Tag: Motley Fool

The S&P/ASX 200 Index (ASX: XJO) fell 0.8% today to 5,876 points.

Here are some of the main highlights from the ASX 200:

Afterpay Ltd (ASX: APT)

The Afterpay share price fell around 6% today after the buy now, pay later company announced that its chief financial officer (CFO), Luke Bortoli, would be leaving.

Afterpay said that Mr Bortoli has played a critical role in delivering the significant growth and success of the business of that period. He transformed the finance function of the company from a small cap start-up to a global market leader.

The ASX 200 share said that following discussions with Mr Bortoli regarding his future ambitions, the company went looking globally for a replacement. Rebecca Lowde will assume the role of CFO effective 6 October 2020.

Rebecca Lowde has been the CEO and CFO of Salmat for a combined six years and she was also the CFO of fintech business Bravura Solutions Ltd (ASX: BVS).

Afterpay CEO and managing director Anthony Eisen said: “Luke has made a transformational contribution to Afterpay in its highly crucial years. He has built a world class finance function that has grown from a small number of employees based in Australia to a high performing team operating across multiple regions and functions.

“Luke has worked tirelessly as a partner to the executive leadership team and been integral in driving our strong performance trajectory and expansion into new regions, while ensuring we had the right capital structure and investor base to achieve our strategic objectives.”

The ASX 200 share also announced that it has appointed Meahan Callaghan as chief people officer and Mark Teperson as chief strategy officer.

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) FY20 result

The Soul Patts report was covered here. The Soul Patts share price rose around 1% today in reaction to the result.

There were a number of interesting pieces in the report from the ASX 200 share.

Regular profit after tax was down 44.7% because of lower coal prices and lower demand with New Hope Corporation Limited (ASX: NHC) and COVID-19 impacts on construction with Brickworks Limited (ASX: BKW).

Statutory profit after tax increased by 284.3% to $953 million largely due to the accounting profit from the merger involving TPG Telecom Ltd (ASX: TPG).

The net cash flows from investments of the ASX 200 share increased by 48.8% to $252.3 million thanks to the special dividend declared and paid by TPG.

Soul Patts’ net asset value (pre-tax) decreased by 5.3% to $5.2 billion. The net asset value decline of 5.3% was 6.9% better than the S&P/ASX All Ordinaries Index (ASX: XAO) decline of 12.2% over the year to 31 July 2020.

The Soul Patts directors decided to declare a final dividend of 35 cents per share, which was an increase of 2.9% compared to last year’s final dividend. That brought the total dividend for FY20 up to 60 cents per share – an increase of 3.4%.

Brickworks

Brickworks also announced its FY20 result today. The Brickworks share price fell 1%. 

The Australian building products company said that its continuing revenue rose 4% to $953 million.

However, the ASX 200 share’s underlying earnings before interest, tax, depreciation and amortisation (EBITDA) fell 19% to $281 million, underlying earnings before interest and tax (EBIT) dropped 34% to $206 million and underlying net profit after tax (NPAT) declined 38% to $146 million. Underlying earnings per share (EPS) fell 38% to 98 cents.

Profit was impacted by COVID-19 and was down from a record result last year.

However, statutory profit rose 93% to $299 million thanks to its investment in Soul Patts which benefited from the TPG merger. Brickworks also benefited from positive property revaluations with lower interest rates.

The Brickworks board decided to increased the final dividend by 3% to 39 cents per share. The full year dividend was increased by 4% to 59 cents per share.

The ASX 200 share said that the building products Australia division has seen rising orders and sales in September which reflected the various government stimulus measures.

More reading

• 3 star ASX income shares for 2021
• Why I just bought shares of this ASX ETF
• Gold retreats! Is this a buying opportunity?
• How Elon Musk’s Tesla delivered a body blow to these ASX stocks
• Nufarm’s (ASX:NUF) share price retreats giving back yesterday’s gains

Motley Fool contributor Tristan Harrison owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. 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 ASX 200 falls 0.8%, Afterpay (ASX:APT) share price drops 6% appeared first on Motley Fool Australia.

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

Investors have been caught in the Brainchip Holdings Ltd (ASX: BRN) hype with promising developments over the last few months. This has led the BrainChip share price soaring to an all-time high of 97 cents. However, shareholders quickly sold off their positions for profit, bringing the share price lower.

At the time of writing, the BrainChip share price is trading at 41 cents, down 4.65% for the day. Many investors may be now wondering, has the dramatic price drop created a buying opportunity?

What does BrainChip do?

BrainChip develops software and hardware accelerated solutions for advanced artificial intelligence (AI) and machine learning applications. The company has a primary focus on it Akida neuromorphic processor unit hardware product.

In layman’s terms, the Akida chip thinks like a human brain and can be used in a variety of world-wide purposes.

The BrainChip share price rollercoaster ride

The BrainChip share price started the year at a price of 4.7 cents and did not move much until the end of May. An agreement with the Ford Motor Company to evaluate the Akida Neural Processor kicked off the investor hype.

In early June, BrainChip announced a joint development agreement with Valeo Corporation, a tier 1 automotive supplier. This further strengthened BrainChip’s momentum on its development of the Akida System-on-Chip (SoC).

A July update on the company’s quarterly earnings, and completion of wafer fabrication, pushed the share price higher. When the results were released to the market, the BrainChip share price reached as high 17.5 cents. This represented a 372% increase from January.

The company’s share price then exploded on news it had partnered with Magik Eye Inc. to provide 3D depth sensing to the Akida chip. The BrainChip share price hit 36.5 cents in the following days, a jump of more than 208% from the prior month.

In addition, Vorago Technologies signed to the Akida early access program agreement in early September. The collaboration – intended to support a Phase I NASA program – shot the BrainChip share price to new horizons.

This prompted a speeding ticket from the ASX which saw the share price touch 97 cents. An investor’s dream run if they held onto the company’s shares since May.

But as all hype wears off without concrete material earnings, the BrainChip share price plummeted. Shareholders took profit off the table and BrainChip shares fell to the mid-40 cent range. A 50% decline from the NASA announcement, but still 1,000% up for shareholders who bought before May.

Buying opportunity?

As BrainChip has made a string of positive developments, its half-year report revealed its Achilles heel. For the period ending 30 June, company recorded revenue of just $13,397, down 80% from $66,635 in 1HFY19.

Brainchip had a net loss of $6.8 million compared to $4.4 million loss in prior period. On an upbeat note, half of the company’s expenditure was in research and development.

In my opinion, I think that the strong pullback in the BrainChip share price has created a small buying opportunity. I would recommend investors with a higher risk profile to allocate a maximum of 5% value of their holdings into BrainChip.

Whether BrainChip can become the next Altium Limited (ASX: ALU), only time will tell.

More reading

• 3 top ASX tech shares to buy in 2020
• Why I would buy Altium (ASX:ALU) and these ASX growth shares
• Forget BrainChip (ASX:BRN) and buy and hold these outstanding ASX shares
• BrainChip (ASX:BRN) and Afterpay (ASX:APT) were among the most traded shares on the ASX last week
• Brainchip (ASX:BRN) share price shoots 9% higher on software development centre

Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Altium. 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 Has the BrainChip (ASX:BRN) share price weakness created a buying opportunity? appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3j3rx0Q

If you’re a retiree, you might be looking for a way to generate an income after the interest rates on traditional interest-bearing investment products collapsed over the last few years.

One way you can do this is by investing in dividend shares. Luckily, the Australian share market is home to a large number of them.

But which ones should you buy? Here are two that I like:

BWP Trust (ASX: BWP)

One of my favourite options for retirees is commercial real estate company BWP. The majority of its properties are leased to retail giant Bunnings Warehouse, which is owned by Wesfarmers Ltd (ASX: WES). Given the quality of the Bunnings business and its strong performance during the pandemic, BWP was largely unaffected by the crisis in FY 2020. In fact, just $435,886 of rent abatements were granted during the height of the pandemic. This meant 98.8% of rent was collected as normal during the months of March to June.

While management didn’t provide any real guidance for the year ahead, it expects to at least pay a distribution in line with the 18.29 cents per unit it paid shareholders in FY 2020. Based on the current BWP share price, this equates to a 4.5% distribution yield. Looking longer term, I believe the company is well-placed to continue growing its income and distribution consistently over the remainder of the decade.

Coles Group Ltd (ASX: COL)

Another high quality option for retirees to consider buying is Coles. In fact, I would argue that it is the best ASX share for a retirement portfolio. This is due to its defensive qualities, attractive dividend yield, and solid long term growth prospects.

In respect to the latter, I believe Coles is well-placed for growth over the 2020s thanks to its long track record of delivering same store sales growth, strong market position, and its refreshed strategy. This strategy is embracing automation, cutting costs, and supporting margin expansion. Overall, I’m confident Coles can grow its earnings and dividend at a solid rate over the 2020s.

More reading

• Is the Coles (ASX:COL) share price a buy after renewable energy deal?
• Forget term deposits and buy Coles (ASX:COL) and this ASX dividend share
• Buy these ASX dividend shares to beat low interest rates
• Afterpay (ASX:APT) one of top 10 lockdown winners
• ASX 200 Weekly Wrap: ASX 200 snaps 4 week losing streak… just

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET and 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 Why retirees should buy these safe and strong ASX dividend shares appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2RTVcO6

The market may have sunk lower on Thursday, but that didn’t stop the NEXTDC Ltd (ASX: NXT) share price from continuing its charge.

At one stage the data centre operator’s shares hit a new record high of $12.62.

When the NEXTDC share price hit that level, it meant it was up an impressive 93% since the start of the year.

Why is the NEXTDC share price at a record high?

Investors have been buying NEXTDC’s shares this year after increasing demand for capacity in its data centres led to it reporting a strong full year result in FY 2020.

For the 12 months ended 30 June 2020, NEXTDC delivered a 14% increase in revenue to $205.2 million. This was at the top end of its guidance range of $200 million to $206 million.

The catalysts for this were a 15% rise in customers to 1,364, a 33% increase in contracted utilisation to 70MW, and a 19% lift in interconnections to 2,079.

Pleasingly, NEXTDC is continuing to demonstrate operating leverage. It reported underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of $104.6 million. This was an increase of 23% year on year and at the top end of its guidance range.

What else is driving the NEXTDC share price higher?

Also supporting the NEXTDC share price has been a number of positive broker notes.

One broker that is particularly bullish is Goldman Sachs. It recently reiterated its buy rating and $13.20 price target on the company’s shares.

But it may not even stop there, with the broker suggesting NEXTDC’s shares could be worth upwards of $20.00.

Goldman commented: “Our scenario analysis suggests that a value of $20 per share is possible for NextDC, based on assumptions that are high, but in our view not unrealistic considering the current acceleration in demand that is evident across the business.”

Should you invest?

I’m a huge fan of NEXTDC and continue to believe that it would be a fantastic buy and hold option for investors. This is thanks to its strong market position and exposure to the seismic shift to the cloud.

More reading

• Where to invest $10,000 into ASX shares right now
• Got $3,000? Buy these exciting ASX growth shares
• Up 79% this year, is the NextDC (ASX:NXT) share price the next Afterpay (ASX:APT)?
• Can Macquarie Telecom (ASX: MAQ) become the next NextDC?
• Insiders have been buying NEXTDC (ASX:NXT) and this ASX share

Motley Fool contributor James Mickleboro owns shares of NEXTDC Limited. 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 The NEXTDC (ASX:NXT) share price just hit a record high: Can it go higher? appeared first on Motley Fool Australia.

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

The Pure Foods Tasmania Ltd (ASX: PFT) share price is up almost 5.52% at 96 cents in late afternoon trading. The gains come as the wider market is slipping, with the All Ordinaries Index (ASX: XAO) down 0.9% for the day. Indeed, Pure Food’s share price gains today place it at the top of the All Ords leader’s board… again.

What does Pure Foods do?

Pure Foods Tasmania was formed in 2015 and began trading on the ASX in April 2020.

The company’s business strategy is to acquire and develop premium Tasmanian food businesses. Today Pure Foods has acquired two businesses, held through separate wholly owned subsidiaries. Tasmanian Pate, which supplies numerous big brand chains such as Woolworths Group Ltd (ASX: WOW), Aldi and Costco. And Woodbridge, which produces premium Tasmanian smoked salmon and trout.

Why is Pure Foods share price trouncing the ASX returns?

The Tasmanian based seafood and pate specialist has had a stellar 2 months, with the share price up 320% since 24 July.

Pure Food’s share price really took off at the beginning of August following the release of its quarterly performance report on July 30. The company showed that it had managed to maintain robust export sales despite facing disruptions from COVID-19 and simmering trade frictions between Australia and China.

In a forward looking statement, Pure Foods forecast it would deliver full year revenue growth of 22% compared to FY19.

Shareholders were again rewarded on 6 August, when Pure Foods announced the launch of 3 of its premium pates into 850 Woolworths stores.

And the good news has kept on coming.

On 9 September, Pure Foods announced it was acquiring the Daly Potato Company for $1.8 million in a mixture of cash and shares. The company grows potatoes in Tasmania and distributes its potato salads to supermarket chains across Australia.

Pure Foods managing director Michael Cooper called it a great opportunity for the company’s shareholders saying, it cemented the company strategy of “moving into new categories”.

He added: “Meal solutions is a $1 billion market in Australia alone and we also see a large opportunity to support our Asian customers with unique 100% Tasmanian-based meal solutions.”

At the current price of 96 cents per share, Pure Foods has a market cap of $46.8 million.

More reading

• Here’s why Soul Patts (ASX:SOL) is the king of ASX dividend shares
• Could these microcap ASX shares be the next A2 Milk (ASX:A2M)? 
• Why the Chalice (ASX:CHN) share price rocketed 28% today
• Why the iCandy (ASX: ICI) share price is on a wild ride
• ASX 200 Weekly Wrap: ASX 200 snaps 4 week losing streak… just

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 Pure Foods (ASX:PFT) share price lifts, bucking the falling market appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3cql9hG

Are you looking for some blue chip ASX shares to buy in October? Well, the three listed below could be great options for a balanced portfolio.

Here’s why I think these are blue chip ASX shares to buy:

Domino’s Pizza Enterprises Ltd (ASX: DMP)

I think Domino’s Pizza could be a great blue chip option for investors. Domino’s was a very strong performer over the 2010s and looks well-placed to repeat its heroics over the next decade. This is thanks to its strong brand and management’s long term growth targets. In respect to the latter, Domino’s is aiming deliver same store sales growth of 3% to 6% per annum over the coming years. And longer term, it is looking to grow its store network to a sizeable 5,500 stores by 2033. This is more than double the 2,668 stores it had at the end of FY 2020. If it delivers on this, then it should underpin strong earnings growth over the 2020s.

REA Group Limited (ASX: REA)

Another blue chip share I would buy is REA Group. It is the dominant property listings company in the ANZ region and has a number of growing businesses in other regions. While there’s no doubt that its performance in FY 2021 is likely to be impacted meaningfully by a reduction in listings because of the pandemic, I’m confident that this is just a short term headwind and its growth will accelerate once the crisis passes. This could make it worth considering a long term and patient investment in REA Group shares.

SEEK Limited (ASX: SEK)

A final blue chip share to consider buying is SEEK. This job listings giant is one of my favourite blue chips due to its very positive long term outlook. This is thanks to its domination of the ANZ market and the incredible growth potential of its China-based Zhaopin business. Over the last few years Zhaopin has established itself as one of the leaders in the massive Chinese online job listings market. Combined, I believe SEEK can deliver strong earnings growth over the next decade and beyond.

More reading

• Is it time to buy Telstra and these high quality ASX 200 shares?
• Grow rich with these excellent ASX shares
• Where to invest $10,000 into ASX shares immediately
• 3 ASX tech shares that are still in the buy zone
• ASX 200 rises 1%, SEEK (ASX:SEK) jumps 9%

Motley Fool contributor James Mickleboro owns shares of SEEK Limited. The Motley Fool Australia has recommended Domino’s Pizza Enterprises Limited, REA Group Limited, and SEEK 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 3 outstanding blue chip ASX shares to buy in October appeared first on Motley Fool Australia.

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

The Westpac Banking Corp (ASX: WBC) share price is on the tumble today.

At the time of writing, the Westpac share price is down 0.61% to $16.29 a share, after falling as low as $16 earlier in the trading day. This heavy sell-off was prompted by the revelation this morning that Westpac is looking at a monster $1.3 billion fine in a settlement with the government financial regulator AUSTRAC. As my Fool colleague James Mickeboro reported this morning, Westpac had estimated the penalty would be around $900 million (which it offered to settle at), which means the bank will now have to reevaluate its books. That’s partly behind today’s share price fall, in my view.

So, now Westpac shares are trading at the lowest levels we have seen for 4 months, is this ASX banking giant a buy today?

Is the Westpac share price an ASX banking buy?

On one level, Westpac shares do look cheap-ish. Westpac is currently trading on a price-to-earnings (P/E) ratio of 12.16. That isn’t as low as its sibling Australia and New Zealand Banking Group (ASX: ANZ) at 11.26, but it is much lower than National Australia Bank Ltd‘s (ASX: NAB) 15.28 or Commonwealth Bank of Australia‘s (ASX: CBA) 15.6. But then again, CBA and NAB are both paying dividends this year, whereas Westpac shareholders have had their interim dividends cancelled on them. Perhaps a December final dividend from Westpac can make up for this, but I’m not holding out much hope seeing as the bank is down $1.3 billion today.

Quite frankly, I wouldn’t touch Westpac with a 10-foot pole today. I don’t think I would if this bank were sitting at $12 a share.

Westpac your bags

Why? Well, firstly, I’m not too impressed with the bank’s conduct. Yes, Westpac CEO Peter King has offered a full apology and stated that ‘we need to do better‘. Bu this is the largest fine in Australian corporate history for a reason.

Secondly, there’s not much in the way of dividends coming out of this bank for a while in my view. The economy is not in good shape, credit growth is likely to remain sluggish and interest rates remain at virtually zero – all headwinds for Westpac and its ability to generate earnings from which to pay dividends.

Thirdly, Westpac has not had a good history of delivering for its shareholders in my opinion. Sure, the company had paid decent dividends for the past decade. But it has also delivered virtually nothing in terms of capital growth. Today the Westpac share price is sitting at $16.20. That’s the same share price investors could have bought in back in February 2002! If you had bought Westpac shares for a child born at that time, they would have to fund their first drink in 2020 with last year’s dividends.

Foolish takeaway

All in all, Westpac is not a company I would consider buying today or at any time in the foreseeable future. There are simply better options out there in my view, for both growth and income.

More reading

• ASX 200 down 1.2%: Westpac hit with $1.3bn penalty, Brickworks disappoints, tech shares lower
• Why Afterpay, Evolution, Westpac, & Whitehaven shares are sinking lower today
• CBA CEO: Borrowing to invest is asking for trouble
• Westpac (ASX:WBC) share price on watch after settling AUSTRAC case for $1.3 billion
• Buy these ASX dividend shares if the RBA cuts rates

Motley Fool contributor Sebastian Bowen owns shares of National Australia Bank Limited. 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 Westpac (ASX:WBC) share price hits 4-month low. Is it time to buy the ASX bank? appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3cqJ6oW

I believe there are some good star ASX income shares that could be worth holding in a dividend portfolio.

Cash in the bank is hardly earning anything any more because of how low Australia’s official interest rate is.

But there are plenty of ASX income shares that offer good starting yields with the potential for longer-term growth.

Here are some businesses which look good value and could deliver good total returns in 2021:

Brickworks Limited (ASX: BKW)

Brickworks released its FY20 result today. For ASX income share investors, the key statistic was that the total FY20 dividend was grown by 4% to 59 cents per share, after a 3% increase to the final dividend to 39 cents per share.

At the current Brickworks share price that means it offers a grossed-up dividend yield of 4.5%. Brickworks hasn’t cut its dividend for 44 years. That’s a really strong record.

What was pleasing about the FY20 result was that Brickworks said that orders and sales have increased in September across most of its Australian building products businesses. That suggests that Brickworks could do well in FY21.

I also liked that Brickworks’ share of net assets of its property trust (which it owns 50% of) increased by $94 million and the net trust income rose by 15% to $30 million.

Amazon and Coles Group Limited (ASX: COL) will soon be major tenants at two large warehouses being built by the property trust.

I also believe that Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) will continue to be a good long-term investment for Brickworks.

Future Generation Investment Company Ltd (ASX: FGX)

Future Generation is a listed investment company (LIC) which was set up as a really good philanthropic company.

It donates 1% of its net assets each year to youth charities. I think that’s a really good initiative, the future of Australia will be decided by the younger Australians of today. Some of them may need help, particularly with what’s going on with COVID-19.

But it’s not just set up as a charity. As a LIC, it aims to make investment returns for investors. The job of a LIC is to invest in other assets on behalf of shareholders.

The ASX income share is invested in the funds of around 20 different Australian fund managers that invest in ASX shares. Some of the managers involved are: Bennelong, Paradice, Regal, Eley Griffiths and Wilson Asset Management.

Those investment managers work for free – no management fees and no performance fees. They work for free so that Future Generation can make its annual donation.

Investment returns made by a LIC can be turned into steady dividends for shareholders. Future Generation has grown its dividend each year for the past five years. Its gross portfolio return has also outperformed the S&P/ASX All Ordinaries Accumulation Index by 2.6% per annum since inception in September 2014.

At the current Future Generation share price it offers a grossed-up dividend yield of 6.6%.

Vitalharvest Freehold Trust (ASX: VTH)

Vitalharvest is an agricultural real estate investment trust (REIT) that has gone through a tough time over the past year or two due to the drought and a few specific issues at some of its farms.

The farm landlord benefits from the success of the farms that it leases to Costa Group Holdings Ltd (ASX: CGC) with an 25% annual profit share from those farms.

I think those farm-specific issues could be resolved by 2021, which would be a boost for variable rent and overall profitability in 2021.

The ASX income share’s distribution could rise in 2021 with a return to normal conditions. The new manager is also looking for food-related property investments that could provide more consistent rental income.

I think it could be one of the best-performing REITs over the next 15 months. At the current share price it’s trading at a 14.3% discount to the net asset value (NAV) at 30 June 2020.

More reading

• Here’s why Soul Patts (ASX:SOL) is the king of ASX dividend shares
• ASX 200 down 1.2%: Westpac hit with $1.3bn penalty, Brickworks disappoints, tech shares lower
• Brickworks (ASX:BKW) share price on watch after posting 38% profit decline
• 3 ASX shares now trading at crazy cheap prices
• 5 things to watch on the ASX 200 on Thursday

Motley Fool contributor Tristan Harrison owns shares of FUTURE GEN FPO and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks, COSTA GRP FPO, 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.

The post 3 star ASX income shares for 2021 appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/303fnh6

I haven’t been personally buying shares for a while now. Since the S&P/ASX 200 Index (ASX: XJO) share market crash back in March prompted me to unload most of my cash position in the markets, I have been watching the ASX 200 crawl higher since. I’ve enjoyed watching my existing and new positions recover over the past 6 months, but I haven’t been spending any new funds, instead accumulating my dividends and stacking cash.

Why? Well, not because I think another crash is imminent (no one really knows that kind of thing). Rather, it’s because, given the current economic and geopolitical environment, I thought there was a fair chance of more turmoil and volatility in 2020. Thus, I thought having a decent cash position was prudent. Now, I have my cash position restored, and with the spate of recent market volatility, I’ve decided it’s about time to get back in the buyer’s seat.

So recently, I’ve purchased units of an ASX exchange-traded fund (ETF). And now that the Fool’s mandated waiting period for discussing said purchase has now expired, I’m free to share that with you!

From zero to F100

My new position is in the BetaShares FTSE 100 ETF (ASX: F100). This ETF tracks the largest 100 shares on the FTSE Index, which is the United Kingdom’s equivalent to our own ASX 200. So why this ETF?

Firstly, this ETF brings a lot of diversification to the table for me. ASX shares are fantastic, don’t get me wrong. But our ASX 200 index isn’t the most diversified in the world. Of the top 10 shares in the ASX 200 Index, 5 are banks. Out of the top 20, we also have 5 mining/drilling companies. Of the entire ASX 200 Index, financials make up 25.13% of the index’s weighting and materials 20.23%.

In contrast, the top 5 companies in the FTSE 100 are pharma giants AstraZeneca plc (LSE: AZN) and GlaxoSmithKline plc (LSE: GSK), followed by British American Tobacco PLC (LSE: BATS), HSBC Holdings plc (LSE: HSBA) and Diageo plc (LSE: DGE).

Following that, we have Unilever plc (LSE: ULVR), Rio Tinto plc (LSE: RIO) (yes, Rio Tinto Limited (ASX: RIO) is dual-listed in London), Reckitt Benckiser Group plc (LSE: RB), BP plc (LSE: BP) and Royal Dutch Shell Plc (LSE: RDSA).

The FTSE 100’s largest sector weighting is to Consumer Staples (17.8%). That brings a lot of diversification to an ASX-dominated portfolio in my view.

Secondly, I think it’s cheap right now. Ongoing ructions in Brexit negotiations, as well as a new outbreak of coronavirus cases in the UK (leading to more restrictions), has recently pushed both the FTSE index and the British Pound Sterling lower. Today, F100 units have a 52-week range of $7.20-$11.50. Yet today, they’re asking just $8.04. That looks pretty good to me.

Foolish takeaway

I was very happy to add this ETF to my portfolio recently. I don’t expect it to be the best performer in my portfolio (although I’m happy to be pleasantly surprised on that front). But it adds ballast in the form of some valuable diversification as well as a healthy stream of dividend income.

More reading

• Gold retreats! Is this a buying opportunity?
• How Elon Musk’s Tesla delivered a body blow to these ASX stocks
• Nufarm’s (ASX:NUF) share price retreats giving back yesterday’s gains
• BHP (ASX:BHP) share price falls despite new option agreement
• Crashing gold price could still rally to record high before year-end: Citi

Sebastian Bowen owns shares of Betashares FTSE 100 ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Diageo, GlaxoSmithKline, HSBC Holdings, and Unilever. 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 Why I just bought shares of this ASX ETF appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2RT4pWP

While all eyes have been on the S&P/ASX 200 Index (ASX: XJO) and its near-5% slide over the past month, another asset has been slipping too. The gold price has accompanied the ASX 200 on the downwards slope, falling close to 10% in value since reaching a new record high of US$2,161 an ounce back in early August. Today (at the time of writing), gold is asking just US$1,857 an ounce. That’s even below the US$1,921 level, which was the 9-year all-time high that gold breached earlier this year.

Predictably with this move, ASX gold miners and exchange-traded funds (ETFs) have been feeling the pain. The share price of the ASX’s largest gold miner Newcrest Mining Limited (ASX: NCM) is down 17% since early August. Other mid-tier producers like Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) are also down – 11.15% and 19.15% respectively – over the same period. The VanEck Vectors Gold Miners ETF (ASX: GDX) is down 14.96% since 6 August, while the pure gold play ETFS Physical Gold ETF (ASX: GOLD) is down 7.3%.

So is this a buying opportunity for the yellow metal?

An auric opportunity for gold?

It has been interesting to see this precious metal fall so handily at the same time as the share market. Gold is normally viewed as a ‘safe haven’ asset. That means it should theoretically move conversely to ‘growth assets’ like shares. But that logic has always been very flexible anyway, so don’t take too much from it.

So, if you’re interested in owning gold, ask yourself why do investors traditionally own this asset? The conventional reasons range from ‘inflation hedge’ to ‘protection against a share market crash’ or for the more pessimistic investors out there: ‘a hedge against the system collapsing’.

All of these reasons have fairly strong historical backing but are not immune from the odd hole. Regardless, I do think there are strong arguments for a gold case in 2020, especially after this pullback. The biggest drawcard the yellow metal has right now (for me anyway) is its scarcity. Gold can’t be printed or issued, it can only be mined. We’re increasingly living in a world of financial engineering. What central banks around the world are doing right now is truly unprecedented. Never before has the United States had the levels of debt it does today. And never before has the US Federal Reserve had more than US$7 trillion in assets on its balance sheet.

Now it’s possible that all of these factors don’t amount to much in the future. But again, I don’t think we can say it won’t. With numbers of this scale, future inflation, future deflation and a loss of ‘reserve currency status’ are all possibilities for the US dollar. And a precious metal is a good asset to own in all of these scenarios.

Foolish takeaway

I look at gold as more of an insurance policy than anything else. It is a valuable asset that can give your portfolio some diversification and balance. But it’s also an unproductive asset offering no yield, as Warren Buffett often says. If you’re willing to accept these parameters and are looking to add a bit of gold to your portfolio (whether it be physical gold, an ETF or a gold miner), then I think today is a good time to do it.

More reading

• Why I just bought shares of this ASX ETF
• How Elon Musk’s Tesla delivered a body blow to these ASX stocks
• Nufarm’s (ASX:NUF) share price retreats giving back yesterday’s gains
• BHP (ASX:BHP) share price falls despite new option agreement
• Crashing gold price could still rally to record high before year-end: Citi

Motley Fool contributor Sebastian Bowen owns shares of Newcrest Mining Limited. 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 Gold retreats! Is this a buying opportunity? appeared first on Motley Fool Australia.

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