The Motley Fool

Top ASX Stock Picks for April 2020

We asked our Foolish writers to pick their favourite ASX stocks to buy in April. 

Despite the coronavirus pandemic causing widespread volatility across global markets, we still see opportunities to buy amongst ASX shares. 

So here is what the team have come up with…

Cathryn Goh: Altium Limited (ASX: ALU)

With a long-term investment horizon firmly in view, I believe investors to should stick to quality in highly uncertain times like these.

Characteristics of high-quality shares include a proven track record, a strong balance sheet, exceptional management, and a capacity to endure.

In my opinion, one ASX growth share that fits the bill is Altium. The company is a proven performer that boasts a debt-free balance sheet and a US$80 million cash balance as at 31 December 2019.

Although Altium warned investors about the impact of the coronavirus back in February, I believe the long-term investment thesis for this software company remains well and truly intact.

Motley Fool contributor Cathryn Goh does not own shares of Altium Limited.

Sebastian Bowen: Fortescue Metals Group Limited (ASX: FMG)

Fortescue is one of the biggest iron miners on the ASX.

I’ve chosen this resources giant because iron ore prices have held up remarkably well during this ASX bear market – and the Fortescue share price has done the same.

In my view, that means investors can continue to expect healthy dividend payments from Fortescue in 2020, which should bring a lot of comfort in these uncertain times.

For these reasons, I think Fortescue is a great candidate to help diversify your portfolio this April and get some dividend income to boot!

Motley Fool contributor Sebastian Bowen does not own shares in Fortescue Metals Group Limited.

Ken Hall: Fortescue Metals Group Limited (ASX: FMG) 

Fortescue could be a real ASX 200 bargain with a strong dividend yield.

Fortescue shares have held up well despite the current bear market which has hammered share prices across many industries. 

There are signs that Chinese demand for materials could ramp back up in the coming months as COVID-19 is brought under control by authorities. That could leave Fortescue well-placed to continue operating and maintain its earnings.

With a dividend yield of 9.90% and some share price resilience, Fortescue could be a great ASX dividend share to buy in April.

Motley Fool contributor Ken Hall does not own shares in Fortescue Metals Group Limited. 

Tristan Harrison: Magellan High Conviction Trust (ASX: MHH)

It’s not guaranteed that every business will get through this period, particularly if it turns into a painful recession.

So where are you meant to invest in this type of environment? The best businesses will be the ones to get through this the easiest and be best placed to succeed on the other side.

This listed investment trust (LIT) invests in the best with great brands, great margins and good balance sheets. For example, the likes of Alibaba, Alphabet, Microsoft and Visa.

Not only are those businesses trading more cheaply, but Magellan High Conviction Trust is trading (at time of writing) at a 13% NAV discount.

Motley Fool contributor Tristan Harrison does not own shares of Magellan High Conviction Trust.

Brendon Lau: Aristocrat Leisure Limited (ASX: ALL)

The Aristocrat Leisure share price took a big beating last month as investors are too focused on the closure of casinos and other licensed venues (customers of Aristocrat).

But what they are overlooking is the of the gaming machine maker’s digital business, which develops popular social casino apps. I think this is likely to get a boost during the coronavirus quarantine.

Motley Fool contributor Brendon Lau owns shares in Aristocrat Leisure.

Matthew Donald: Nextdc Ltd (ASX: NXT)

The NEXTDC Ltd share price has stormed 27% higher in the past 12 months and has been resilient in the face of the market downturn due to the devastating COVID-19.

In its COVID-19 Update & Guidance Affirmation released to the market on the March 19, the company noted that there has been no noticeable change to NEXTDC’s sales pipeline.

I believe its data centres assist customers in adapting to the working from home trends. NEXTDC CEO Craig Scroggie said the company expects society changes will accelerate demand for its services.

Motley Fool contributor Matthew Donald doesn’t own shares in NEXTDC Ltd.

Phil Harpur: Wesfarmers Ltd (ASX: WES)

What really appeals to me about Wesfarmers during the high level of market volatility and uncertainty that the ASX is experiencing, is its degree of diversification and its strong balance sheet.

Backed by an excellent management team, Wesfarmers appears well capable of navigating the group through the rocky months ahead.

Wesfarmers has also seen a surge in demand in recent weeks from its Officeworks, Bunnings and Kmart stores, as consumers and businesses stock up on essential items such as office supplies and computer equipment so that they can work from home.

Wesfarmers also pays an attractive fully franked dividend yield of 4.5%.

Motley Fool contributor Phil Harpur doesn’t own shares in Wesfarmers Ltd.

Michael Tonon: Medical Developments International Ltd (ASX: MVP)

 I think April will bring us many great buying opportunities as March did, with volatility here to stay for a while longer yet.

One ASX company I bought into in March was Medical Developments. It had been on my watchlist for a while but with the current market crisis, it became too cheap to ignore. I believe it will still offer investors great value in April.  

Medical Developments announced mid-march that the demand for its pharmaceutical and medical products had not declined.

Additionally, the small-cap healthcare company carries sufficient stock to meet its forecast demand.

Short term demand for its flagship product Penthrox may decline slightly as fewer people are active, reducing trauma, but I believe its long term global growth potential remains strong.

Motley Fool contributor Michael Tonon owns shares of Medical Developments International Ltd. 

Nikhil Gangaram: AMCOR PLC (ASX: AMC)

Amcor is an ASX stock I will be watching for a bounce in April.

The packaging giant has been sold down along with the rest of the market, however, Amcor has some favourable tailwinds that could see it bounce back strongly.

Consumer stockpiling of goods could increase the demand for food packaging, in additional a sinking oil price will reduce the cost of packaging raw materials such as resin.

With the majority of its revenue generated overseas, the low Australian dollar could also help the Amcor share price.

Motley Fool contributor Nikhil Gangaram does not own shares in AMCOR PLC.  

James Mickleboro: Accent Group Ltd (ASX: AX1)

I think Accent could be a good option for investors in April after a material pullback in its share price in March.

While the footwear-focused retailer’s FY 2020 result is likely to be impacted greatly from coronavirus-related store closures, I expect it to bounce back strongly in FY 2021 when trading conditions return to normal.

This could make it well worth considering a patient long-term investment in its shares. Especially given its attractive valuation, strong balance sheet, and its popular retail brands. The latter include Athlete’s Foot, HYPE DC, and Platypus.  

Motley Fool contributor James Mickleboro does not own shares in Accent Group Ltd.

Lloyd Prout: Xero Limited (ASX: XRO)

Xero is a New Zealand founded cloud-based accounting software platform for small and medium sized enterprises (SMEs). The Xero share price was down as much as 34% in a month on March 23.

This fall is partially warranted given that most SME clients will be directly impacted by COVID-19 and any economic downturn to come. Some may, unfortunately, go broke. With that said, accounting and tax compliance is a need, not a want for these businesses.

With a stellar product on a recurring revenue subscription based business model, Xero is well placed to weather a storm and shine on the other side.

Motley Fool contributor Lloyd Prout owns shares in Xero Limited and expresses his own opinion.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Medical Developments International Limited. The Motley Fool Australia owns shares of Altium, Wesfarmers Limited, and Xero. The Motley Fool Australia has recommended Accent Group, Amcor Limited, and Medical Developments International 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.

 

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