The current conditions have opened doors for some ASX shares, but closed them for others. Here are the shares on my buy, sell and watch lists.
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It has been a pretty volatile week for ASX shares, and I think this is likely to continue for a while. Between the United States election, fears over US stimulus payments and the changes in Australian subsidies, it is clear that we continue to live in an age of uncertainty. Based on the current economic situation, here is a range of ASX shares that I believe should be on your buy, watch or sell lists.
ASX shares to BUY
Jumbo Interactive Ltd (ASX: JIN) recently signed a binding term sheet to enter into negotiations with Lottery West to sell its tickets online for up to ten years. The company also renewed its deal with Tabcorp Holdings Limited (ASX: TAH) which now stretches to 2030. Jumbo already has a slew of charity lottery sellers as clients, and has started to tackle the US market.
This company is reasonably priced considering the size of its addressable market. For me, Jumbo is a buy today.
Mortgage Choice Limited (ASX: MOC) is an ASX share that has recently come alive. With the recent changes to the responsible lending laws, this company is likely to see an increase in top line revenues. At its current price, the company has a price-to-earnings (P/E) ratio of 15.3 and a trailing 12 month dividend yield of 5.7%. I think this share is a buy today because of the near-future housing situation.
ASX shares to WATCH
Boral Limited (ASX: BLD) stands out to me as the best potential turnaround story on the ASX right now. As a collection of businesses that sell building materials, this company should be pretty straightforward. Yet, it has performed poorly for years. There is, however, now a new CEO in place. Moreover, the company is renewing the board with two additional non-executive directors and two nominees from Seven Group Holdings Ltd (ASX: SVW).
Boral is committed to renewal across the board and there are already signs of US private equity players who have an interest in purchasing Boral’s US assets. I am keeping an eye on news relating to Boral and any signs of increased sales or productivity. I think this could become an opportunity.
ASX shares to SELL
If you had Woodside Petroleum Limited (ASX: WPL), or Oil Search Limited (ASX: OSH) before the March share market rout, then I believe it’s time to sell down your position. The changes in the LNG price are structural and long term, I believe. These are related to market oversupply, PetroChina exercising its price making clout, and reduced demand. I do believe these share prices will rise again over time. However, I find it hard to believe they will rise back to their pre-COVID-19 positions.
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Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Jumbo Interactive Limited. The Motley Fool Australia owns shares of and has recommended Jumbo Interactive 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.