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Here are 6 ASX shares the fund managers think you should buy

This morning there was an interesting piece in the Australian Financial Review which asked six of Australia’s leading fund managers to name a share that they felt was a standout pick for the next 12 months.

With a diverse panel doing the picking, there was always going to be an equally diverse range of shares suggested. Here they are:

ALS Ltd (ASX: ALQ)

This leading testing and analytical service provider was picked out by DNR Capital. Personally I have mixed feelings over ALS. Whilst I’m a huge fan of the company’s life sciences segment, I’ve been disappointed by its other segments which have been underperforming recently. But if it can get all its segments firing on all cylinders at the same time then I would buy up its shares in a heartbeat.

Healthscope Ltd (ASX: HSO)

Leading private hospital operator Healthscope was picked out by Hyperion Asset Management thanks to its large pipeline of brownfield hospital expansions. It expects this will drive earnings growth at a strong rate for the next few years. I would have to agree with this one. At just 27x full year earnings it’s one of the more affordable options in the industry.

Insurance Australia Group Ltd (ASX: IAG)

This insurer was picked out by Investors Mutual largely due to being seen as good value and providing a strong dividend in an expensive market. Although personally I have a preference for its rival Suncorp Group Ltd (ASX: SUN), which is cheaper and provides a stronger yield, I’ll admit that there’s not much between the two.

Idp Education Ltd (ASX: IEL)

Picked out by WaveStone Capital, this provider of international student placement services recently reported a 32% increase in full year net profit after tax of $39.9 million. Whilst the company is supported by the ongoing global growth in the international education industry, I feel its shares come at a premium and would be best avoided.

Rio Tinto Limited (ASX: RIO)

The iron ore giant was chosen by Lazard Asset Management as one of its long-term picks. I feel quite sure this will prove to be a great investment if the iron ore price remains steady or climbs higher from here. But unfortunately that is a reasonably big if. For that reason I personally would avoid Rio Tinto and its peers.

Transurban Group (ASX: TCL)

This leading toll road operator was chosen by State Street Global Advisors. In my opinion Transurban is one of the best companies on the Australian market. But because of that it does come at a premium. At around 100x full year earnings I would be hesitant to start an investment right now unfortunately.

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Motley Fool contributor James Mickleboro 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.

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