Unless there is a miraculous Santa Claus rally over the next few days, the ASX 200 looks likely to finish 2018 with a sizeable decline.
While this is certainly disappointing for local investors, I'm optimistic that the market will rebound strongly in 2019.
Three potential market beaters to buy for next year are listed below. Here's why I like them:
Appen Ltd (ASX: APX)
The Appen share price has fallen heavily over the last few months due to the market volatility, leaving it trading at approximately 25x estimated FY 2019 earnings. I think this makes it the best value share in the WAAAX group and puts it in a position to be a market beater next year if its strong performance continues. In respect to the latter, with demand for its services expected to get stronger in the coming years due to the explosive growth of machine learning and AI markets, I feel confident its strong earnings growth will continue for the foreseeable future.
Australia and New Zealand Banking Group (ASX: ANZ)
While the banks have been hugely disappointing performers this year, I suspect that 2019 will be far better for them. Especially when the Royal Commission final report is announced in February. At that point I expect investors will start to return to the banks if the report contains no surprises. After all, the shares of ANZ Bank and its peers are currently changing hands on some of the lowest multiples in many years and offer very generous yields in a low interest rate environment.
Cochlear Limited (ASX: COH)
Another top share to consider in 2019 is this hearing solutions company. With its shares down 23% from their 52-week high, I feel now could be an opportune time to pick up shares. Especially given its strong long term growth potential due to the ageing population tailwind and its growing global distribution network. In FY 2019 Cochlear expects to deliver a reported net profit of $265 million to $275 million, which will be a year on year increase of between 8% and 12%.
