3 shares to start 2018 with a bang

The New Year is nearly here, but the share market stops for no-one. As fun as it is to look back on how the market performed in 2017, it’s now time to think about which shares could do well in 2018.

Here are three shares I think are well worth watching:

Oliver’s Real Food Ltd (ASX: OLI)

Oliver’s is a newly-listed food company that’s setting up locations on highways throughout the east coast of Australia. Using the catchy phrase ‘Would you like beans with that’, it aims to serve people real food instead of junk food.

Management revealed an impressive update at the AGM. Revenue increased by 21.2% in FY17, same store sales growth was ahead of the forecast at 6.3%, Oliver’s acquired 100% of Red Dragon Organics and it’s on track to achieve FY18’s prospectus forecast.

Oliver’s could have a great 2018 because of how many new stores it’s going to open and there could be more impressive same store sales growth.

MNF Group Ltd (ASX: MNF)

MNF offers Voice Over Internet Protocol (VOIP) services to Australia retail and wholesale customers, which is a much cheaper form of communication than landline telephone.

Management updated the market at its AGM. It predicted that gross profit will grow by 23%, earnings before interest, tax, depreciation and amortisation (EBITDA) will grow by 19% and earnings per share (EPS) will grow by 18%.

The above forecast could turn out to be fairly conservative because it doesn’t include any new major customers or acquisitions, it’s only based on organic growth.

MNF is currently trading at 32x management’s conservative FY18’s estimated earnings, which seems reasonable for the amount of organic growth it might produce in 2018 and beyond.

MFF Capital Investments Ltd (ASX: MFF)

MFF has been one of the best performing listed investment companies (LICs) over the last few years.

According to Bell Potter’s quarterly LIC report, MFF’s pre-tax NTA had grown by 21.9% per annum over the last five years to the end of September 2017. I think this strong performance is likely to continue because of the high-quality shares in its portfolio.

Some of its top holdings include Visa, Mastercard, Home Depot, Bank of America, Lowe’s, Wells Fargo, JP Morgan Chase, US Bancorp and Alphabet (Google).

Foolish takeaway

I’d be happy to buy all three shares at today’s price, as each one offers exciting growth but are very different from each other. If I had to pick one, I’d choose MFF Capital because it has proven to be a very good capital allocator and it’s a good idea to get more overseas exposure.

I’d also be very pleased to add these solid stocks to my portfolio at today’s prices.

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Motley Fool contributor Tristan Harrison owns shares of Magellan Flagship Fund Ltd. The Motley Fool Australia owns shares of and has recommended MNF Group Limited. 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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