Broker names 10 top shares to buy for growth potential

A significant proportion of Australia’s economic growth and stability over the past decade or so has to be attributed to our once booming resources and commodities sectors.

Not only were miners, explorers, mining services and infrastructure companies enjoying the good times, but there was also a real trickle down effect to other sectors. Local mining towns were flourishing and miners who went back to the big cities were also happy to spend their hard earned dollars. Even governments were reaping the rewards with higher tax revenue and increased royalties.

But the good times were never going to last forever and Australia’s economy is now at a point where it is transitioning away from resources and into different sectors.

With these points in mind, as reported by the Fairfax press, Morgan Stanley has identified 10 shares it thinks could be key beneficiaries of Australia’s transition into a ‘new economy’. They include:

Aconex Ltd (ASX: ACX) – Aconex is a technology disruptor that provides an online collaboration platform for construction and engineering projects. According to the company, it is the industry’s most widely adopted and trusted platform with more than 60,000 user organisations and over $1 trillion of project value delivered in more than 70 countries.

Aveo Group (ASX: AOG) – Aveo is a leading owner, operator and manager of retirement communities in Australia. The company owns 89 retirement villages with 13,000 residents and is expected to benefit from the ageing population thematic.

Domino’s Pizza Enterprises Ltd. (ASX: DMP) – Domino’s is just as much about technological innovation as it is about making pizzas. The company is rapidly expanding its operations overseas and has already proven itself capable of growing earnings despite slowing economic conditions.

Goodman Group (ASX: GMG) – Goodman is Australia’s largest industrial property group with operations that span across Australia, New Zealand, Asia, Europe, the United Kingdom, North America and Brazil. The company is expected to benefit from increasing economic activity in international markets as companies look to expand their operations into bigger properties.

Lend Lease Group (ASX: LLC) – As one of Australia’s largest property and infrastructure development companies, Morgan Stanley believes the company will benefit from the increased demand for new economic infrastructure as a result of a growing and ageing population.

Mantra Group Ltd (ASX: MTR) – Mantra is one of Australia’s largest hotel operators with 126 properties under the Peppers, Mantra and BreakFree brands. The company is already benefiting from a surge in tourism thanks to a depreciating Australian dollar and the rise of outbound tourists coming out of Asia.

Sonic Healthcare Limited (ASX: SHL) – Sonic is a global provider of medical pathology and radiology services and is a likely beneficiary of the ageing population globally. With a foothold in a number of key global markets, the company should be well placed to further expand its geographical diversity.

Treasury Wine Estates Ltd (ASX: TWE) – The global wine maker is expected to benefit from growing demand for its wine, especially from the changing tastes of Asian consumers. Growth has been especially strong over recent years and recent acquisitions are aimed at further expanding its global footprint.

Virtus Health Ltd (ASX: VRT) – Virtus is the largest provider of in vitro fertilisation (IVF) services in Australia and Ireland. The broker believes the company has the potential to expand into more countries and become a leader in its field.

Vocus Communications Limited (ASX: VOC) – Vocus is expected to benefit from the growing need for infrastructure as the population grows. The NBN rollout is also expected to have a positive benefit for the company as it will allow Vocus to compete in the regional home market, one in which it does not yet compete in.

Foolish takeaway

Investment banks and brokers don’t always get it right, but the 10 stocks mentioned here appear to be good long-term bets. With that said, none of them look particularly cheap right now and for that reason, I would feel more comfortable keeping them on my watchlist for the time being.

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Motley Fool contributor Christopher Georges has no position in any stocks mentioned. Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. 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 Bruce Jackson.

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