Since we're well into July, the next earnings season for ASX stocks is just around the corner.
Most ASX stocks are required to report their financials to investors every six months. This typically occurs in February and March, and then again in August and September.
Earnings season is a great time for ASX investors. We get to see what our companies have been doing and see if the lofty promises that management teams make are living up to reality.
Buying and selling ASX stocks during earnings season is always a little tricky. Share prices tend to fluctuate wildly around the time a company's earnings are publicly released.
As such, I typically do most of my buying and selling outside this busy time. So today, let's talk about two ASX stocks I've been buying recently in the lead-up to this year's second earnings period.
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Two ASX stocks I've been buying
MFF Capital Investments Ltd (ASX: MFF)
First up, we have the listed investment company (LIC), MFF Capital Investments. Like most LICs, MFF owns and manages a portfolio of underlying shares on behalf of its shareholders. In this case, these are not ASX stocks, but US shares.
MFF follows a Warren Buffett playbook of buying high-quality businesses at reasonable prices, and then holding them for long periods of time. Many of its largest holdings, which include the likes of Amazon, Mastercard, Visa, Alphabet, and Bank of America, have been in its portfolio for years.
Whilst the prices of these US stocks don't exactly look cheap right now (with the exception of Alphabet), MFF does. Yesterday, the company informed us that the net tangible assets per share stood at $4.982 on a pre-tax basis. That's as of 11 July. Despite this, MFF currently trades at a significant discount to that of $4.43 a share.
As such, I'd be more than happy to add to this position today, in addition to the recent investments I've already made.
Vanguard Australian Small Companies Index ETF (ASX: VSO)
This next investment isn't really an ASX stock, but represents dozens of underlying shares. The Vanguard Australian Small Companies Index ETF is an exchange-traded fund (ETF) that focuses on the ASX stocks outside of the largest 100.
Rather than Commonwealth Bank of Australia (ASX: CBA), Telstra Group Ltd (ASX: TLS), or BHP Group Ltd (ASX: BHP), VSO's top holdings include names like TechnologyOne Ltd (ASX: TNE), JB Hi-Fi Ltd (ASX: JBH), and Lynas Rare Earths Ltd (ASX: LYC).
I like the diversification this brings to my portfolio, complementing my investment in the large-cap-focused Vanguard Australian Shares Index ETF (ASX: VAS).
In the lead-up to earnings season, we've seen ASX stocks like CBA, Telstra, and Wesfarmers Ltd (ASX: WES) increase in value substantially. But VSO has been far more muted.
As such, I think it's a great time to buy some more of this quality ETF.
