With a new financial year in its dawn, it’s as good a time as ever to examine our holdings and portfolio and make some adjustments if necessary. Bear in mind it can be just as hard picking tomorrow’s winners as letting go of companies that have performed but may have run their course.
Here are five ASX stocks that might be winners in the new financial year.
Xero Limited (ASX: XRO)
Xero is the best software-as-a-service company on the ASX, in my opinion. With its cloud-based accounting software, Xero has taken the business world by storm and boasts fantastic growth rates as well as a sticky product (once consumers start using Xero, they usually don’t stop). For the year ending 31 March, Xero announced subscriber growth of 31%, which bodes very well for the future of this company and makes it one of my top bets for FY20.
Afterpay Touch Group Ltd (ASX: APT)
Afterpay is everyone’s favourite ASX tech stock and for good reason – the company has boasted phenomenal growth numbers from its United States (US) expansion and is currently planning a 2019 launch into the United Kingdom. But the reason I really love Afterpay is its brand. Afterpay has become a verb for millennials who have fallen in love with its ‘buy now, pay later’ model. I think this fact will give Afterpay a significant advantage over the companies looking to move in on its turf. Although Afterpay shares are notoriously frothy, this means that there might be a good buying opportunity sometime this financial year.
Macquarie Group Ltd (ASX: MQG)
Macquarie is an ASX bank that offers a bit of everything – retail banking, investment banking, asset management and infrastructure investing. I think Macquarie is the best stock to get exposure to Australia’s financial sector and provides a solid dividend of 4.55% as well – making it one of the best ‘growth-and-income’ stocks you can buy (in my opinion).
MFF Capital Ltd (ASX: MFF)
MFF is a listed investment company (LIC), which basically means it is a company that invests in other companies. MFF is one of the best LICs on the ASX in my opinion, due to its stellar management team and focus on international companies and long-term value investing. Some of its top holdings include US payment giants Mastercard and Visa as well as Alphabet (Google) and Bank of America. I believe MFF is a great way to get some exposure to some of the best companies in the world on the ASX in one share.
Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
‘Soul Patts’ is dividend royalty on the ASX, having increased its dividend every year since 2000. This company has a solid track record of investing in other quality businesses like TPG Telecom Ltd (ASX: TPM) and Brickworks Ltd (ASX: BKW) and is a great place to park your money for decades (in my opinion). Soul Patts currently pays a 2.53% dividend yield and has come down in price over the last few months, providing a possible buying opportunity if one was so inclined.
In my opinion, any of these companies would make a great addition to your portfolio this financial year. All have demonstrated a great track record of success and all show signs of continuing said success for many years to come.
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Motley Fool contributor Sebastian Bowen owns shares of Magellan Flagship Fund Ltd. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of AFTERPAY T FPO and Xero. The Motley Fool Australia has recommended Brickworks. 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.