Looking to stabilise your portfolio? Three ASX shares that could help

Summary

  • The kinds of stocks that make up a stable portfolio are generally the ones that are not of a speculative nature.
  • CSL Limited is one of the leaders in biotechnology space, operating the CSL Behring and Seqirus businesses.
  • Inghams is being relished by investors because of its profit margin growth driven by the improvement in its efficiency.

When it comes to investing, the stability of returns is equally important, if not more, than the magnitude of the returns. A stable portfolio reveals its magic during turbulent times by resisting the fall by a good margin when there’s blood in the streets.

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The kinds of stocks that make up a stable portfolio are generally the ones that are not of a speculative nature and have well established business models to counter tough times. Let’s have a look at three such stocks.

Read More: How much should you invest to make AU$3,000 a month?

  1. CSL Limited (ASX:CSL)

The first ASX 200 company on our list is CSL. The company is one of the leaders in biotechnology space and operates the CSL Behring and Seqirus businesses. CSL Behring has a strong foothold in plasma therapies, whereas Seqirus is the number two player in developing flu vaccines.

The company has mostly been an outperformer during FY21 despite facing a number of challenges posed by the COVID-19 pandemic. The management is forecasting a profit of US$2,170 million to US$2,265 million in constant currency for FY21. This represents a growth of 3% to 8% on a year-on-year basis.

The near-term performance of the company is likely to be affected by a slowdown in plasma collections, however, these challenges are now easing. Looking ahead, the company appears to be well-positioned for growth, owing to a growing demand for its flu vaccines, core therapies, and occupied R&D pipeline. The CSL share price is trading at AU$269.98.

Read More: CSL (ASX:CSL) registers US$1.8 billion net profit in half year result for 2021

  1. Pinnacle Investment Management Group Limited (ASX:PNI)

Pinnacle is in the business of taking investment stakes in some of the leading investment managers in Australia and helping them grow.

In the latest update by the company, total affiliate funds under management (FUM), as of 30 April 2021, stood at AU$84.9 billion, up 20.4% over 31 December 2020 figure of AU$70.5 billion. The total net inflows for the four months to 30 April 2021 stood at AU$9.9 billion comprising AU$1.8 billion of retail funds and AU$8.1 billion of institutional funds.

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The company’s FUM growth and outperformance from its affiliates have been generating decent profits for the group. In the six months to 31 December 2020, Pinnacle’s net profit after tax (NPAT) shot up by a massive 120% to AU$30.3 million, and its earnings per share (EPS) more than doubled to 17.5 cents. The EPS growth funded a 70% increase in the dividend to 11.7 cents per share. Currently, the PNI share price is trading at AU$10.36.

  1. Inghams Group Limited (ASX:ING)

Inghams is an Australia-based poultry business that processes a gigantic amount of poultry every year.  Investors primarily like the profit margin growth of the company that it’s achieving, owing to its efficiency improvement. Inghams recently released an upgraded guidance for FY21 after taking into consideration, the current business performance, its efficiencies implemented throughout FY21 and how the rest of the financial year might turn out.

There has been a noticeable improvement in general trading conditions of the company as the impact of the pandemic-induced restrictions had been toned down over the last six months in Australia. The management is expecting Underlying EBITDA to be in the range of AU$203 million to AU$213 million, while the underlying net profit after tax guidance has been pegged in the range of AU$96 million to AU$103 million. The ING share price is trading at AU$3.72.

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