3 ASX shares to buy in a US election selloff

There are at least 3 ASX shares I’d buy if there’s a US election selloff. There could be an opportunity to buy cheap shares related to the US.
The post 3 ASX shares to buy in a US election selloff appeared first on Motley Fool Australia. –

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I think that some ASX shares could become excellent opportunities if there is a selloff because of the US election.

According to media reporting, President Donald Trump said that he’s ending negotiations over a COVID-19 relief package and will only resume talks after the election, immediately after he wins.

The S&P 500 dropped 2% after that news, ending the day down by 1.4%. The next month could be quite volatile if the last week has been anything to go by.

There could be some ASX shares that suffer more volatility because of the upcoming US election.

With that in mind, if there’s a selloff, then these ASX shares could be buying opportunities:

Betashares Nasdaq 100 ETF (ASX: NDQ)

This exchange-traded fund (ETF) gives investors exposure to 100 of the largest businesses listed on the NASDAQ, an American stock exchange.

Many of the world’s best technology businesses are within this ETF’s holdings. Businesses like Apple, Microsoft, Amazon, Facebook, Alphabet, Tesla, Nvidia, Adobe and PayPal.

This is a high-performing ETF because of the underlying holdings. Including the annual management costs of 0.48% per annum, it has generated net returns of 22.3% over the past five years.

If this ETF falls materially then it could be one of the best investments to buy because of the long-term growth potential.

Pushpay Holdings Ltd (ASX: PPH)

This ASX share generates most of its earnings from the US because its main client base is large and medium US churches. It also reports in US dollars.

If the US share market and economy suddenly looks a bit shaky then Pushpay would still be a good buy to me, if it drops it could become an even more compelling buy in my opinion. People aren’t going to stop donating to their church just because of politics – they have continued to donate during this difficult COVID-19 crisis.

The ASX share announced that its total processing volume increased by 39% to US$5 billion in FY20 and it’s expecting to at least double its earnings before interest, tax, depreciation, amortisation and foreign currency (EBITDAF) to range of US$50 million to US$54 million. It’s looking good. 

I believe that Pushpay is one of the most promising ASX shares because of how scalable it appears to be. Its gross profit margin increased by five percentage points over FY20 to 65%. If Pushpay can keep increasing its revenue closer to its US$1 billion goal then its profit could grow even faster.

At the current Pushpay share price it’s valued at 38x FY21’s estimated earnings.

CSL Limited (ASX: CSL)

CSL is one of the highest-quality blue chip ASX shares in my opinion. It has managed to grow significantly over the past decade.

The company has been tasked with manufacturing the potential COVID-19 vaccines for Australia. That project may not be that important for the ASX share’s earnings, but it is imperative for the whole country.

CSL did really in FY20, growing its net profit after tax (NPAT) by 17% in constant currency terms. In FY21 CSL is expecting net profit to be between US$2.1 billion to US$2.265 billion. That means profit will be, at worst, flat and could grow as much as 8%.

People will continue to need quality healthcare treatments and vaccines, so demand for CSL’s services should continue to be robust even if the US election throws up some volatility.

I like that the ASX share continues to invest heavily in research and development, which will hopefully unlock future earnings streams for CSL. Its existing products were created at some point by research and it will take further breakthroughs for new life-altering products.

At the current CSL share price it’s valued at 34x FY23’s estimated earnings.

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Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of BETANASDAQ ETF UNITS, CSL Ltd., and PUSHPAY FPO NZX. The Motley Fool Australia has recommended BETANASDAQ ETF UNITS and PUSHPAY FPO NZX. 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 ASX shares to buy in a US election selloff appeared first on Motley Fool Australia.

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