Today, we’ll show you the top 5 best shares to buy now on the ASX for 2020.
Some of these stocks have already had tremendous performance and bounced back strongly from the COVID-19 induced correction.
Even though the markets have been a bit highly volatile due to the coronavirus, we are starting to see the market stablise at this level.
As the coronavirus comes under control, a lot of these stocks are looking highly attractive with good valuations or strongly geared into the recovery.
For 2020, we have put together a list of some of the best stocks to buy now on the ASX.
So let’s get started.
Best Shares To Buy Now
The hardest part about finding the best shares to buy is the ability to process a large amount of information and factors to be able to navigate the macroeconomic and fundamental environment.
Our Research team has been hard at work uncovering the best shares to buy on the ASX from small-cap to large-cap, on a macroeconomic and fundamental basis.
We’ve outlined 5 stocks that we think have strong growth potential or are undervalued.
We believe these represent some of the best value the ASX has to offer and what we consider are the best stocks to buy now.
Pushpay (ASX PPH) Sees Surge In Digital Donations Amidst COVID-19
PushPay (ASX PPH) is an Auckland headquartered company that provides integrated ChMS (Church Management Services) and donor management services to the faith and not-for-profit sectors worldwide.
The company’s biggest market is in North America where it has 98% of its clients.
The spread of COVID-19 across the world has played right into the hands of PushPay.
As customer-facing and religious organizations put a hold on in-person gatherings, they are utilizing the company’s digital services to engage with their communities digitally and provide a platform for digital giving.
At the end of last year, the company acquired Church Community Builder, a SaaS platform for the faith sector, to offer a more vertically integrated suite of services.
The company has since declared a 42% jump in customers and a 32% jump in overall revenue, both on a YoY basis.
After a brief period of underperformance for a year, after its IPO, the company has significantly outperformed the ASX200 since mid-2017.
RAIZ Invest (ASX RZI)
Today, we will look at why we like Raiz Invest Ltd (ASX RZI).
RZI is an emerging high growth company that operates RAIZ Invest, a leading mobile-first micro-investment and savings platform.
The company was initially started by Acorns, a successful micro-investing company in the US with over 7m clients.
RAIZ Invest is an innovative solution that utilizes its simple to use and appealing platform to get millennials to start investing.
RZI has over 320,000 active customers, up 52% over the past year with $581m in funds under management (FUM).
With RAIZ’s expansion into Southeast Asia just starting, the upside potential for RZI is quite promising.
Healius (ASX HLS) is an Undervalued Healthcare Services Provider in a Growing Industry
Healius is a healthcare services provider with three main businesses – pathology, imaging and medical centres.
With an aging population and a growing pathology industry, Healius is well-positioned to take advantage of the growth in this industry.
Even though the company has underperformed recently, a lot of this can be attributed to COVID-19.
As the world starts to dig itself out of the COVID-19 issue, we should see a strong rebound in revenue as a backlog of revenue is realised.
With an NTM EV/EBITDA valuation 10x lower than the likes of Cochlear (ASX COH) and 3.4x lower than CSL (ASX CSL), Healius is a good option to get exposure to healthcare with more upside potential in lieu of the more expensive options.
EML Payments (ASX EML) is a High Growth Global Leader in Alternative Electronic Payment Solutions
EML Payments is a financial services company offering payment services such as gift and reward cards.
They have seen strong growth in the EML share price on the back of record YoY growth in revenue and earnings.
We first became interested in this stock and recommending it to our clients in late August 2019 when the stock was trading at around $3.60.
Since then, the stock has rallied to over $4.40, or 22% higher in about two months time.
We think that EML payments continue to have good potential and this is why we like EML.
Codan (ASX CDA) is a Technology Solutions Provider for Mining Companies and Governments
Codan is a producer of harsh environment technology solutions for groups such as mining companies and governments.
Even though the COVID-19 issue drags on, Codan did not disappoint in its earnings.
Codan spends considerable resources in research and development, with 5 key products under development in FY21.
As CDN “sells the shovels” rather than digs for the gold, the company is considered to be well fairly insulated from the whims of commodity prices.
How We Pick The Best Shares To Buy
Stock markets are generally driven by three factors within the markets.
Understanding these forces helps us time the market and buy or sell stock at the most opportune moments.
In general, the markets and stocks are firstly driven on a short-term basis via supply and demand imbalances.
This is the order flow on a day to day basis as investors buy or sell a stock for different reasons.
This order flow is generally hard to forecast and requires strong technical analysis and understanding of the underlying market to properly time.
Secondly, markets and stocks are driven by macroeconomic forces in the medium-term.
Factors include but are not limited to changes in interest rates, consumer sentiment, government policies and so forth.
Understanding the nuances and how the different countries interact with each other in terms of trade and politics is key to understanding the forces that drive the markets as a whole.
Finally, stocks in the long-term are driven by fundamentals. Factors include but are not limited to quantitative factors such as earnings growth, profit margin and return on equity.
Qualitative factors include factors such as competition, operating environment, political and policy environment.
To be able to pick the best shares to buy now, it is essential to combine market timing, macroeconomic and fundamental analytics.
Are you still looking for the best stocks to buy in 2021? We've put together a free report on 5 stocks that we think are the best buys on the ASX right now. Download it instantly here.
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This is general advice only. MF & Co Asset Management has not considered your personal financial needs, objectives or current situation. This information is not an offer, solicitation, or a recommendation for any financial product unless expressly stated. You should seek professional investment advice before making any investment decision.