With wage growth almost non-existent and inflation well below the Reserve Bank of Australia’s target range, it seems inevitable that the central bank will have to keep rates on hold at the record low of 1.5% for some time to come.
So, if I had $25,000 in a savings account gathering only paltry interest, I would consider putting it to work in the share market instead.
Three ASX 200 shares that I would consider investing these funds into in January are as follows:
A2 Milk Company Ltd (ASX: A2M)
I think that this infant formula and dairy company is one of the best options on the Australian share market for growth investors. Last month the company provided a trading update at its annual general meeting which revealed that during the first four months of FY 2019 it has delivered a 64.5% jump in net profit to NZ$86 million. This strong start to the financial year was driven by insatiable demand for its infant formula products in China and market share gains in the ANZ region for its dairy products. I think this level of growth and its strong long term potential makes its shares good value despite trading at a premium to the market average.
Aristocrat Leisure Limited (ASX: ALL)
Aristocrat Leisure is one of the world’s leading gaming technology companies. Its shares have come under pressure in recent months after its strong full year earnings growth fell a touch short of expectations. In addition to this, the market appeared concerned when management warned that its growth in FY 2019 would be skewed to the second half due to the timing of digital releases. I have confidence that its fledgling digital segment, which has 8.1 million daily active users, will underpin more strong growth this year and beyond. In light of this, with its shares now changing hands at just 18x earnings, I think Aristocrat Leisure is a great growth at a reasonable price (GARP) option for investors.
Qantas Airways Limited (ASX: QAN)
Recent data out of Australia’s Bureau of Infrastructure, Transport and Regional Economics revealed that there have been strong airfare rises across most routes and class types in December. In fact, December 2018 posted the highest ‘cheapest available’ average airfares since all the way back in January 2010. I think the combination of this, lower oil prices, and Qantas’ fuel hedging policy, has put Australia’s flag carrier airline in a great position to deliver another bumper profit this year.
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of A2 Milk. 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.