Getting into trading can be incredibly intimidating, particularly when there’s so much economic uncertainty. Not only can it be risky at the best of times but, right now, as we enter a recession, you really don’t want to go throwing away money.
That said, even as the economy plummets, after an initial dip, the last few months have seen shares stay surprisingly strong. While economists put this down to investor behavioral trends (rather than all the companies in the ASX necessarily being in a great place), and are calling it a bubble ripe to pop, the fact remains that a lot of people have put their wallet where their mouth is.
But there’s so much conflicting advice and conventional wisdom out there that even dipping your toes in the water of the stock market can seem like swimming in a cold ocean.
Don’t be left high and dry. DMARGE spoke exclusively to Luke Laretive, CEO of Seneca Financial Solutions in Melbourne, for his top three shares to invest in right now.
June 2020 Picks
All figures in Australian dollars (1 AUD = 0.69 USD at time of publishing).
Credit Corp (CCP) $16.78, market cap $1.13bn
“You’d think collecting debts in a recession would be a tough business, but this exceptionally led, industry-leader is well capitalised (recent cap raising at $12.50) and primed to buy debt ledgers at the best rates in many years. The debt ledger game is a bit like the property market, you make your money in the buying, and with competitors in decline, CCP is poised to benefit from higher margins and subsequently, above-average growth for the next few years in my opinion.”
In short: “It looks too cheap, I think it’s misunderstood by the market.”
Nearmap (NEA) $2.11, market cap $951m
“Despite much skepticism in the market place after a recent downgrade, Nearmap narrowed their guidance in late May. The company also reiterated stable customer churn, reduced cash burn and the release of a new product (AI) – all of which point to the company getting back on track after losing a significant customer and being impacted short term by Coronavirus. Nearmap is the clear leader in aerial imagery here in Australia and has a real and material opportunity in the US, an under-penetrated market. Nearmap’s scalable business model, proven management team and very reasonable valuation make it an attractive investment opportunity in my view.”
In short: “Market has doubts, I’m confident in the management.”
Golden State Mining (GSM) $0.48, market cap $19m
“A speculative pick but with a significant gold discovery (2.2m oz) only 13km down the road (De Grey Mining, DEG.ASX, market cap $737m), and identical sulphide anomalies already identified by the geologists, it could be worth a punt. The company recently raised money at 12.5c and the 10,000m+ drill program begins later this month.”
In short: “Speculative, but some encouraging signs.”
This article is of a general nature only and does not consider your objectives, financial situation or needs. You should consider the appropriateness of the information in light of your objectives, financial situation and needs before acting on it and obtain copies of any relevant disclosure documents.
Luke provides clients with a weekly note, which you can access here.