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We may soon see the passing of the baton between outperforming growth stocks and underperforming value stocks.

The bull run seems to have stalled recently and it’s the popular growth stocks that are weighing on the S&P/ASX 200 Index (Index:^AXJO).

Questions about their overstretched valuations are likely to linger and that means this could be the time for the laggards to shine.

Why laggards could prove to be better value buys

Value stocks have recently been outperforming growth as the ASX 200 benchmark retreated around 5% from last month’s peak.

Growth stocks are those that trading on high price-earnings (P/E) multiples. Investors have been willing to pay a premium for earnings growth in this low-growth COVID-19 environment.

Value stocks are the opposite. The are seen as cheap as their share prices have so far failed to keep pace with the bull market and that puts them on undemanding P/Es.

I suspect some of these underachievers can outperform even if the top 200 stock index trades sideways or slips a little further.

The building stock deepest in value territory

One of these value laggards that I think look interesting is the CSR Limited (ASX: CSR) share price. The uncertain outlook for construction activity is keeping buyers at bay even though the building materials supplier delivered a better than expected full year results in May.

While that may feel like a long time ago on ASX time, investors may again be reminded of this come November when CSR posts its half year results.

UBS thinks profit margins for its building products division will be better than what the market is expecting.

Another catalyst could be the valuation of CSR’s 450 hectors of land in Western Sydney, which the market is pricing at around $500 million. Any uplift on land valuation will be warmly received by investors.

The broker is recommending investors buy the stock as it’s trading well below its target price of $4.77 a share.

Emerging from an earnings storm

Another laggard I like is the Nufarm Limited (ASX: NUF) share price, which slumped 27% since the start of calendar 2020.

The drought in Australia and Europe weighed on the stock but the adverse weather condition is turning!

Despite this, not much good news is priced into the stock. Also, Nufarm said it would take a $215 million write down in its European assets, so the bar is set reasonably low, in my view.

The turnaround in the stock could come before the end of the month when management hands in its full year results.

It won’t be the FY20 numbers that will trigger a rally as management already released the earnings number. It’s the outlook statement that investors will be scrutinising. Let’s hope management will also have something upbeat to say about sales of its omega-3 enriched canola seeds.

More reading

• ASX 200 Weekly Wrap: ASX 200 snaps 4 week losing streak… just
• 5 things to watch on the ASX 200 on Monday
• 3 ASX 200 growth shares to buy right now
• ASX technology stocks to buy during this global tech sell-off
• 5 things to watch on the ASX 200 next week

Motley Fool contributor Brendon Lau owns shares of Nufarm Limited. Connect with me on Twitter @brenlau.

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

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The AMP Limited (ASX: AMP) share price is down 14.1% in the last fortnight. Shares in the Aussie wealth manager have been under pressure as media scrutiny and culture issues weigh on investors’ minds.

There’s no doubt that AMP has some challenges in the months and years ahead. But does it make sense to buy in at $1.40 per share?

Why the AMP share price is under pressure

For one thing, there has been a significant management overhaul in recent weeks. The wealth manager’s new-look board has been overhauled once again after bringing in David Murray as Chairman following the 2018 Royal Commission.

AMP’s chairman and another board member have now resigned. That paves the way for AMP to try and once again rehabilitate the wealth manager’s image after the controversy surrounding Boe Pahari’s appointment as Head of AMP Capital.

However, it’s more than just the management headaches and culture issues weighing on the AMP share price. A soft August earnings result has investors wondering just how long to hold onto the company’s shares.

The coronavirus pandemic weighed on earnings with cash outflows of $4.4 billion seeing Australian wealth earnings fall 42.7% lower.

The group does remain well capitalised with $1.4 billion in surplus capital above target requirements despite a 40% fall in AMP Capital earnings and a 29.6% drop in AMP Bank earnings.

For reference, the AMP share price is trading at $1.40 per share. That’s down 27.1% for the year and 74.2% since March 2018 in the pre-Royal Commission days.

Is now the time to buy AMP?

I think AMP is one of the riskier buys on the ASX right now. The combination of soft earnings and widespread cultural issues have wreaked havoc on the company’s valuations.

The AMP share price currently trades at an astonishing 115.4 price to earnings (P/E) ratio. That doesn’t exactly scream good value to a prudent investor.

However, a new management team and refined strategy could be the key. If we see a better than expected economic recovery from COVID-19, AMP could be well placed to surprise in August next year.

Given all of that, maybe the AMP share price is worth a look at $1.40 per share as a very speculative buy.

More reading

• ASX 200 Weekly Wrap: ASX 200 snaps 4 week losing streak… just
• These were the worst performing ASX 200 shares last week
• ASX 200 drops 0.3%, gold miners keep rising
• ASX 200 down 0.1%: Tech shares push higher, AMP (ASX:AMP) sinks lower
• Why 5G Networks, AMP, Clover, & Reliance shares are dropping lower today

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

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The S&P/ASX 200 Index (ASX: XJO) has broken its 4-week losing streak last week, but only just. The 0.1% rise in ASX 200 shares last week was enough to stop the index’s month-long losing streak from becoming 5 for 5, but it wasn’t by much. The Index is still down around 3.2% for the month of September so far, and, at the current level of 5,864.50 points, is hardly bucking the negative trends on ASX 200 share prices we have seen so far this month

In a week deplete of major, market-moving news, it was macroeconomic developments and fiscal policy that were in the spotlight. We found out on Wednesday that unemployment in Australia is far less dire than what economists believed. The national unemployment rate was 6.8% in August, down from the 7.5% we saw in July. Even though this is good news for the Australian economy (and by extension, ASX shares), it was received with little more than a blink from markets.

It was a good week for tech shares, which have been through the wringer in recent weeks when markets all of a sudden decided the tech sector was overbought. The Afterpay Ltd (ASX: APT) share price was up 2.61% for the week, which helped the S&P/ASX All Technology Index (ASX: XTX) rise 1.8% for the week.

Much of this positive sentiment was a likely byproduct of a blockbuster initial public offering (IPO) over in the United States last week, which caused quite a stir here on the ASX. The Warren Buffett-backed Snowflake Inc (NYSE: SNOW) hit the boards on Wednesday (US time) and quickly more than doubled from its IPO price of US$120 per share, rising as high as US$319 before settling back at US$240 at market close on Friday. My Fool colleague Tony Yoo discussed how Aussie investors couldn’t seem to get enough of this new cloud company after IPO here.

How did the markets end the week?

Even though the ASX 200 only recorded a 0.1% rise for the week, it was still a topsy turvy week of trading. The ASX 200 started off on the right foot with a 0.7% rise on Monday. Tuesday then brought a flat day, which was backed up on Wednesday with another 1% rise (likely assisted by the better-than-expected national unemployment numbers).

But then Thursday came and brought with it a 1.2% drop, which was backed up on Friday with another 0.32% slide. All in all, the ASX 200 started off at 5,859.4 points and finished up at 5,864.5 points for a week-to-week gain of 0.1%.

Meanwhile, the All Ordinaries Index (ASX: XAO) had a slightly better week after rising from 6,038.9 points on Monday to 6,057.6 points by Friday – a week-to-week gain of 0.5%.

Which ASX 200 shares were the biggest winners and losers?

Time now for our most salacious section, so put the kettle on for our winners and losers of the week. As always, we’ll start with the losers:

Worst ASX 200 losers	% loss for the week
Cleanaway Waste Management Ltd (ASX: CWY)	(13.5%)
Unibail-Rodamco-Westfield (ASX: URW)	(10.5%)
AMP Limited (ASX: AMP)	(9.1%)
Virgin Money UK (ASX: VUK)	(8.1%)

Taking out last week’s wooden spoon was waste management company Cleanaway Waste. Cleanaway Waste makes a rare appearance, as it’s a company that has generally been more prone to reward shareholders than disappoint in recent times. However, it wasn’t the case last week, when investors marked Cleanaway down for workplace misconduct allegations over its CEO Vik Bansal. Cleanaway’s board of directors has advised that Mr Bansal is on his final warning, but that didn’t stop the markets from sending Cleanaway shares down 13.5% last week.

Next up we have struggling REIT Unibail-Rodamco-Westfield, the owner of the Westfield brand outside Australia and New Zealand. Unibail released a ‘reset plan’ last week, which outlined a 3.5 billion euro capital raising to help the company reduce its debt load. Investors weren’t impressed.

Embattled wealth manager AMP again made the losers list last week, but this was mostly due to the company trading ex-dividend on Friday (perhaps the best reason for a share price to drop there is). Shareholders will be receiving 10 cents per share on 1 October.

Now with the losers out of the way, let’s check out last week’s winners:

Best ASX 200 gainers	% gain for the week
Perseus Mining Limited (ASX: PRU)	14.2%
Perenti Global Ltd (ASX: PRN)	11%
Eagers Automotive Ltd (ASX: APE)	10.5%
Blackmores Limited (ASX: BKL)	9.7%

Leading the winners last week was gold miner Perseus. Perseus Mining seemed to be benefitting from a broker note out of Credit Suisse. All gold miners last week were on form after the precious metal climbed in price through the week.

Next up we had mining services company Perenti, which announced an estimated $140 million contract extension at a North Queensland mine. Investors were clearly very excited about this development with Perenti’s 11% gain for the week.

Following up, we had car dealer Eagers. Investors have been rising this one up ever since the company told the market that it intends to purchase 8 new car yards with $105 million last week. After last week’s gains, Eagers is less than 6% off where the share price started the year.

Finally, we had vitamin hawker Blackmores, whose shares rose close to 10% despite there being no major news out of the company.

What does this week look like for the ASX 200?

It looks like another week on the ASX where it’s even harder than usual to predict what may come our way. I’m still watching the tech space (both here and over in the US) for some major market moving events, so it will interesting to see how ASX tech shares like Afterpay perform this week.

In other news, we do have some latecomers for the August reporting season this week, mainly blood brothers Brickworks Limited (ASX: BKW) and Washington H. Soul Pattinson & Co Ltd (ASX: SOL). Investors will be very interested to take a look at these companies’ books, which will likely include some interesting numbers from the TPG Telecom Ltd (ASX: TPG) restructuring.

Before you go, here’s a look at how the major ASX 200 blue chips are looking before we get the week underway:

More reading

• Why these ASX laggards could start to rally in the next few months
• Is the AMP (ASX:AMP) share price a buy after Friday’s fall?
• 5 things to watch on the ASX 200 on Monday
• Forget term deposits and buy Coles and this ASX dividend share
• 5 stellar ASX growth shares that could smash the market in the 2020s

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

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On Friday the S&P/ASX 200 Index (ASX: XJO) was out of form and dropped lower. The benchmark index fell 0.3% to 5,864.5 points.

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

ASX 200 expected to drop lower.

According to the latest SPI futures, the ASX 200 is poised to start the week with a decline. Current futures contracts are pointing to a 36-point or 0.6% decline at the open. This follows a disappointing end to the week on Wall Street on Friday which led to the Dow Jones falling 0.9%, the S&P 500 dropping 1.1%, and the Nasdaq index tumbling 1.1%. This was the third week of declines in a row for Wall Street and due largely to further weakness in the tech sector.

Oil prices mixed.

Energy shares such as Beach Energy Ltd (ASX: BPT) and Woodside Petroleum Limited (ASX: WPL) will be on watch today after a mixed night of trade for oil prices on Friday. According to Bloomberg, the WTI crude oil price rose 0.35% to US$41.11 a barrel and the Brent crude oil price dropped 0.35% to US$43.15 a barrel. Despite this mixed finish, oil prices were up 10% over the week.

Tech shares on watch.

It could be a tough day for locally listed tech shares such as Afterpay Ltd (ASX: APT) and Xero Ltd (ASX: XRO) on Monday after their U.S. counterparts continued to slide. The tech-heavy Nasdaq index tumbled 1.1% on Friday night following a reasonably heavy decline from Apple. The tech giant’s shares are now down over 17% month to date.

Gold price pushes higher.

The shares of Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) could be on the rise today after the gold price pushed higher. According to CNBC, the spot gold price rose 0.6% to US$1,962.10 an ounce on Friday night. This led to the precious metal recording its second weekly gain in a row. A weakening U.S. dollar has been supporting the gold price.

A2 Milk given conviction buy rating.

The A2 Milk Company Ltd (ASX: A2M) share price could be going higher from here according to one leading broker. Analysts at Goldman Sachs have retained their conviction buy rating but trimmed the price target on the infant formula company’s shares slightly to $20.40. The broker notes that its shares are trading on notably lower multiples compared to the last five years. This is despite it having a very positive growth outlook over the coming years.

More reading

• 5 stellar ASX growth shares that could smash the market in the 2020s
• 3 ASX 200 growth shares to buy right now
• ASX technology stocks to buy during this global tech sell-off
• Top brokers name 3 ASX shares to sell next week
• 5 things to watch on the ASX 200 next week

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO and Xero. The Motley Fool Australia owns shares of A2 Milk. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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If you’re finding it impossible to generate a sufficient income by using term deposits, I would suggest you consider focusing on ASX dividend shares.

This is because there are a good number of shares on the Australian share market which offer vastly superior yields.

But which ones should you buy? Here are two ASX dividend shares I would buy:

BWP Trust (ASX: BWP)

Income investors might want to consider BWP Trust for their portfolio. It is the largest owner of Bunnings properties in the Australian market with 68 warehouses leased to the home improvement giant. This has proven to be a great tenant for BWP to have during the pandemic. While many retail property companies are struggling to collect rent and posting sizeable declines in profits and property valuations, it’s a completely different situation for BWP. 

In its FY 2020 full year results the company reported a 1% increase in profit before gains on investment properties to $117.1 million. Including property gains, BWP’s profit was up 24.4% to $210.6 million. This put the company in a position to be able to increase its distribution in FY 2020. Looking ahead, in FY 2021 the company expects to pay shareholders a distribution in the region of 18.29 cents per unit. Based on the current BWP share price, this works out to be an attractive 4.5% yield.

Coles Group Ltd (ASX: COL)

Another ASX dividend share to consider buying is this supermarket giant. I think it is a great share to own right now due to its defensive qualities and strong market position. As with BWP, Coles was a positive performer in FY 2020 despite the pandemic. It delivered an impressive full year result in August, with sales growing 6.9% to $37.4 billion and net profit after tax increasing 7.1% to $951 million.

The good news is that Coles has started FY 2021 in a positive fashion and appears to be in a position to deliver another solid result this year. I expect this to allow the company to reward its shareholders with another generous dividend in FY 2021. Based on the current Coles share price, I estimate that it offers a forward fully franked 3.2% dividend yield.

More reading

• How to generate $1,000 a month in dividends
• Is it time to save more or invest more in ASX shares?
• 2 outstanding ASX 200 shares for your retirement portfolio
• 2 top ASX dividend shares I would buy for income this week
• Beat an RBA rate cut with these ASX dividend shares

Motley Fool contributor James Mickleboro 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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Are you looking for a source of income in this low interest rate environment? Then I would suggest you take a look at the income options listed below.

Both options offer generous yields and could be great additions to a balanced portfolio. Here’s why I think they are in the buy zone for next week:

Fortescue Metals Group Limited (ASX: FMG)

I think Fortescue could be a good option for income investors. Iron ore prices have been very strong in 2020 and continue to trade at lofty levels. This puts Fortescue in a position to deliver exceptionally high levels of free cash flow again in FY 2021. And thanks to the strength of its balance sheet, the majority of this looks likely to be returned to shareholders once again. Estimating the dividend Fortescue will pay is difficult, but I expect a yield in the region of 6% this year.

Vanguard Australian Shares Index ETF (ASX: VAS)

Another option for income investors to consider buying is the Vanguard Australian Shares Index ETF. I think it would be a great option for investors that don’t have sufficient funds to maintain a truly diverse portfolio of dividend shares. This is because this exchange traded fund gives investors the ability to invest in the 300 shares that are listed on the S&P/ASX 300 index through just a single investment. This includes Fortescue, the big four banks, and dividend favourites such as Sydney Airport Holdings Pty Ltd (ASX: SYD) and Transurban Group (ASX: TCL). While its dividend yield for FY 2021 is difficult to predict due to the impact of dividend deferrals and reductions because of the pandemic, I still expect a decent yield in the region of 3% to 4%. From FY 2022 I would expect its yield to return to normal and be above 4% once again.

More reading

• The 3 best ETFs for passive investing
• How to make $1 million from ASX shares
• ASX 200 drops 1.2%, Mineral Resources (ASX:MIN) fell 9%
• Why City Chic, Fortescue, Nearmap, & Zip shares are dropping lower today
• ASX 200 down 0.8%: Fortescue (ASX:FMG) tumbles, Afterpay (ASX:APT) sinks lower

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

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If you’re a growth investor then you’re in luck. This is because the Australian share market is home to a large number of quality shares that have the potential to grow very strongly in the coming years.

Five top growth shares I would buy in September are listed below. Here’s why I like them:

Afterpay Ltd (ASX: APT)

I believe this payments company could be a strong performer over the 2020s. Especially given the incredible active customer growth it is experiencing in the United Kingdom and United States markets. This should be supported by expansions into Europe and Asia in the coming years.

Altium Limited (ASX: ALU)

I believe Altium can grow its revenue and earnings at a very strong rate over the next few years. This is thanks to its industry-leading Altium Designer product and its exposure to the rapidly growing Internet of Things and Artificial Intelligence markets. Together with its other growing businesses, I believe Altium will dominate its industry by 2025/26.

Appen Ltd (ASX: APX)

Another top growth share to buy right now is Appen. It is a fast-growing developer of high-quality training data for machine learning and artificial intelligence. I expect the growing importance of artificial intelligence for businesses and governments to lead to a sustained increase in demand for its services over the 2020s. 

Pushpay Holdings Group Ltd (ASX: PPH)

A fourth growth share to look at is Pushpay. It is a growing donor management and community engagement platform provider for the church market. Pushpay has been growing its earnings at a rapid rate over the last couple of years and looks well-positioned to continue this trend for some time to come. Management is aiming to win a 50% share of the medium to large church market in the future. This represents a US$1 billion opportunity and is many times greater than its current revenue.

ResMed Inc. (ASX: RMD)

A final growth share to look at is ResMed. Due to the growing demand for its industry-leading products in the fast-growing sleep treatment market, I expect it to continue its solid growth for the foreseeable future. In light of this, I believe the ResMed share price can continue to be a market beater over the 2020s. 

More reading

• ASX technology stocks to buy during this global tech sell-off
• 5 things to watch on the ASX 200 next week
• Where I’d invest $20,000 into ASX shares right now
• Where I would invest $100,000 into ASX shares
• Is it time to save more or invest more in ASX shares?

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 Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of PUSHPAY FPO NZX. The Motley Fool Australia owns shares of AFTERPAY T FPO and Appen Ltd. The Motley Fool Australia has recommended PUSHPAY FPO NZX and ResMed Inc. 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 there are a number of S&P/ASX 200 Index (ASX: XJO) growth shares that are worth buying at the moment.

Some ASX technology shares have done very well over the past year such as Afterpay Ltd (ASX: APT). Whilst the buy now, pay later sector isn’t on my radar right now, there are shares that looking very compelling:

A2 Milk Company Ltd (ASX: A2M)

A2 Milk could be the best ASX 200 share to buy right now. It has very strong international growth aspirations with a good presence in China and a growing position in the US.

In FY20 alone the company more than doubled its China label infant nutrition sales to NZ$337.7 million with USA milk revenue growth of 91.2%. I think both of these markets have very promising growth potential for the company over the next few years because A2 Milk continues to expand its store distribution.

A2 Milk is one of the few ASX shares that is doing well in both the USA and China. Just doing well in one of those markets can transform a business into a much larger entity.

I believe that the ASX 200 share has many years of good growth to come. In FY20 alone it grew revenue by 33% to NZ$1.73 billion.

Since 30 July 2020, the A2 Milk share price has dropped 18%. That means it’s now trading at 24x FY23’s estimated earnings.

Ingenia Communities Group (ASX: INA)

The ASX 200 share describes itself as a leading Australian property group that owns, operates and develops a growing portfolio of lifestyle and holiday communities across key urban and coastal markets.

It’s the holiday segment that is particularly interesting to me about the ASX share at the moment. It has a variety of caravan, camping and cabin accommodation throughout coastal and inland New South Wales and Queensland.

In FY20 its performance was resilient despite the bushfires and COVID-19 impacts. Revenue increased by 7% to $244.2 million, earnings before interest and tax (EBIT) went up 17% to $71.9 million and underlying earnings per share (EPS) grew 5% to 22.1 cents.

With international travel blocked for Aussies, there could be a lot more people visiting those holiday locations which could be a shorter-term (or long-term?) boon for the ASX 200 share. It doesn’t have any holiday parks in Victoria.

Its acquisition pipeline remains “strong” with a solid balance sheet.

Brickworks Limited (ASX: BKW)

Brickworks is currently having a tough time due to COVID-19. Construction activity is obviously lower because of the economic and restriction impacts over the last six months.

However, I think that things may change over the next year as pent-up demand leads to a resurgence in building across most of the country.

Brickworks produces and sells a number of products like bricks, roofing, paving and masonry in Australia. It’s quite connected to the Australian property market. If there is a property price resurgence as Westpac Banking Corp (ASX: WBC) predicts, then Brickworks could be a major beneficiary.

I also think Brickworks is an attractive ASX 200 share because of its defensive assets. It owns around 40% of old investment conglomerate Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) which has investments in a variety of industries including telecommunications, property, resources, pharmacies and agriculture.

The ASX 200 share also owns 50% of an industrial property trust which has exciting growth potential. The trust is constructing two large distribution warehouses – one each for Amazon and Coles Group Limited (ASX: COL). These facilities will be among the best and most technologically advanced in the country.

At the current Brickworks share price it’s trading at 11x FY21’s estimated earnings. It also has a grossed-up dividend yield of around 4.4%.

Foolish takeaway

Each of these ASX 200 shares seem like really good investment ideas to me at the current prices. Brickworks seems like a solid dividend idea whilst A2 Milk is the best value growth business in my opinion. With Ingenia, I’m not sure how long the domestic travel boost will go for.

More reading

• ASX technology stocks to buy during this global tech sell-off
• 5 things to watch on the ASX 200 next week
• How to generate $1,000 a month in dividends
• These were the best performing ASX 200 shares last week
• These were the worst performing ASX 200 shares last week

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 A2 Milk, AFTERPAY T FPO, and 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 Telstra Corporation Ltd (ASX: TLS) share price could be in the buy zone according to one leading broker.

Although Goldman Sachs has taken the telco giant off its conviction buy list, its analysts still have a regular buy rating and $3.60 price target on its shares. This price target implies potential upside of over 27% for the Telstra share price excluding dividends.

But why is the broker positive on Telstra? It has named four reasons it believes that the company’s shares are a buy at the current level. They are summarised below:

Mobile revenue growth.

The first is the arrival of 5G internet, which it believes will bring about an inflection in mobile revenues. This should be supported by the return of roaming revenues in FY 2022 once the pandemic passes and international travel resumes.

The broker explained: “A mobile inflection is approaching in 2H21 with ARPU growth to accelerate in FY22 given the 5G price changes and roaming recovery. Mobiles is the most important segment for Telstra (53% of FY21 underlying EBITDA), so ARPU growth is critical to drive ROIC higher. Positive ARPU inflections also typically drive share price outperformance (+2.6% / +5.5% alpha in subsequent 30/180 days).”

Cost saving opportunities.

A second reason to be positive is Telstra’s cost savings opportunities beyond its ongoing T22 strategy.

It said: “We expect significant productivity savings to continue past FY22, as TLS benefits from the accelerated Covid-19-driven digitization and continued reductions in the estimated $1bn in legacy fixed network costs.”

Generous dividend yield.

Another reason it is positive on the company is its generous dividend yield. Like myself, the broker believes that Telstra can maintain its dividend at 16 cents per share in FY 2021.

“Although DPS risk has increased post FY20 results, we still believe that 16c can be sustained, supported by FCF which will improve from an FY21 trough. Irrespective, given global yield compression, TLS could pay a dividend of 12c and still trade in line with its historical yield gap (to 10Y AU Bonds).”

Unlocking infrastructure value.

A final reason to be bullish on Telstra is the underappreciated value of its infrastructure.

Goldman said: “We continue to see compelling Infrastructure in Telstra, particularly the $1bn p.a. in risk-free NBN recurring payments. We estimate that InfraCo could be worth $38bn, implying RetailCo is trading on just 2.1X FY23 EV/EBITDA. Although unlikely to be a near term catalyst, at its Nov 12th Investor day, the ‘next steps towards potential monetisation’ will be outlined.”

Should you invest?

I completely agree with Goldman Sachs and believe the recent weakness in the Telstra share price is a gift for investors. This is particularly the case for income investors in this low interest rate environment.

More reading

• Telstra (ASX:TLS) share price hits a 52-week low: Is this a buying opportunity for investors?
• Interest rates to stay low for years? Buy these ASX dividend shares
• 2 top ASX dividend shares I would buy for income this week
• 3 retirement myths you can’t afford to believe
• The best ASX blue chip shares to buy after the market selloff

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Limited. 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 Goldman Sachs names 4 reasons to buy Telstra shares appeared first on Motley Fool Australia.

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Technology darlings have been leading the global market sell-off and have put investors on edge. But the shake-up may be an opportunity to buy these two ASX tech stocks.

Don’t mind the noise even as our S&P/ASX 200 Index (Index:^AXJO) is poised to open weaker after stocks like Apple Inc. (NASDAQ: AAPL) and Alphabet Inc Class C (NASDAQ: GOOG) pushed US indices to a six-week low.

Rapid P/E re-rating makes tech stocks vulnerable

Hot technology stocks on the ASX have also come off the boil recently as investors question the lofty premiums that the sector is trading at.

In fact, the very strong outperformance of ASX tech stocks since the outbreak of the COVID-19 pandemic is driven by a price-earnings (P/E) re-rating.

As the chart from UBS below shows, the share price rally from the likes of the Afterpay Ltd (ASX: APT) share price and its friends, isn’t driven by earnings growth.

What does P/E expansion mean

It is the anticipation of future growth that is convincing investors to pay more for these stocks than they would have otherwise before COVID-19.

In other words, the expanding P/E means investors are paying more for each dollar of earnings. Tech stocks in both Australia and the US are priced for perfection, and any setback will trigger a sharp sell-off.

But there’s a small handful of tech stocks that are outperforming due more to earnings growth than the P/E re-rating.

The best ASX tech stocks to buy in this sell-off

One example it the Appen Ltd (ASX: APX) share price. UBS estimates that earnings per share (EPS) growth accounted for nearly 80% of the share price performance of the machine learning and artificial intelligence company.

Appen isn’t alone. The Nanosonics Ltd. (ASX: NAN) share price is much in the same boat, even though Nanosonics is not quite an IT but a medical technology stock.

But we are splitting hairs here. The more relevant detail is that earnings growth accounted for 54% of Nanosonics share price performance in the last two years.

For this reason, UBS put the two stocks into its “preferred list” of ASX stocks to buy. At least from a risk perspective, the two stocks are technically less vulnerable to a P/E de-rating.

More reading

• 5 things to watch on the ASX 200 next week
• These were the best performing ASX 200 shares last week
• Is it time to save more or invest more in ASX shares?
• These were the worst performing ASX 200 shares last week
• ASX 200 drops 0.3%, gold miners keep rising

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Brendon Lau has no position in any of the stocks mentioned. Connect with me on Twitter @brenlau.

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (C shares) and Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Nanosonics Limited. The Motley Fool Australia owns shares of AFTERPAY T FPO and Appen Ltd. The Motley Fool Australia has recommended Alphabet (C shares), Apple, and Nanosonics 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 technology stocks to buy during this global tech sell-off appeared first on Motley Fool Australia.

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