The presidential elections in the USA, the geopolitical standoff between China and Australia over commodity exports, and of course the elephant in the room – post Covid19 economy. This is one of the most testing times for global stock markets, the ASX included. With record low interest rates and bond yields affected, buying shares to preserve wealth has become absolutely crucial.
The federal government has been pumping money into the economy in a desperate need to revitalise it. While it is absolutely necessary, it does increase inflation to levels that are not desired. Why should you care? Well, inflation in the biggest killer of your wealth. High inflation means your money loses its value quicker than it usually does. In order to preserve your wealth, theoretically speaking, you would have to invest it where the returns are higher than inflation. With bond yields low, the stock markets become the next safest choice. However, the ASX is home to thousands of stocks, and it becomes rather important to know what shares to buy now given everything that is happening in the world.
Look no further. We got you covered! Here are our top picks from ASX shares that we hold in our portfolios. This should give you a better idea as to what ASX share to buy given the risks and uncertainties that are affecting stock markets.
The mineral exploration company produces a premium grade of Sulphate of Potash (SOP). SOP is used by farmers to reduce the chloride content in crops. SO4 has shown promise early on in its business cycle. They already have offtakes for over 92% of their production capacity and cash flows are expected to kick-in during Q2 of 2021.
The market seems to be turning towards lower chloride products and this will give SO4 an edge. They have also priced their product at USD 550/tonne – on the lower end of the global price range. The firm also has upcoming projects in its pipeline that will surely boost production in the future.
The financial metrics that we have looked at in our report also suggest that the company is financially healthy and is definitely an ASX stock to buy.
AGL Energy is in distress currently. The negative performance in FY2020 has been recognised by the market and the stock price has dropped considerably. Electricity prices and demand has dropped and hence, the firm has been affected. The demand however, will bounce back as Australia recovers from the pandemic.
Another consideration the market already looks to have made is the guidance forecast for FY2021. The share price looks like it is already reflecting the decreased profits that are expected in FY2021- limiting the downside for investors who want to buy shares of AGL.
The balance sheet is strong and the dividend policy is gold!
The medical equipment manufacturer’s business model has benefitted from the pandemic. Tele-medicine and out-of-hospital care are markets and industries that will define healthcare in a post pandemic world. ResMed’s SaaS product that enables healthcare providers to better care for their patients and measure results is already seeing high growth rates. Our estimates suggest that the growth will be stronger in the years to come.
During the pandemic, demand for ventilators has soared and ResMed has increased its production capacity by 3.5x during the year. The market for its other business segment – sleep apnea care is also huge and research suggests that it will take off as health and wellness becomes a more important part of people’s lives in a post pandemic world with altered consumer behaviours.
It looks like ResMed is ticking a lot of boxes to make it an ASX share to buy for the long-term, something our members already know from our thorough financial analysis of the firm.
The ASX-100 listed company provides real estate to the digital world. The firm has and is continuing to benefit from the push towards a digital economy by offering data centre and connectivity solutions, among other services. The firm currently operates 9 data centres in Australia and is already servicing clients such as Amazon’s AWS wing.
At a time in which the global economy has been thrown down a hold, Nextdc has emerged from down under and surged by more than 100% in 2020. The future is very bright for the firm as permanent changes to doing business online will drive growth organically for the firm. Nextdc has not just weathered the Covid19 storm but looks like it is emerging out of the crisis stronger than before. Why? Our Nextdc analysis dwells into its unit economics and metrics that determine its strength and potential. That being said, this is definitely a share you want to buy for the future!
The human fertility and assisted reproductive services are estimated to grow in the coming years. MVF operates 21 fertility clinics, 18 ultrasound clinics, 3 centres for assisted reproduction, 2 diagnostic labs, and 1 hospital. MVF operates in Australia and Malaysia and is one of the biggest players in this space. The firm has been acquiring clinics to integrate diagnostic services with fertility – both industries are likely to see high growth in the coming years. To reduce the impact of the pandemic, the firm has also reduced debt recently, making the firm financially flexible.
What’s better is that they also pay dividends! Surely an ASX share to buy considering its financial health and future potential.
With inflation set to increase and interest rate forecasted to go negative in the future, it is important to turn towards stocks to be able to realise returns. However, it is a rather tricky affair staying up to date with the thousands of listed assets and picking the right ones, as sometimes markets can be deceiving. At Shares in Value, we do that for you by fundamentally analysing stocks to help you make informed decisions in your quest to manage your wealth.