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Top broker reveals 5 high-conviction ASX shares to buy in March

Andrew Tang from stockbroker Morgans has revealed 5 high-conviction ASX shares to buy in March 2019.

Based on reporting season and the latest share price movements, these are the five high-conviction ASX shares Mr Tang shared with Livewire:

Sonic Healthcare Limited (ASX: SHL)

The global medical diagnostics company is a favourite because of its defensive earnings, growing scale and a strong balance sheet. Morgans is forecasting high single digit earnings growth to 2021. The recent Aurora Diagnostics acquisition adds scale but also potentially offers cross-selling opportunities and profit margin growth.

Sonic Healthcare is trading at around 18.5x forward earnings according to Mr Tang, with a decent dividend yield of 3.7%.

Oil Search Limited (ASX: OSH)

A large oil and gas company is the favoured choice in the resources space due to the strength of its earnings and quality growth profile.

Morgans thinks that despite challenging conditions, Oil Search is doing well at developing global-scale organic growth. It has high profit margins from its expansion of the PNG-based LNG operations and also the development in Alaska.

ResMed Inc (ASX: RMD)

The respiratory disorder treatment healthcare business has good tailwinds, a solid pipeline of new products and an expanding digital platform.

The recently-reported second quarter was a sixth consecutive quarter of improving leverage and another quarter of double-digit growth. Mr Tang pointed to the fact that ResMed is targeting a very large potential addressable market with around 12 million Americans estimated to be suffering from sleep apnoea.

Reliance Worldwide Corporation Ltd (ASX: RWC)

The global leading manufacturer of push to connect (PTC) plumbing fittings and specialist water control valves is another top pick, partly because it’s hard to dislodge a business when it’s so far ahead of the competition with a market share of around 80% in the US.

Reliance’s stable and fairly defensive earnings are attractive, with plenty of growth potential because push to connect fittings in the US only make up around 12% of the market, according to Mr Tang.

Westpac Banking Corp (ASX: WBC)

Westpac is the pick of the big four ASX banks for Morgans.

Mr Tang said that Westpac has a relatively low risk profile in terms of loan book positioning and low reliance on treasury and markets income, and the bank stands to benefit the most from the re-pricing of investor property loans.

Westpac is currently already above the minimum 10.5% CET1 ratio set by the regulator APRA, which puts it in a good position.

Foolish takeaway

These are all interesting picks and I can see why Morgans chose them. At the current prices I would personally be attracted to Reliance the most due to its global earnings and dominant market position.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has recommended ResMed Inc. 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.