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Inflation: Avoid ASX shares that have these 4 things

Which ASX shares should you be avoiding if you're worried about inflation? Are ASX shares like Redbubble Ltd (ASX: RBL), Cochlear Ltd (ASX: COH) and Amcor Ltd (ASX: AMC) safe?

Which ASX shares should you be avoiding if you’re worried about inflation? Are ASX shares like Redbubble Ltd (ASX: RBL), Cochlear Ltd (ASX: COH) and Amcor Ltd (ASX: AMC) safe?

In this article & video, Owen takes you through his checklist of metrics to keep an eye on.

Owen’s checklist for companies to AVOID

In Owen’s experience, the types of companies that are being hurt by inflation include those that score poorly for these metrics:

They sell discretionary products, like consumer-facing retail products such as fashion. In other words, they’re not mission-critical like software.

They don’t have intangible value wrapped around their service, such as brand equity. For example, Cochlear (ASX: COH) has brand prestige for implantable hearing aids.

The business model is sensitive to supply constraintsRedbubble (ASX: RBL) is one such company. It is facing higher input costs for t-shirts and increased shipping expenses due to fuel costs and driver availability. And it cannot pass on these costs like say, Amcor (ASX: AMC) can.

The financial position is weak. It’s weighed down by lots of debt, poor cash flow, no profits and legacies of empire-building management teams (e.g. Goodwill buried under intangibles and exploding share counts). Vocus Group (ASX: VOC) was an example of this, so was Slater & Gordon (ASX: SGH).

$50,000 per year in passive income from shares? Yes, please!

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Chief Investment Officer Owen Rask has just released his brand new passive income report. Owen has outlined 10 of his favourite ETFs and shares to watch, his rules for passive income investing, why he would buy ETFs before LICs and more.

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Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

At the time of publishing, Owen holds shares of Redbubble (ASX: RBL).
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