We asked our Foolish writers to name some of their favourite shares for new money now. Here’s what they came up with.
Tom Richardson: Blackmores Limited (ASX: BKL)
Shares in vitamins, baby formula and nutritional supplements retailer Blackmores are up 170% over the last year thanks to a 159% lift in earnings per share to $2.80 for the most recent half year.
One common mistake is for investors to think they’ve missed the boat after big share price rises, although, at $160 shares look good value for growth-oriented investors being on 28x annualised earnings per share, with a 2% dividend yield. I expect demand from Asia will fuel more strong earnings and share price growth over the next 3-5 years, even if China does levy higher taxes on Blackmores’ products.
Motley Fool contributor Tom Richardson owns shares in Blackmores.
Rachit Dudhwala: Macquarie Group Ltd (ASX: MQG)
Macquarie Group has gone from strength-to-strength following a transition of its business mix to a greater emphasis on annuity-style revenues (as opposed to predominately capital market facing businesses). The group now earns approximately 74% of its earnings from annuity-style businesses, most of which comes from offshore operations, reducing the investment bank’s exposure to the Australian market and setting it apart from the big four banks. Macquarie is slated to announce 2016 full-year results later this week with expectations of an increase to 2015 full-year profits, making it a top stock to watch.
Motley Fool contributor Rachit Dudhwala does not own shares in Macquarie Group.
Matt Bugden: Sirtex Medical Limited (ASX: SRX)
The opportunity created by a pullback in Sirtex shares still exists as shares are down around 25% year to date following disappointment with the company’s half year results.
More broadly, Sirtex boasts an impressive growth story which remains on track. Sirtex’s targeted radiation treatment for liver cancer has increasing support in the medical community and a huge potential market globally. Sirtex has no debt, high returns on capital, and fast growing earnings. Priced near $30, Sirtex shares represent an attractive mix of growth and value. Broker consensus is a 12-month price target of around $40.
Motley Fool contributor Matt Bugden has no financial interest in Sirtex Medical.
Christopher Georges: Surfstitch Group Ltd (ASX: SRF)
Investors who are comfortable with a higher level of risk-reward potential should consider Surfstitch at the current share price. It has been more than six weeks since the company provided any updated news regarding the possible takeover by its former CEO and this information vacuum has seen the shares fall back to pre-announcement levels. Despite this, I think patient investors could be well rewarded even if an offer does not eventuate as the longer term growth potential for Surfstitch remains quite attractive.
Motley Fool contributor Christopher Georges owns shares in Surfstitch Group.
Regan Pearson: Global Health Limited (ASX: GLH)
Microcap software company Global Health has attractive growth prospects, a growing market and a bargain share price. The company’s products make healthcare records more accessible by connecting healthcare clinicians to consumers. The company currently sells for just 12x trailing (2015) earnings, but comes with a solid EBITDA margin of 27%, minimal debt and strong long-term growth prospects.
Recent contract wins and a ‘significant’ sales pipeline have CEO Matthew Cherian aiming for up to a five-fold increase in revenue growth to between $20 million to $25 million by 2020. This will be delivered through organic revenue growth and acquisitions.
Motley Fool contributor Regan Pearson owns shares in Global Health Limited
Ryan Newman: Blackmores Limited (ASX: BKL)
The market’s darling of 2015 has been its battering ram so far in 2016, but now could be a great time to revisit vitamins and infant formula producer Blackmores.
Although the shares aren’t necessarily cheap, investors are being given the opportunity to buy at something of a discount based on the market’s concerns regarding regulatory changes in China. However, Blackmores appears to be well-positioned to cope, and could continue to grow sales and earnings strongly for years to come.
It’s not without risk, and shares could remain volatile in the near-term, but they could still pay off for long-term investors.
Motley Fool employee Ryan Newman does not own shares in Blackmores Limited.
James Mickleboro: Australian Pharmaceutical Industries Ltd (ASX: API)
Australian Pharmaceutical Industries is the owner of the Priceline, Soul Pattinson and Pharmacist Advice brands. Late last month it reported its interim results and delivered a solid 18% increase in underlying net profit after tax of $25.3 million. I believe the company will be able to keep its bottom line growing at this rate for a number of years thanks to its aggressive expansion plans. The shares have climbed close to 4% since the results, but I believe there is still room for them to go higher in the years ahead.
Motley Fool contributor James Mickleboro has no financial interest in Australian Pharmaceutical Industries.
Edward Vesely: REA Group Limited (ASX: REA)
REA Group, the owner of www.realestate.com.au, reported recent half year results showing that revenue was up 20%. While net profit and earnings per share were both up 28%. The good times keep rolling, but there’s more to come. With the recent strategic acquisitions of iProperty Group and Flatmates.com.au, REA Group’s earnings momentum and expanded market opportunity are acting as tailwinds for this business. Now is a good time as any to initiate a position as it has a debt-free balance sheet and share price which has gone nowhere since early 2014.
Motley Fool contributor Ed Vesely does not own shares in REA Group.
Ry Padarath: Carsales.com Ltd (ASX: CAR)
Carsales has one of the most enviable business positions on the ASX. It has a dominant number one position in car sales in Australia, and continually reinvests a portion of profits to improve the user and car dealer experience.
It has the brand power to expand into adjacent domestic markets including Tyresales.com.au and car finance, entrenching its network effect. Management has also begun to export its strengths and “online car selling playbook” internationally, with operations in South Korea, Mexico, Brazil, and most recently, Chile. A fantastic growth stock.
Motley Fool contributor Ry Padarath owns shares in Carsales.Com Ltd.
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Motley Fool contributor Motley Fool Staff has no position in any stocks mentioned. 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.