The news of the ASX recently has been filled with red ink and bad news. Yet there are not only opportunities everywhere, but there are even more opportunities than normal.
Over my professional career, I have managed many crises. This ranged from fatalities to large scale community impacts to millions of dollars lost. I learned nothing is entirely bad nor is it entirely good. It just is and you need to manage the next decision based on the situation you are in.
So, here are 4 strategies to make a profit from ASX shares today.
Interim dividend yields
It was announced on Friday that mining billionaire Andrew Forrest had purchased $243 million worth of shares of Fortescue Metals Group Limited (ASX: FMG), the company he founded. By trading last week and not this week, Mr Forrest locked in an approximate $18 million dividend payment due on April 6.
I don’t know what drives a billionaire – but trades like this are open to everyone on the ASX today. The falling share price means a higher yield on all interim dividends yet to be paid. In the case of Fortescue, this was around 7.3%.
Every takeover is an opportunity to profit. They are a high-risk trade because of all of the parties involved and the many potential stumbling blocks. However, if the market moves as one, then the gap between the share price and the offer price grows. In the case of Liquid Natural Gas Ltd (ASX: LNG), it opened up a profit gap from around 48% to 72%.
Again, this trade is open to everyone. The falling share price made it more profitable. There are other profitable takeover bids on the ASX today, but they are not for the faint of heart.
Situations like this call for special types of companies. Companies like Ansell Limited (ASX: ANN) and Sonic Healthcare Limited (ASX: SHL) make products and provide services that are going to be in high demand over the next few months or even years. Both of these shares were trading at a discount to previous prices on the ASX yesterday.
Share prices on the ASX were falling yesterday even though many of the businesses have stayed the same.
This includes companies like Accent Group Ltd (ASX: AX1) or Lovisa Holdings Ltd (ASX: LOV) or haven investments in gold like Newcrest Mining Limited (ASX: NCM). All of these companies are more or less the same as they were two weeks ago; just cheaper.
The path to profit here can be longer than other strategies discussed. It could take months or even years. If you are a value investor this is just par for the course.
Even without considering more sophisticated areas of technical trading, there are always many opportunities for profits both short term and long term. A bear market is just another opportunity.
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Motley Fool contributor Daryl Mather owns shares of Fortescue Metals Group Limited. The Motley Fool Australia has recommended Accent Group, Ansell Ltd., and Sonic Healthcare 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.