The Motley Fool

Where to invest $5,000 into ASX shares right now

If I had $5,000 to invest I’d want to put to work into ASX shares right away.

I think that (ASX) shares are the best way to grow your wealth over the long-term, plus they don’t require any effort and most shares pay dividends.

If I were investing $5,000 into ASX shares right now, I’d pick these three shares:

Webjet Limited (ASX: WEB) – $2,000

The recovery of Webjet’s share price continues as worries about the coronavirus start to subside.

It’s certainly true that the FY20 result is going to be a bit of a mess, particularly due to Thomas Cook’s collapse. And the coronavirus won’t have helped earnings. But these issues should be quite short-term and hopefully resolved over the next few months.

In the FY20 half-year result the company is expecting underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of at least $80 million, which excludes one-off revenues & costs and the impact of AASB16. This would be growth of more than 37%.

I’m not sure the FY20 full-year result will be exactly what the company was expecting, but I think FY21 will deliver very attractive profit growth if it hasn’t been taken over before then.

Webjet is trading at 14x FY21’s estimated earnings.

Brickworks Limited (ASX: BKW) – $1,000 

A year ago it seemed like the construction industry was facing a bit of a slump. Brickworks’ building products division was obviously going to be affected too.

But now it seems that things are turning around. Just look at the numbers that Mirvac Group (ASX: MGR) reported today. A few months ago Brickworks said that it was experiencing a monthly rise in its order book. Things seem to have turned around. 

The cash stream from its industrial property trust and investment divisions continue to be reliable and growing, supporting the current Brickworks dividend.

Brickworks has a great opportunity to become a sizeable player in the US after making a few brickmaker acquisitions.

PM Capital Global Opportunities Fund Ltd (ASX: PGF) – $2,000 

The global share market continues to be difficult to predict, but that’s a good thing in my opinion. With listed investment companies (LIC) there are different investment styles and different managers that focus on different shares.

PM Capital Global Opportunities has a wide investment flexibility to look across the world and isn’t afraid to go for shares that are unloved if they appear undervalued such as European housebuilders or international banks.

The LIC has been a solid performer. It charges a lower management fee than many other global-focused Australian fund managers and this LIC is currently trading at a 14% discount to the net tangible assets (NTA) at 31 January 2020.

Foolish takeaway

I believe that all three of these shares can beat the ASX’s returns over the next few years, even if there’s some short-term volatility because of the coronavirus. I think Webjet and PM Capital look particularly good value, which is why I allocated more money to them.

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Motley Fool contributor Tristan Harrison owns shares of PM Capital Global Opportunities Fund Ltd. The Motley Fool Australia has recommended Brickworks and Webjet Ltd. 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.