MENU

How I’d invest $10,000 today

We are well into reporting season and some results are turning up opportunities. This is the chance to get up-to-date financial information from shares and make an investment decision based on the recent price movements.

If I had $10,000 to invest today, I’d do it like this:

Challenger Ltd (ASX: CGF) – $3,500

Australia’s leading annuity provider is suffering short-term pain thanks to an underwhelming FY18 result. However, continued growth is expected in FY19 of at least 8%. New means tests and superannuation requirements could boost demand for annuities in FY20 and beyond.

Challenger is trading at around 13x FY20’s estimated earnings. I think it look likes a good ultra-long-term opportunity at this price.

Rural Funds Group (ASX: RFF) – $2,000

Australia’s largest agricultural real estate investment trust (REIT) is seeing its share price gently fall back to a more realistic level.

The long-term price drivers of increasing global food demand and food scarcity should mean Rural Funds can continue increasing its rental prices for many years to come. Management are confident that the distribution can increase by 4% per annum.

It’s currently trading with a yield of around 5.2% for FY19.

Duxton Water Ltd (ASX: D2O) – $1,500

Duxton Water is the only ASX share to give investors pure exposure to water entitlements. I’m sure it’s been hard to miss that many regional areas are currently in drought. I hope it does rain for their sake.

However, whilst rainfall is scarce the value of water entitlements will likely keep going up. Shareholders can benefit from the lease income Duxton Water receives as well as the long-term increase in value of water entitlement.

At $1.30 it’s trading at a bit of a discount to its net asset value (NAV) of $1.34 at the end of July 2018.

Paragon Care Ltd (ASX: PGC) – $3,000

Paragon is one of my favourite ideas at the moment. It’s a small cap healthcare supplier for items like equipment, devices and beds to clients such as hospitals and aged care facilities.

The company has been on an acquisition spree over the past year. There’s quite a bit of uncertainty baked into the current price. As long as management do a reasonable job of integrating the businesses and extracting synergies then Paragon could be a decent long-term idea with Australia’s ageing population.

As long as it can create decent organic growth then it looks cheap at under 11x FY19’s estimated earnings.

Foolish takeaway

All four of these are trading at good long-term value in my opinion. Rural Funds looks like a good income choice at the moment, whilst Challenger could create excellent returns over the next decade if it can harness the power of the avalanche of retiree money wanting a place of safety.

If I had some more money to invest then I’d definitely consider this top growth share that is starting to expand into Asia ad is predicting profit growth of 30% this year.

OUR #1 dividend pick to grow your wealth now is revealed for FREE here!

You might not know this market leader's name, but it's rapidly expanding into a highly profitable niche market here in Australia. Even better, the shares boast a strong, fully franked dividend that should balloon in the years to come. In other words, we're looking at the holy grail of incredible long-term growth potential AND income you can watch accruing in your account in real time!

Simply click here to grab your FREE copy of this up-to-the-minute research report on our #1 dividend share recommendation now.

Motley Fool contributor Tristan Harrison owns shares of Challenger Limited, DUXTON FPO, Paragon Care Limited, and RURALFUNDS STAPLED. The Motley Fool Australia owns shares of and has recommended Challenger Limited and RURALFUNDS STAPLED. The Motley Fool Australia has recommended Paragon Care 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.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.