. In the wake of the global pandemic, CSL’s services will likely see sustained growth in demand.

CSL has delivered strong, reliable share price growth to patient investors since listing on the ASX. At the time of writing, the CSL share price is up around 43% since October 2018 and around 170% since October 2016. 2020 has been exceptionally choppy, but the CSL share price is still up around 4% year to date at the time of writing. CSL also has an annual dividend yield of 1%, unfranked.

Motley Fool contributor Bernd Struben does not own shares of CSL Limited.

Tristan Harrison: Redbubble Ltd (ASX:RBL)

In FY20, Redbubble saw its marketplace revenue grow by 36% with gross profit rising 42% and operating earnings before interest, tax, depreciation and amortisation (EBITDA) increasing by 141%. In the first month of FY21, marketplace revenue grew by 132% with similar sales levels in the first two weeks of August. I think Redbubble is on track to deliver a strong FY21 result and may benefit from improving economies of scale over the coming years.  

The Redbubble share price still looks good value to me considering its $38 million of free cash flow generated in FY20 and its likely future growth. 

Motley Fool contributor Tristan Harrison does not own shares of Redbubble Ltd. 

Regan Pearson: Eroad Ltd (ASX: ERD)

Eroad Ltd is a Kiwi tech company that provides devices which track vehicles and collect road user charges. Although the company only listed on the ASX in September, it has been achieving strong growth across New Zealand and the US, with annual revenue growing at a compounded annual rate of 42% over the last six years. The company has been burning through cash to fund this growth, but it did report a small profit in the 2020 financial year.

At the current Eroad share price of $4.04 (at the time of writing), I think the company’s shares offer great, long-term value.

Motley Fool contributor Regan Pearson does not own shares of Eroad Ltd. 

Ken Hall: Super Retail Group Ltd (ASX: SUL)

The Super Retail share price has surprised many in 2020 but I think it has further to run. Its diversified retail portfolio has shown signs of strong cash generation. I think that bodes well for strong dividends in FY21 which could be valuable given the current market. On top of that, the Super Retail share price has already gained 3.4% this year (at the time of writing). That’s an impressive feat given the S&P/ASX 200 Index (ASX: XJO) has slumped lower in 2020.

That combination of capital gains and potentially strong dividends has me putting Super Retail shares in the buy zone. 

Motley Fool contributor Ken Hall does not own shares of Super Retail Group Ltd.

Brendon Lau: Newcrest Mining Limited (ASX: NCM)

Gold stocks have been underperforming in recent times. But I believe gold will start to rebound as we head to the November US Presidential Election, with the likely political uncertainty benefitting the precious metal. One good way to gain leverage to this thematic is to invest in our largest gold producer.

The Newcrest Mining share price has been lagging its peers with a near 10% decline over the past year compared to 20% plus gains by Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST). I believe the gap will start to close over the coming months.

Motley Fool contributor Brendon Lau owns shares of Newcrest Mining Limited.

Sebastian Bowen: Cochlear Limited (ASX: COH)

My October stock pick is this ASX health care giant. Cochlear is one of the most successful ASX companies from the past few decades in my view. It has managed to place itself in the seemingly permanent centre of the global hearing aid industry. With a 60% share of the global hearing aid/assistance markets and a growing presence in emerging markets, I think this company is well set up to thrive into the 2020s and beyond.

What’s more, I think the Cochlear share price is currently looking fairly cheap by historical standards and would make a great buy this October.

Motley Fool contributor Sebastian Bowen does not own shares of Cochlear Limited.

Glenn Leese: Openlearning Ltd (ASX: OLL)

Openlearning is a Sydney-based education software-as-a-service (SaaS) company with a massive global reach. It has pioneered creative concepts such as micro credentials and online portfolios for prospective employers to view. Openlearning is currently partnered with over 100 education institutions, has more than 2.5 million students and offers thousands of courses.

From March to early September, the Openlearning share price was ‘trapped’ between 18 and 28 cents. In mid-September, the share price finally broke out, reaching heights of 41 cents. I believe a recent pullback to 29 cents (at the time of writing) presents a value-for-money opportunity for investors to secure equity in Openlearning.

Motley Fool Contributor Glenn Leese owns shares of Openlearning Ltd.

James Mickleboro: Lendlease Group (ASX: LLC)

With the Lendlease share price down sharply in 2020, I think now could be an opportune time to make an investment. Especially given the international property and infrastructure company’s recent strategy shift. Lendlease’s new strategy has changed its business model and earnings mix towards that of industrial property giant Goodman Group (ASX: GMG). I believe this is a great move and has positioned the company perfectly to deliver solid and consistent earnings growth over the next decade.

Overall, I feel this could make its shares bargain buys at the current level.

Motley Fool contributor James Mickleboro does not own shares of Lendlease Group.

More reading

• ASX 200 down 1.1%: Corp Travel Management surges higher, gold miners rise, Santos given approval
• 3 ASX 200 passive investing shares to buy today
• Will the Fortescue (ASX:FMG) share price outperform in 2021?
• Forget day trading and buy and hold these fantastic ASX shares
• 3 reasons to buy Magellan (ASX:MFG) today

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Cochlear Ltd. and CSL Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Damstra Holdings Ltd. The Motley Fool Australia owns shares of and has recommended Damstra Holdings Ltd and Super Retail Group Limited. The Motley Fool Australia has recommended Cochlear Ltd. and OpenLearning 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 ASX Stock Picks for October 2020 appeared first on Motley Fool Australia.

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According to the latest cash rate futures, the market is now pricing in a 67% probability of a rate cut to zero by the Reserve Bank next week.

While I’m not 100% certain on a cut to zero, I suspect a cut to 0.1%, like Westpac Banking Corp (ASX: WBC) is predicting, could happen.

In light of this, if you haven’t done so already, I think now would be the time to consider switching funds out of term deposits and into ASX dividend shares.

But which dividend shares should you buy?

Commonwealth Bank of Australia (ASX: CBA)

Rather than putting your money in its term deposits, I would sooner buy this banking giant’s shares for the dividends. Especially following such a sharp decline in the CBA share price in 2020. At present the bank’s shares are trading 29% lower than their 52-week high. I think this has left them trading at a very attractive level for patient investors.

While there is no doubt that the pandemic will hit the big four banks hard, I’m confident the provisions CBA has made are sufficient. In light of this, I think investors should look to the future, which is becoming a lot more positive following the relaxing of responsible lending rules. Combined with tops for a rebound in the housing market next year, I suspect the bank could be over the worst of its issues now. Based on current trading conditions, I expect a fully franked yield in the region of 4.5% in FY 2021.

Wesfarmers Ltd (ASX: WES)

I think this conglomerate could be a great option due to my belief that it is well-placed for growth over the coming years. This is thanks to the quality of its diverse portfolio of businesses and particularly its Bunnings business.

While the pandemic is creating a lot of uncertainty, I’m optimistic that government stimulus and the relaxing of responsible lending rules will support the home improvement market and allow Bunnings to maintain its positive form in FY 2021. In light of this, I currently estimate that Wesfarmers will pay a fully franked dividend of ~$1.50 per share in FY 2021. Based on the latest Wesfarmers share price, this equates to an attractive fully franked 3.3% dividend yield.

More reading

• ASX investors were buying Tesla (NASDAQ:TSLA) and Apple (NASDAQ:AAPL) shares last week
• Banks rejoice: Mortgages back to pre-COVID levels
• Is the Westpac (ASX:WBC) share price in the buy zone?
• Where to invest your CBA dividends
• The ASX big bank stock that’s most at risk of a dividend cut

Motley Fool contributor James Mickleboro owns shares of Westpac Banking. 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 Forget term deposits and buy these ASX dividend shares for income appeared first on Motley Fool Australia.

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If you’re looking to add a few growth shares to your portfolio in October, then I think the three listed below could be top options.

I believe all three are well-positioned to deliver solid earnings growth in the future and could generate strong returns for investors throughout the 2020s.

Here’s why I’m bullish on them and would invest $3,000 across their shares:

Kogan.com Ltd (ASX: KGN)

The first ASX growth to consider buying is Kogan. I believe this ecommerce company could be a great option due to the continued rise in online shopping and the increasing popularity of its Kogan-branded products and Marketplace. Another positive is the company’s recent capital raising, which raised $120 million for value accretive acquisitions. If these acquisitions are a success, Kogan’s growth could go up a level in the coming years.

Megaport Ltd (ASX: MP1)

Another ASX growth share to consider is Megaport. It is a provider of elastic interconnection services across data centres globally. Megaport’s service allows its customers to increase and decrease their available bandwidth in response to their own demand requirements. It has been a very strong performer in recent years thanks to the expansion of its footprint and increasing demand for its offering. This led to its monthly recurring revenue (MRR) growing 57% in FY 2020 to $5.7 million. Pleasingly, it is still only a fraction of its sizeable market opportunity. Thanks to its first-mover advantage, I expect it to capture a growing slice of this market over the next decade.

Pro Medicus Limited (ASX: PME)

A final ASX growth share to consider buying is Pro Medicus. It is a healthcare technology company which provides radiology IT software and services to hospitals, imaging centres, and healthcare companies. The key product in its arsenal is the Visage 7 Enterprise Imaging Platform. It delivers fast, multi-dimensional images which are streamed via an intelligent thin-client viewer. Pleasingly, demand for its offering has been strong and is driving impressive growth. I believe this can continue, especially given its growing sales pipeline.

More reading

• 2 ASX tech shares I’d like to buy today
• 2 ASX tech shares I’d buy with $10,000 
• 10 fantastic ASX shares to buy in October
• Fund managers have been buying Kogan (ASX:KGN) and this ASX share
• 3 mid cap ASX shares to buy for strong potential returns

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends MEGAPORT FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Kogan.com ltd. 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. The Motley Fool Australia has recommended Kogan.com ltd and MEGAPORT 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 3 ASX growth shares to buy with $3,000 in October appeared first on Motley Fool Australia.

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I think that strong and reliable ASX dividend shares would be good picks for income in October 2020 and beyond.

It seems the closer we get to the US election, the more volatility there’s going to be. The period after the election could be very volatile too, depending on how things go.

No matter what happens next, if you’re focused on income I think it’s a good idea to own reliable businesses that can pay solid dividends regardless of what’s going on.

With that in mind, here are three leading ASX dividend shares to buy for reliability:

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

Soul Patts is an investment conglomerate that has been going for over 100 years. The company has a diversified portfolio which is invested across various industries including building products, telecommunications, resources, financial services and pharmacies.

I rate Soul Patts as the gold standard for income. It has increased its dividend every year for the past two decades. No other ASX dividend share has that record in Australia. It’s reassuring to know that your investment is very likely to grow the dividend each year.

It funds its dividend from its annual cashflow which is steadily growing over the years as its investments (both listed and unlisted dividends) send more profit to Soul Patts in the form of dividends and distributions.

Soul Patts’ dividend is supported by plenty of defensive assets like farmland, TPG Telecom Ltd (ASX: TPG), Bki Investment Co Ltd (ASX: BKI) and Milton Corporation Limited (ASX: MLT).

At the current Soul Patts share price it offers a grossed-up dividend yield of 3.65%.

Brickworks Limited (ASX: BKW)

Brickworks is another high-quality, reliable ASX dividend share. It hasn’t cut its dividend for over four decades. That’s a very strong record.

Its quality Australian building products business can produce variable results, as you’d expect from a cyclical industry.

Brickworks has recently expanded into the US with three acquisitions in the north east of the country. This business has lots of long-term growth potential, but it too may be volatile over the medium-term.

Two assets supports the Brickworks dividend with the necessary cashflow. It owns around 40% of Soul Patts, which provides consistently growing dividends to Brickworks. So, Brickworks’ dividend is mostly supported by another great ASX dividend share. 

Brickworks also owns half of a fantastic industrial property trust which is pivoting towards e-commerce assets. Industrial assets are very important for logistics, and they are more valuable in this COVID-19 era. That property trust is currently building two large distribution warehouses for Amazon and Coles Group Limited (ASX: COL).

At the current Brickworks share price it has a grossed-up dividend yield of 4.3%.

Rural Funds Group (ASX: RFF)

Farmland has been a very useful assets for many centuries. We all need to eat. For that reason alone, I think Rural Funds is a solid, defensive idea for an ASX dividend share.

Rural Funds owns a diversified portfolio of farm types including cattle, almonds, vineyards, macadamias and cropping (sugar and cotton).

The farmland real estate investment trust (REIT) leases its farms to a variety of different quality tenants including businesses like Select Harvests Limited (ASX: SHV), Treasury Wine Estates Ltd (ASX: TWE) and Australian Agricultural Company Ltd (ASX: AAC).

The REIT aims to increase its distribution for investors by 4% per annum. That’s not exactly shooting the lights out, but it’s comfortably above inflation. It’s able to achieve this growth through a combination of contracted rental growth and productivity improvements at its farms.

At the current Rural Funds share price it has a FY21 distribution yield of 4.9%.

Foolish takeaway

Each of these ASX dividend shares offer very reliable income for investors in my opinion. Soul Patts is the one most likely to be able to keep growing its dividend consecutively for the next decade. But Brickworks could also be one to watch if construction rebounds after COVID-19.

More reading

• 5 ASX shares held by leading fund managers
• These are the ASX blue chip shares I’d buy today
• 2 outstanding ASX shares to add to your retirement portfolio
• Where to invest your Coles (ASX:COL) dividends this week
• ASX 200 Weekly Wrap: Bank shares push ASX 200 higher

Motley Fool contributor Tristan Harrison owns shares of RURALFUNDS STAPLED and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks, RURALFUNDS STAPLED, Treasury Wine Estates Limited, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Bendigo and Adelaide Bank Ltd (ASX: BEN) has been shamed by an industry authority for its debt collection practices from investors.

The Banking Code Compliance Committee (BCCC) found that Bendigo and Adelaide Bank violated the code multiple times from 2015 to 2019. 

The breaches related to “debt collection practices and the treatment of customers experiencing financial difficulty” by its Great Southern Loans (GSL) business unit.

This is the first time ever the committee has explicitly named a bank for violations.

“In deciding to name Bendigo and Adelaide Bank, the committee has given careful consideration to a number of factors, including the seriousness of the breaches and their likely impact on GSL customers,” said BCCC chair Ian Govey.

GSL, a managed investment scheme from an agri-business, was acquired by Bendigo and Adelaide Bank upon its merger with Adelaide Bank in 2007.

The agri-business failed and was liquidated a couple of years later, leaving some investors with debt without any assets.

Legal cases over $300 million in outstanding loans then ensued with GSL stopped from collecting debts in 2012.

The bank was finally authorised from 2015 to start calling in those debts — and that’s when the troubles seem to have started.

“We regret our actions and sincerely apologise for any negative impacts these breaches have caused for our customers,” said Bendigo and Adelaide Bank managing director Marnie Baker.

“We fell short of our own expectations and that of our customers and the community. These actions do not reflect who we are and what we stand for. We always strive to put our customers and communities first and these historic issues are not acceptable.”

Govey acknowledged that Bendigo and Adelaide Bank has taken remedial steps since an audit into GSL.

“We also note Bendigo and Adelaide Bank has commenced efforts to remediate customers who were adversely impacted by non-compliance with the 2013 Code,” he said.

Bendigo and Adelaide Bank shares were down 2.74% at 2:20pm AEST Wednesday, to trade at $6.03.

What exactly did Bendigo Bank and GSL do?

The BCCC found the bank hounded customers to the point where they were spammed repeatedly with payment demands to wrong email addresses and had their private information disclosed to third parties.

Process servers who served legal papers from the bank to the customers also violated the BCCC code.

Bendigo and Adelaide Bank was also accused of not properly training its debt collections staff nor keeping appropriate records. The GSL collections team ignored customers who were in financial distress and the bank didn’t have a separate unit for dealing with complaints.

Bendigo and Adelaide Bank also initially “failed to co-operate” with the committee’s investigation in 2017. 

“We accept and have reflected deeply on the findings and we understand how the mistakes occurred,” said Baker.

“Our Great Southern collections team was established and operated separately from the bank’s broader operations, was inadequately resourced, and our processes and systems were insufficient for these staff and the Great Southern customers.”

Bendigo and Adelaide Bank has set aside $1 million on its books for remediation to customers.

“The bank has addressed the operational issues to prevent this from happening again and has established a remediation program to provide payments to customers where we made mistakes that had an adverse customer impact,” Baker said.

More reading

• Is the Westpac (ASX:WBC) share price in the buy zone?
• ASX 200 finishes the week with a bang
• CBA (ASX:CBA) employees angry at ‘disrespect’
• Borrowers on loan holidays are ignoring ASX bank communications
• Top ASX dividend shares to buy in September 2020

Motley Fool contributor Tony Yoo 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 Bank named and shamed for hounding investors appeared first on Motley Fool Australia.

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The Coles Group Ltd (ASX: COL) share price hasn’t had a fabulous month and a half. Since making a fresh new all-time high of $19.26 on 14 August, Coles shares have slid to the $17.00 the company is asking at close of trade today. That’s a six-week slide of more than 10%.

But for ASX dividend investors, cheaper share prices mean higher dividend yields. So is this a buying opportunity for Coles shares today?

Coles shares’ crazy year

It’s certainly been a crazy year for the Coles share price. Just look at this visual representation:

We saw a big dip at the onset of the coronavirus pandemic, followed by some frenzied buying pressure when investors realised Coles was one of the only businesses experiencing booming sales amid the lockdowns. Then investors cooled off a bit when the broader market began to recover before another rally from June to mid-August.

The dip over the past 6 weeks has reversed some of these gains, but could this also indicate a buying opportunity?

What are Coles shares offering today?

On current prices, Coles shares are trading at a price-to-earnings (P/E) ratio of 23.28 and a trailing dividend yield of 3.37%, or 4.81% grossed-up with Coles’ full franking. That compares with the broader S&P/ASX 200 Index (ASX: XJO)’s current average P/E ratio of 17.81 and trailing dividend yield of 3.41%. That tells us that the market is placing a premium on Coles shares today. But is this justified? Well, I think Coles shares have a lot going for them today, especially if you’re a dividend investor.

In its August full-year earnings report for the 2020 financial year, Coles increased its final dividend to 27.5 cents per share, fully franked. That’s a 14.6% improvement to FY19’s final dividend and brings the total dividend from Coles in FY20 to 57.5 cents per share.

Foolish takeaway

A 3.37% dividend yield isn’t the largest offering on the ASX today. In contrast, Fortescue Metals Group Ltd (ASX: FMG) for example, is offering investors a trialling yield of 10.77% right now.

Even so, a company like Coles offers stability and defensiveness that few other ASX companies (especially Fortescue) can offer. Groceries and alcohol are household essentials for almost everyone (the former more than the latter) and Coles is one of the few places Aussies go to buy them.

This paradigm is consistent no matter the economic conditions or the impact of the coronavirus pandemic (as we saw in March and April). As such, I think Coles is a valuable share for any ASX dividend investor to have in their portfolio, and I think today’s pricing isn’t a bad offer at all.

More reading

• ASX 200 sinks 2%, Corporate Travel (ASX:CTD) soars 8%
• ASX 200 down 1.1%: Corp Travel Management surges higher, gold miners rise, Santos given approval
• Santos (ASX:STO) share price on watch after Narrabri Gas Project approval
• Why the Jumbo (ASX:JIN) share price is moving higher today
• Why the Afterpay (ASX:APT) share price has further to run

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

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The S&P/ASX 200 Index (ASX: XJO) fell by around 2% today to 5,832 points. 

Here are some of the main highlights today:

US election

It can be inaccurate and pointless to assign overall share market movements to specific events. The US election is getting closer and today was the first debate between Donald Trump and Joe Biden. It was a spicy affair, to say the least. Most media organisations covered the debate, including Australia’s ABC.

The ASX 200 drifted more than 1% lower over the course of the afternoon after the debate.

Corporate Travel Management Ltd (ASX: CTD)

The Corporate Travel Management share price went up more than 8% today.

Investors got their first chance to react to the company’s acquisition of Travel & Transport in the US.

As a reminder, Travel & Transport is a North American corporate travel business which had US$2.8 billion of total transaction value (TTV) in the 2019 calendar year.

The enterprise value of this acquisition is US$200.4 million on a cash-free, debt-free basis. The enterprise value implies a multiple of seven times the 2019 calendar year pro-forma earnings before interest, tax, depreciation and amortisation (EBITDA), which was before the impacts of COVID-19. The implied multiple reduces to 4.3 times including the estimated full run-rate synergies of US$18 million.

It’s expected to be approximately 10% earnings per share (EPS) accretive on a pro-forma 2019 calendar year basis excluding synergies, and 30% EPS accretive including synergies.

Corporate Travel is carrying out a fully underwritten entitlement offer to raise $375 million.

Today the ASX 200 company announced that it has raised approximately $262 million under the institutional entitlement offer at $13.85 per share. That was an approximate 90% take-up by eligible shareholders, excluding Corporate Travel’s founder.

Electro Optic Systems Hldg Ltd (ASX: EOS)

Defence, space and communications technology business Electro Optic Systems (EOS) announced today that it has completed contract negotiations with the Australian government for the purchase of 251 remote weapon systems and related material.

The contract is valued at over $94 million and, according to EOS, “will not only enhance Australian Army capability and secure EOS’ supplier base, but will boost Australian jobs and create opportunities for small businesses. The contract finalisation includes $28.5 million of cash flow to EOS in the fourth quarter of 2020 that will assist in securing the EOS Australia supply chain consisting of 146 SMEs and 1,100 employees. The 251 remote weapons systems will be integrated on to Bushmaster and Hawkei protected mobility vehicles. Forty RWS are scheduled for delivery in the fourth quarter of 2020, with the remainder to be delivered in 2021.”

The EOS share price jumped to $5.88 in early trading, but it settled down to be down by 0.5% to $5.50.

Jumbo Interactive Ltd (ASX: JIN)

Ex-ASX 200 lottery business Jumbo saw its share price jump to $13.50 in early trading in reaction to the Lotterywest deal. But over the course of the day it dropped around 7.5% to $12.50.

After the market had closed yesterday Jumbo revealed the terms of its agreement with Lotterywest.

Jumbo will provide a white label software platform to Lotterywest with Lotterywest branding. This will allow Jumbo WA online players (worth around $33 million of total transaction value (TTV) in FY20) to opt to continue playing online on a platform they are used to, with Lotterywest.

The agreement is for an initial 3-year term with options to extend for a further three years and then another four years.

Jumbo will receive a service fee for every customer transaction through the white label platform for the provision of the software platform and associated operation, technical and customer support and development services and costs.

More reading

• 2 exciting ASX mid cap ASX growth shares to buy for the long term
• Top brokers name 3 ASX shares to buy today
• Why Corp Travel Management, EOS, Evolution, & Recce shares are charging higher
• ASX 200 down 1.1%: Corp Travel Management surges higher, gold miners rise, Santos given approval
• Santos (ASX:STO) share price on watch after Narrabri Gas Project approval

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Electro Optic Systems Holdings Limited. 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 Corporate Travel Management Limited and Jumbo Interactive Limited. The Motley Fool Australia has recommended Electro Optic Systems 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.

The post ASX 200 sinks 2%, Corporate Travel (ASX:CTD) soars 8% appeared first on Motley Fool Australia.

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One side of the Australian share market which I think is a great place to look for investment ideas is the mid cap space.

I’m a big fan of mid cap shares as they offer stronger potential returns than large caps, but arguably carry less risk than small caps.

With that in mind, here are two mid cap ASX shares that I think are worth watching closely:

Jumbo Interactive (ASX: JIN)

Jumbo is an online lottery ticket seller and best-known as the operator of the Oz Lotteries website. The majority of the company’s revenue is currently coming from the Oz Lotteries business, which is benefiting from the shift to online gambling. However, this won’t be the case over the long term thanks to its Powered by Jumbo software-as-a-service (SaaS) business. The company is taking its Powered by Jumbo business global with the aim of capturing a slice of a US$303 billion total addressable market. It is worth noting that only 7% of this market is estimated to be online at present. I believe this gives it a significant runway for growth over the next decade as more gambling shifts online.

Opthea Ltd (ASX: OPT)

Opthea is a leading developer of novel biologic therapies for the treatment of eye diseases. I think it is well worth considering due to its very promising OPT-302 combination therapy. This therapy is targeting wet age-related macular degeneration and achieved very positive Phase 2b study results last year. The current standard of care treatments for wet age-related macular degeneration had sales of over US$3.7 billion in 2018. This gives it a sizeable market opportunity. In addition to this, the company is targeting diabetic macular edema (DME), which had sales of over US$6.2 billion in 2018. Though, recent results for DME haven’t been as positive.

More reading

• Why the Jumbo (ASX:JIN) share price is moving higher today
• 3 stellar mid cap ASX tech shares to buy for the long term
• Why Jumbo, New Hope, Northern Star, & Qantas shares are dropping lower
• Jumbo (ASX:JIN) share price on watch after Tabcorp (ASX:TAH) sells its stake
• 5 things to watch on the ASX 200 on Tuesday

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.

The post 2 exciting ASX mid cap ASX growth shares to buy for the long term appeared first on Motley Fool Australia.

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I believe trying to time the absolute bottom for ASX share prices is a mug’s game.

And though we’re proud to be Fools (with a capital ‘F’), we’ll leave attempting to pick the precise highs and lows of share markets to another category of fools.

Though futures markets may have given some indication, at this time yesterday we would not have been able to tell you with any certainty that the S&P/ASX 200 Index (ASX: XJO) would be down 1.3% in early afternoon trading.

Nor can we tell you now if the ASX will gain tomorrow only to dip again on Friday. Or if share prices will gain both days. Or…

Well, you get the idea.

Rather than encourage a rapid spread of grey hairs, we recommend taking a step back. Have a long-term investment horizon for the quality shares you buy. And when it comes to analysing the market’s next moves higher or lower, look at the medium-term trends, not the daily price swings.

With that in mind…

This is not the end of the rebound for ASX shares

Robert Sluymer is a technical strategist for Fundstrat Global. Using a series of weekly indicators, Sluymer is forecasting markets will bottom out by mid-October.

Sluymer says (as quoted by the Australian Financial Review):

Our technical outlook remains unchanged heading into the fourth quarter viewing the weakness that began for the S&P 500 in September as part of a normal, albeit unpleasant, seasonal correction within the context of a four-year bull cycle…

As more strategists turn cautious, we would highlight that the internal momentum for the market peaked in June and July, and incrementally a growing list of stocks are unwinding the intermediate-term/weekly overbought condition that developed during [and] into the summer. From our perspective, the current pullback is not the end of the rebound but is setting the stage for another advance in the fourth quarter through year-end into the first quarter of 2021.

Show me the money

Whether the ASX rebounds in early October or later in the month, we believe Sluymer is spot on with his call for advancing share prices heading into 2021.

Part of that is based on the share price corrections we’ve witnessed over the past weeks. Since 3 September, for example, the ASX 200 is down 4%. In US markets the S&P 500 Index (SP: .INX) has fallen harder, down 7% since 2 September.

Even after those retracements, US and Aussie share markets are still well above their mid-March lows. The S&P 500 is up 49% from 23 March and the ASX 200 has gained 30% since then.

That big rebound partly came on the realisation that most shares had been oversold in the initial COVID panic selling. The other major drivers were the waves of record-breaking central bank and government stimulus packages across the developed world.

According to statistics from the Bank of America, the major global central banks slashed interest rates 164 times within 147 days.

Atop the rate cuts, quantitative easing (QE) also kicked back into higher gear. As Bloomberg reports, this resulted in US$8.5 trillion (AU$12 trillion) of monetary support from central banks. Add in the US$11.4 trillion in fiscal stimulus and you arrive at AU$28 trillion in stimulus packages.

The extraordinary moves by the biggest central banks now see them owning assets worth almost 25% of the world’s total share market capitalisation.

But they’re not done yet. Which is the second reason I expect ASX share prices to see a strong leg up in the coming months.

From Bloomberg:

According to JPMorgan, further asset purchases and credit-easing policies should increase these [central] banks’ balance sheets from $21.5 trillion, or 57% of their gross domestic product, to almost $27 trillion, 67% of GDP, by the end of 2021.

Now it’s no secret that US share markets greatly influence share price moves on the ASX.

On that front, there are a few glimmers of good news trickling through.

First, the US federal government looks to have averted a costly and embarrassing shutdown on 1 October after the Senate passed a stopgap spending bill yesterday (overnight Aussie time).

Second, and more importantly, House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin are still in discussions for the next big US government stimulus package. It’s almost unimaginable that the two sides will put off any further stimulus for much longer.

Whether the Democrats get the US$2.1 trillion package they’re proposing or it gets whittled down a bit, the final number is sure to be impressive. And it’s also sure to have an impact on share prices.

As Brent Schutte, chief investment strategist at Northwestern Mutual Wealth Management says (as quoted by Bloomberg), “A lot of the fiscal stimulus conversation is driving the markets here in the near-term.”

Today might not be the absolute bottom before the next ASX rebound. But the signs indicate we should be getting close.

Foolish takeaway

When word that the next US stimulus package has passed hits the headlines (as I expect it will), many shares on the ASX should see their share prices rise. All the more so following on from the recent pullback.

Hopefully that includes most, or all, of the shares you already own.

But if you want to gain access to the wider performance of the top 200 ASX companies, there are several exchange-traded funds (ETFs) available on the ASX that are intended to closely track the performance of the top 200 listed companies. You can buy and sell shares in these ETFs just as you would with any of the individual ASX companies.

One you may wish to consider is the Ishares Core S&P/ASX 200 ETF (ASX: IOZ). This ETF works to closely match the performance of the ASX 200 Accumulation Index, meaning companies’ share price moves plus any dividends they pay.

Year to date, the ETF’s share price is down 12%. Since the 23 March low this ASX share price has gained 29%.

More reading

• Here are the 10 most popular ETFs on the ASX
• A rising tide of money to lift all shares…and one ASX ETF to buy today
• Why the Ramelius (ASX:RMS) share price is at a new all-time high
• 3 ASX high-growth ETFs growth investors can’t ignore
• A strange thing is happening with index funds…

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 Here’s why the stage is set for another big advance in ASX share prices appeared first on Motley Fool Australia.

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