If I were lucky enough to be given $10,000 to invest into ASX shares today, this is how I’d do it:
Challenger Ltd (ASX: CGF) – $3,000
Challenger is the leading annuity business, it could benefit from a large demographic of retiring baby boomers that it can sell to over the coming years.
However, despite predicting another year of profit growth in FY19, the share price is down 27% over the past year due to rising interest rates and a retiring CEO.
Over the next 10 years I think that Challenger will be a good steady growth share that can consistently deliver underlying profit growth and dividend growth.
It’s currently trading at only 14x FY19’s estimated earnings with a grossed-up dividend yield of 5.1%.
Costa Group Holdings Ltd (ASX: CGC) – $2,500
Costa is Australia’s largest horticultural business that grows avocadoes, berries, mushrooms, tomatoes and citrus fruit.
Management have predicted that underlying profit can grow by double-digits for the next few years, but the share price is down 30% since prior to reporting its FY18 result.
Costa is investing in improving its efficiencies, acquiring bolt-on acquisitions and expanding plantations. All of these efforts will increase profit.
It’s currently trading at 22x FY19’s estimated earnings with a grossed-up dividend yield of 3.1%.
Paragon Care Ltd (ASX: PGC) – $2,000
Paragon Care distributes health equipment like beds and devices to clients such as hospitals and aged care facilities.
The number of people aged over 65 is projected to increase by 40% over the next 10 years, which should lead to a growing demand for healthcare items. The older we get the more likely we are to need medical assistance.
Paragon has a single purchasing platform for clients to use which should increase efficiencies and profit margins over time. Paragon also continues to make acquisitions to expand the product range it can sell to clients, such as a recent surgery equipment acquisition.
It’s currently trading at 10x FY19’s estimated earnings with a grossed-up dividend yield of 6%.
WAM Global Limited (ASX: WGB) – $2,500
I’d like to get more international exposure for my portfolio, so I’m happy for a quality investment team to do the investing for me.
Wilson Asset Management has proven to be very good at beating the market with ASX shares, hopefully WAM Global proves to be as successful with overseas shares like American Express and Diageo.
It’s currently trading at a small discount to its underlying portfolio value reported at the end of October 2018.
I believe all four of these shares will beat the market over the long-term, that’s why they’re in my portfolio. At the current valuations I believe Challenger looks like the best idea due to the low valuation and supportive tailwinds.
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Motley Fool contributor Tristan Harrison owns shares of Challenger Limited, COSTA GRP FPO, Paragon Care Limited, and WAMGLOBAL FPO. The Motley Fool Australia owns shares of and has recommended Challenger Limited and COSTA GRP FPO. 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.