Leading ASX fund managers name their top stock picks

Some of Australia's leading fund managers have named some top stock picks.

a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Today is the Future Generation Investment Forum, where leading ASX fund managers name their top stock picks.

Future Generation refers to Future Generation Investment Company Ltd (ASX: FGX) and Future Generation Global Investment Co Ltd (ASX: FGG). These are two listed investment companies (LICs) that invest in fund managers who work for free, they don't charge management fees or investment fees.

Instead, 1% of the NTA is donated to youth related charities. It's a very good structure and cause.

The Forum brings together some of the fund managers for some investment tips, here are some of them:

Blake Henricks from Firetrail Investments chose Worleyparsons Limited (ASX: WOR), the Australian engineering business. He thinks it's a good choice due to where we are in the resource cycle and it's winning more business. Also, resource businesses will have to spend on capital expenditure just to maintain production. It has improved areas of its business like the balance sheet and costs in recent times. Mr Henricks has currently trading with a price/earnings ratio of around 12x.

Nick Griffin from Munro Partners chose Treasury Wine Estates Ltd (ASX: TWE), the owner of a portfolio of wine brands. China is powering its growth along and a rapidly growing middle class is increasing demand for quality Australian wine. Mr Griffin said it's trading at 20x forward earnings and could grow earnings at 20% per annum for the next three years.

Geoff Wilson from Wilson Asset Management chose Blue Sky Alternatives Access Fund Ltd (ASX: BAF) and Myer Holdings Ltd (ASX: MYR). For Myer, Mr Wilson thinks the new management of John King will turn things around. For the Blue Sky LIC, he thinks the share price could return to the NTA if WAM are given the management of it.

Oscar Oberg from Wilson Asset Management chose Baby Bunting Group Ltd (ASX: BBN), the baby product retailer. He and the WAM team think Baby Bunting can win more of the $2.4 billion baby market. Quite a few competitors have closed in recent times, around 70 stores have left the market, including Babies R Us. He thinks it's a defensive idea and can reach 80 stores faster than expected. Baby Bunting could grow private label sales, to up to 50% of sales, whilst also growing EBITDA margins from 6% to 10%. He thinks Baby bunting could grow earnings by 30%.

Foolish takeaway

Lots of interesting picks here and all of them are good candidates to beat the ASX over the next 12 months. If I could only choose two choices it would be Treasury Wines and the Blue Sky LIC. They seem like well-priced, defensive options that could grow earnings at good rates over the next few years.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Treasury Wine Estates 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.

More on Share Market News

woman holding her baby and looking at her phone happy at the rising share price
Broker Notes

3 ASX All Ords shares that brokers tip will grow 30% to 40% this year

The experts say these three ASX All Ords stocks have great growth ahead of them.

Read more »

A man stands with his arms crossed in an X shape.
Mergers & Acquisitions

Boral share price falls after rejecting Seven Group takeover

The offer 'undervalues' Boral according to its committee.

Read more »

A businessman hugs his computer and smiles.
Opinions

3 Australian shares to buy and hold forever in your ASX portfolio

I think these three ASX shares can outlive us all.

Read more »

Smiling man with phone in wheelchair watching stocks and trends on computer
Share Market News

5 things to watch on the ASX 200 on Tuesday

A positive session is expected for the ASX 200 on Tuesday.

Read more »

A person sitting at a desk smiling and looking at a computer.
Investing Strategies

The best ASX shares to invest $500 in right now

Creating wealth isn't just for the privileged. Just a few hundred dollars can get you started in stock investing.

Read more »

Smiling couple looking at a phone at a bargain opportunity.
Cheap Shares

2 'materially undervalued' ASX 200 shares to buy while they're at 'attractive value'

Is there a better feeling in investing than grabbing stocks for cheap then watching while everyone else catches on to…

Read more »

Shot of a young scientist using a digital tablet while working in a lab.
Healthcare Shares

1 ASX stock to consider buying that could be the next ResMed

There are obviously no guarantees in the share market. But if you're willing to take on some risk, the rewards…

Read more »

A woman sits in a cafe wearing a polka dotted shirt and holding a latte in one hand while reading something on a laptop that is sitting on the table in front of her
Share Gainers

Here are the top 10 ASX 200 shares today

It was a shaky, but positive start to the trading week for ASX shares today.

Read more »