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Bell Potter names the best shares to own in FY19

The biggest share brokers often have the best chance of choosing the right shares because they may have done the ‘best’ analysis. It’s much easier choosing the best shares to beat the market when you can do detailed analysis on most shares on the market and then come to a conclusion.

Bell Potter is one of Australia’s leading brokers and each year comes out with a list of shares it thanks are the best in each industry.

Here are those exciting picks with a quick reason:

Banks and general insurances

Macquarie Group Ltd (ASX: MQG) – Its shifting business model and lower-risk annuity-style earnings are attractive with its global profile compared to most of its peers.

CYBG Plc (ASX: CYB) – Clydesdale is on course to merge with Virgin Money in the UK which will create strong synergies and be under a popular brand name.

Westpac Banking Group (ASX: WBC) – The oldest bank has a reputation for conservative management and perhaps the lower risk profile will translate to continued slow-and-steady growth.

Diversified financials

Pendal Group Limited (ASX: PDL) – The fund manager is a pick for its focus on future growth with selective expansion of its investment capabilities and seeding new offerings.

Challenger Ltd (ASX: CGF) – Government changes to superannuation are predicted to create demand worth over $10 billion for annuity products, which is a big opportunity for Challenger.

Janus Henderson Group (ASX: JHG) – Additional cost synergies and cross-selling opportunities could mean double digit profit growth for Janus Henderson in the coming year.

Technology

Citadel Group Ltd (ASX: CGL) – As the market recognises Citadel as a pure software business Bell Potter believes the market will re-rate it to be on a forward p/e ratio of more than 30.

Integrated Research Limited (ASX: IRI) – A global presence, leading market position, high-quality customers, large recurring revenue, long history, barriers to entry, strong balance sheet and good management are all reasons to like this software business over the medium-term.

Technology One Limited (ASX: TNE) – This is one of the highest-quality tech shares on the ASX according to Bell Potter. Short-term pessimism is expected to disappear when the business returns to strong growth in FY19.

Foolish takeaway

I’d agree with pretty much every one of these picks, although Westpac would be my least favourite out of them all.

At the current prices I think Challenger and Citadel are my favourite two businesses as they are generating good growth and can do well even if the economy takes a hit. However, the price target of $17.49 for Challenger may be a bit optimistic.

Another share I’d add to the mix is this exciting business which is just starting to expand into Asia and is predicting profit growth of 30% in FY18 alone.

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Motley Fool contributor Tristan Harrison owns shares of Challenger Limited. The Motley Fool Australia owns shares of and has recommended Challenger Limited. The Motley Fool Australia owns shares of Citadel Group Ltd. The Motley Fool Australia has recommended Integrated Research 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 Scott Phillips.

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