3 ASX stocks I tell my clients to buy: Advisor

Ask a fund manager

The Motley Fool talks to the best in the industry so you can get a taste of how the pros think. In this edition, Shaw and Partners’ Senior Investment Advisor, Adam Dawes, shares three buying tips.

Investment style

The Motley Fool: How would you describe your services to a potential client?

Adam Dawes: I work for Shaw and Partners, but I’m a stockbroker who deals with clients to talk about their financial wealth, grow their financial wealth, and meet their investment needs. It’s quite simple.

FM: Do you have a particular investment philosophy?

AD: Our investment philosophy is always to seek out the best companies that sit inside the ASX or the S&P/ASX 300 (ASX: XKO). But then having a bit more alpha to try and find some of these smaller companies that are really going to excite client wallets.

But usually you stick with that main part of the portfolio and then you just try to find some of those smaller stocks that will outperform over a longer period of time.

FM: Does the horizon sound more long-term than short-term?

AD: Well, it’s longer term. I think you must be, investing.

People, they want to be rich in a year. And I say, “Well, I’m not that kind of adviser.”

Most Popular ASX Shares

FM: What are the three best stock buys right now?

AD: OK. So on the one hand we really like Wesfarmers Ltd (ASX: WES) at present. There’s a lot of talk about not only the discretionary side of consumers, but also the other businesses that they own, which is lithium battery technology and that sort of thing. So I think it’s definitely going to do that well.

We saw the market upgrade numbers on Wesfarmers the other day. So I think [it’s a] good quality blue chip stocks. I think this one is a good buy at the moment.

FM: The stock price has gone down a bit, right?

AD: Certainly yes. That’s why I think there’s some value there right now.

Speaking of prices that have gone down, so there’s [also] Xero Limited (ASX:XRO). It looks really, really good. Here it is $87, $88 anywhere today.

I think it’s definitely one of those, those tech stocks that have topped 40% and look pretty good for the future.

My third is a small speculative stock, which I hold myself. It’s a company called Terracom Ltd (ASX:TER)and it is a stock of coal.

This one, obviously the smut is a bit on the nose at the moment, but it’s certainly a very interesting deal.

FM: The stock price has done spectacularly well this year.

AD: Yes it is. We’ve had a lot of 50 cent customers and we’ll continue to do well because basically they’ve just paid off all of their debt that they’ve had over the last two or three years. It’s all been paid for now.

And they talked about coming back into the market as dividend-pay shares in the future.

Now, you never buy resource stocks for dividends, but Terracom is looking to pay fairly high dividends as you approach the end of the fiscal year and the end of the calendar year. And they own a mine called Blair Athol, who’s an ex Rio Tinto Limited (ASX:RIO) mine. And, certainly, with coal prices where they are right now, it’s a good little business to own, going forward.

FM: What do you think of the price of coal? The higher it is, could you say that there are more possibilities of falling?

AD: Well, if you eliminate Russia and Ukraine. I don’t know about you, but I don’t think this is going to be fixed anytime soon. This is definitely something that will keep the price of coal higher.

Clearly, the world is moving towards a coal-free position or towards greener energy. But in the meantime, coal is definitely needed to power India, to power many countries around the world.

People like to have cheap energy and we don’t see that right now. It’s definitely something that overall is going to be quite difficult. So I think that will definitely mean things will continue to support the price of coal going forward.

#ASX #stocks #clients #buy #Advisor

Leave a Comment

Your email address will not be published. Required fields are marked *