There are some ASX shares that I’d buy for my portfolio in August 2020. Investors need to tread carefully at the moment due to COVID-19.
It’s difficult to know where the share market is going to go next with so much uncertainty. The economic outlook is being heavily impacted by the healthcare uncertainty.
I’m cautious about a number of industries where there may be more more uncertainty. For example, banks like CBA (ASX: CBA) face potential earnings hits from an increase of credit provisions – an expectation that some loans may not be paid. Particularly because of Victoria’s heavier restrictions.
With that in mind, these are three ASX shares I’d buy in August:
Bubs (ASX: BUB)
The Bubs share price has sunk 14% since it gave its FY20 update to investors. But I think the current valuation makes the business look good value.
Whilst the third quarter brought forward a lot of sales – and took away from Q4 – there was still plenty to be positive about.
China direct sales in the fourth quarter increased by 26% and now represents 22% of gross revenue. Other export market, excluding China, sales were up 71% in the fourth quarter.
I’d like to find businesses which can keep growing no matter what happens next with COVID-19. I think there are plenty of factors to like about Bubs. There’s plenty of potential for long term growth.
WHSP (ASX: SOL)
Investment house WHSP has been operating for over a century. It has survived through world wars, the Spanish Flu and Gangnam Style.
The company is defensively positioned with big holdings of essential businesses like TPG (ASX: TPG) and Clover Corporation (ASX: CLV). I think it’s well suited to ride through whatever happens next with COVID-19.
One strong point about WHSP is its dividends. It has grown its dividend every year for two decades. Now that’s income security.
Goodman Group (ASX: GMG)
Goodman Group is one of the biggest property businesses on the ASX. It builds and owns industrial properties and business parks. Logistics is increasingly important in this world where logistics and eCommerce are more important.
One of Goodman’s biggest clients (by rental income) is Amazon, which is seeing big growth right now due to all of the online shopping. Goodman could be a good way to get exposure to this theme.
However, the main issue here is that valuations are being pushed up a lot by low interest rates. Increasing interest rates could hurt Goodman’s valuation.
Summary
I think each of these ASX shares have long term growth potential, offer fairly defensive earnings and could be resilient if COVID-19 causes more earnings impacts. For growth I think Bubs is the obvious pick and WHSP is a solid dividend idea. But there are other ASX dividend shares and ASX growth shares out there to consider.
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