In this article, we will take a look at the 10 best ASX stocks to buy now.
The stock market in Australia is one of the most high performing and active ones in the world. It is estimated that close to 9 million adults in the country hold investments outside their primary dwelling and more than half of these investments are in direct shares. Building onto these solid foundations is the record influx of new investors in the market. Almost a quarter of all adults in Australia started investing in the last two years only. Women investors comprise more than 45% of these new investors and are trailblazing their way through the market highs and lows.
The fresh perspectives that these new investors bring to the fore have shaped market dynamics in Australia much like the rest of the world. However, due to the nature of the Australian economy, where a handful of sectors like energy and finance dominate the market, the traditional power players seem to have weathered this storm. However, the losses incurred as a result of the COVID-19 pandemic and under the calls for increased urgency in relation to climate change action by global actors, an introspection has led to more focus on diversification.
One of the top picks in the Australian market, Oil Search Limited (ASX: OSH.AX), has been conducting air quality checks around its exploration facilities to maintain pollution levels to a minimum under government regulations. Oil Search Limited (ASX: OSH.AX) has also put in place a plan to more effectively manage waste, effluents, and spills on these sites. However, big oil companies in Australia have also recently admitted that they are facing issues in getting financing for new projects as climate concerns grow.
The retail sector has been adapting to market changes better than expected. Wesfarmers Limited (ASX: WES.AX), one of the largest retail firms on the Australian market, recorded more than $20 billion in revenue last year despite the hit in sales due to the pandemic. Wesfarmers Limited (ASX: WES.AX) is also planning to make Kmart, one of three big retail chains it owns and runs, one of the key focus areas for the firm on the back of stellar sales numbers and plans for technology-enabled growth and scaling solutions.
Some dual-listed stocks, that trade both in Australia and the United States, are also worth a mention in the top ASX stocks. Rio Tinto Group (NYSE: RIO) and BHP Group (NYSE: BHP) are among these options. Rio Tinto Group (NYSE: RIO) and BHP Group (NYSE: BHP) both engage in the mining of natural resources. The companies were hit by the lockdowns imposed to contain the COVID-19 pandemic but are now on the rebound trail as the economy slowly reopens and allows for the resumption of business activities.
Things are a little more topsy and turvy for the finance companies in Australia. Westpac Banking Corporation (ASX: WBK) was forced to cancel dividend payments last year as the COVID-19 crisis took a toll on the company. However, with the financial outlook improving in recent weeks, Westpac Banking Corporation (ASX: WBK) announced a semi-annual dividend of AUD 0.58 per share on May 11 that will be payable to shareholders next month. Despite the upside potential, the growth of fintech and crypto still clouds long-term positions on finance.
Before investing, you should practice caution and do a lot of research, as financial volatility is making things difficult even for the smart investors. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26th 2021 our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
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With this context in mind, here is our list of the 10 best ASX stocks to buy now.
Best ASX Stocks to Buy
10. Woolworths Group Limited (ASX: WOW.AX)
Woolworths Group Limited (ASX: WOW.AX) is a Bella Vista-based retail company. It is placed tenth on our list of 10 best ASX stocks to buy now. It was founded in 1924. The firm runs more than 1,000 supermarkets and food stores across Australia. It has operations in New Zealand as well. The firm also markets branded beverages and runs more than 334 hotels. Woolworths stock has returned more than 16% to investors over the past year. The hotel division of the firm offers leisure and hospitality services, as well as entertainment and gaming.
Woolworths Group Limited (ASX: WOW.AX) is one of the top stocks in the Australian market, mostly due to the core retail business. A bigger name in the retail sector globally is Walmart Inc. (NYSE: WMT), the US-based giant of the industry.
At the end of the fourth quarter of 2020, 70 hedge funds in the database of Insider Monkey held stakes worth $6.1 billion in Walmart Inc. (NYSE: WMT), up from 69 the preceding quarter worth $5.4 billion.
9. Sonic Healthcare Limited (ASX: SHL.AX)
Sonic Healthcare Limited (ASX: SHL.AX) is a Sydney-based medical firm founded in 1934. It is placed ninth on our list of 10 best ASX stocks to buy now. Sonic stock has returned more than 27% to investors in the past year. The firm markets laboratory, pathology, and radiology services. It runs more than 200 primary care clinics and has operations in the US and Germany in addition to Australia. It has a market cap of more than $13 billion and posted more than $4.7 billion in annual revenue in the past fiscal year.
Sonic Healthcare Limited (ASX: SHL.AX) has managed to sustain itself through the pandemic crisis and all the signs bode for its future. AbbVie Inc. (NYSE: ABBV), an American pharma firm, has done remarkably well through the economic crisis too.
Out of the hedge funds being tracked by Insider Monkey, Nebraska-based investment firm Berkshire Hathaway is a leading shareholder in AbbVie Inc. (NYSE: ABBV) with 25 million shares worth more than $2.7 billion.
8. Woodside Petroleum Ltd (ASX: WPL.AX)
Woodside Petroleum Ltd (ASX: WPL.AX) is a Perth-based oil company founded in 1954. It is ranked eighth on our list of 10 best ASX stocks to buy now. The firm markets liquefied natural gas, pipeline natural gas, condensate, liquefied petroleum gas, and crude oil. It has stakes in several notable oil exploration and production projects, including the Greater Browse, Greater Sunrise, Greater Pluto, Greater Exmouth, North West Shelf, Wheatstone, Canada, Senegal, Greater Scarborough, and Myanmar project, among others.
Like Rio Tinto Group (NYSE: RIO) and BHP Group (NYSE: BHP), Woodside is one of the best Australian companies.
The profits of Woodside Petroleum Ltd (ASX: WPL.AX) have taken a hit in recent months as oil prices plunged due to the virus crisis as well as a production war. Exxon Mobil Corporation (NYSE: XOM), a US-based oil firm, has undergone a lean spell as well.
At the end of the fourth quarter of 2020, 63 hedge funds in the database of Insider Monkey held stakes worth $2.2 billion in Exxon Mobil Corporation (NYSE: XOM), up from 52 in the preceding quarter worth $1.3 billion.
7. APA Group (ASX: APA.AX)
APA Group (ASX: APA.AX) is a New South Wales-based firm that owns natural gas and electricity generation assets. It is placed seventh on our list of 10 best ASX stocks to buy now. The firm also owns and operates solar and wind farms. It has a market cap of close to $9 billion and pays a healthy dividend regularly. The firm has stakes in almost 15,000 kilometers of gas transmission pipelines, almost 29,500 kilometers of gas mains and pipelines, as well as 1.4 million gas consumer connections. Like Rio Tinto Group (NYSE: RIO) and BHP Group (NYSE: BHP), APA is one of the best Australian companies.
A top play in the energy sector along the lines of APA Group (ASX: APA.AX) would be Plains All American Pipeline, L.P. (NASDAQ: PAA), a Texas-based energy transportation company primarily operating in the US and Canada.
Out of the hedge funds being tracked by Insider Monkey, investment firm Arrowstreet Capital is a leading shareholder in Plains All American Pipeline, L.P. (NASDAQ: PAA) with 5.1 million shares worth more than $42 million.
6. Telstra Corporation Limited (ASX: TLS.AX)
Telstra Corporation Limited (ASX: TLS.AX) is a Melbourne-based telecommunications firm. It was founded in 1975 and is ranked sixth on our list of 10 best ASX stocks to buy now. It is one of the largest firms in Australia and markets voice, mobile, internet access, pay television and other products in addition to the telecom services. Telstra stock has returned close to 12% to investors over the past twelve months. The company has been expanding reach into the tech sector in recent years with forays into the cloud storage business. Like Rio Tinto Group (NYSE: RIO) and BHP Group (NYSE: BHP), Telstra is one of the best Australian companies.
Telstra Corporation Limited (ASX: TLS.AX) is a telecom giant in Australia, just like Verizon Communications Inc. (NYSE: VZ) in the US. Income investors should definitely consider investing in them as they pay regular dividends.
At the end of the fourth quarter of 2020, 67 hedge funds in the database of Insider Monkey held stakes worth $10.5 billion in Verizon Communications Inc. (NYSE: VZ), up from 65 in the previous quarter worth $2.7 billion.
5. Sydney Airport Limited (ASX: SYD.AX)
Sydney Airport Limited (ASX: SYD.AX) is a Sydney-based company founded in 1919 that owns the Sydney Airport and provides aviation-related services in Australia and internationally. It is ranked fifth on our list of 10 best ASX stocks to buy now. Over the past year, Sydney Airport stock has returned close to 5% to investors despite the pandemic crisis. Some of the services offered by the firm include access to terminals, infrastructure, apron parking, and airfield and terminal facilities, as well as commercial space leasing.
Sydney Airport Limited (ASX: SYD.AX) stock is set to surge, just like counterparts in the US, as international travel resumes with the rollout of the COVID-19 vaccine. American Airlines Group Inc. (NASDAQ: AAL) is another good option for the post pandemic economy.
Out of the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in American Airlines Group Inc. (NASDAQ: AAL) with 13.5 million shares worth more than $324 million.
4. Wesfarmers Limited (ASX: WES.AX)
Wesfarmers Limited (ASX: WES.AX) is a Perth-based retail company founded in 1914. It is placed fourth on our list of 10 best ASX stocks to buy now. In addition to retail, the firm has interests in the chemical and fertilizer businesses. Wesfarmers stock has offered returns exceeding 39% to investors in the past year. The firm primarily sells building equipment and home improvement products through its retail outlets. It also also manufactures and distributes ammonia, ammonium nitrate, and other industrial chemicals.
Wesfarmers Limited (ASX: WES.AX) is one of the top retail stocks in Australia. Over on the other side of the Pacific, Costco Wholesale Corporation (NASDAQ: COST) is also posting strong numbers despite the coronavirus crisis.
At the end of the fourth quarter of 2020, 61 hedge funds in the database of Insider Monkey held stakes worth $3.6 billion in Costco Wholesale Corporation (NASDAQ: COST), down from 73 in the preceding quarter worth $3.8 billion.
3. Treasury Wine Estates Limited (ASX: TWE.AX)
Treasury Wine Estates Limited (ASX: TWE.AX) is a Melbourne-based wine maker. It is placed third on our list of 10 best ASX stocks to buy now and was founded in 1843. The company owns brands such as Penfolds, Beringer, Lindeman’s, Wolf Blass, 19 Crimes, and Chateau St Jean, among others. The firm owns more than 8,000 hectares of planted vineyards in Australia, as well several hundred more overseas in New Zealand, the US, and Italy. Treasury stock has returned more than 9% to investors in the past twelve months.
Just like Treasury Wine Estates Limited (ASX: TWE.AX) in Australia, the Brown-Forman Corporation (NYSE: BF-B), based out of the United States, is a premier play in the alcohol business on the global scale.
Out of the hedge funds being tracked by Insider Monkey, London-based investment firm Fundsmith LLP is a leading shareholder in Brown-Forman Corporation (NYSE: BF-B) with 10.2 million shares worth more than $814 million.
2. Westpac Banking Corporation (ASX: WBK)
Westpac Banking Corporation (ASX: WBK) is a Sydney-based bank and financial services provider founded in 1817. It is placed second on our list of 10 best ASX stocks to buy now. Westpac stock has returned more than 99% to investors over the past year. The bank has operations in New Zealand in addition to Australia. Some of the services marketed by the bank include loans, insurance, and business transactions, among others. It has a market cap of more than $72 billion and posted more than $12 billion in annual revenue in 2020.
For those interested in banking stocks with strong fundamentals like Westpac Banking Corporation (ASX: WBK), a good option would be Bank of America Corporation (NYSE: BAC), one of the biggest finance names in the United States.
At the end of the fourth quarter of 2020, 99 hedge funds in the database of Insider Monkey held stakes worth $35 billion in Bank of America Corporation (NYSE: BAC), up from 88 in the preceding quarter worth $26 billion.
1. Oil Search Limited (ASX: OSH.AX)
Oil Search Limited (ASX: OSH.AX) is a Papua New Guinea-based oil and gas development and exploration firm. It was founded in 1929 and is placed first on our list of 10 best ASX stocks to buy now. The company has business interests in the United States and Australia in addition to the home country. Oil Search stock has returned more than 22% to investors in the past year. The firm has proved and probable reserves, and contingent resources comprising almost 547 million barrels of oil and 3,956 billion cubic feet of gas.
Investors looking for companies similar to Oil Search Limited (ASX: OSH.AX) can put their money into Chevron Corporation (NYSE: CVX), a Californian oil firm on the rebound trail after a torrid 2020.
Out of the hedge funds being tracked by Insider Monkey, Nebraska-based investment firm Berkshire Hathaway is a leading shareholder in Chevron Corporation (NYSE: CVX) with 48 million shares worth more than $4 billion.
You can also take a peek at 10 Best Travel Stocks to Buy Right Now, and 10 Best Automotive Stocks to Invest in Now.
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Disclosure: None. 10 Best ASX Stocks to Buy Now is originally published on Insider Monkey.
