Recently, analysts from Bell Potter shared 10 of their favourite stocks for private investors. The companies they identified come from various sectors and all have a market capitalisation of higher than $1.0 billion.
I have selected 5 companies from this list that show great promise for the next 12 months.
Aristocrat Leisure Limited (ASX: ALL)
Aristocrat Leisure is a gaming technology company that develops, manufactures and sells content, platforms and systems. The company has a strong recurring revenue stream, with 27.5% of group revenue coming from placing and leasing gaming machines in customer venues.
Analysts like Aristocrat for the company’s strong position in the US gaming industry, which should support growth in the medium term. In addition, digital gaming also shows great potential for Aristocrat, with the segment forecast to grow at around 13% per annum for the next 3 years.
Brambles Limited (ASX: BXB)
Brambles Limited is a global logistics and solutions company that specialises in providing reusable pallets, crates, containers and other logistic services. The company’s flagship CHEP brand operates in over 60 countries through a supply chain model known as ‘pooling’. Recently Brambles posted a strong trading update, which saw sales revenue lift 5% for the 3 months through September.
With Brambles primarily servicing defensive growth sectors such as dry foods, health and personal care, analysts forecast that its expansion into emerging markets should generate additional earning revenue.
Goodman Group (ASX: GMG)
Goodman Group is the largest industrial property business listed on the ASX. The company’s operations involve developing and managing properties throughout Australia, New Zealand, Asia, Europe, Brazil and North America. Goodman’s FY19 report revealed operating profit to be 11.4% higher than the year prior, with total assets under management growing 21% for the year.
Analysts have a favourable long-term outlook for Goodman’s, with industrial properties expected to benefit from the growing e-commerce sector and the expanding middle class in developing countries.
Netwealth Group Ltd (ASX: NWL)
Netwealth Group is a specialist investment platform, used by financial intermediaries to provide investment management solutions. The company’s platform provides financial advice on superannuation and other investments. Following the Royal Commission into banking and financial services, Netwealth has been taking market share from institutional platforms such as the big banks and other large finance companies.
Looking forward, analysts forecast that the wealth management sector will move from large, vertically integrated companies like the big banks to more independent players. This change in the sector should further boost the growth outlook for companies like Netwealth.
Worleyparsons Limited (ASX: WOR)
Worleyparsons Limited is a professional services company that provides expertise for engineering, project management and maintenance of oil and gas, mining and chemicals sectors.
Analysts are optimistic in the medium-term earnings of Worleyparsons, with the company set to benefit from improving activity levels in each sector. In addition, the company’s acquisition of Jacobs Energy earlier this year is forecasted to generate synergies worth $130 to $160 million over the next 2 years.
Should you buy?
In my opinion, the companies listed by Bell Potter show great promise, however I would not jump the gun and start buying shares. I think the best strategy would be to keep a watch on the companies and sectors mentioned and let price action determine whether you should invest.
The remaining 5 companies recommended by Bell Potter analysts were Macquarie Group Limited (ASX: MQG), Mirvac group Limited (ASX: MGR), Lendlease Group (ASX: LLC), Amcor (ASX: AMC) and Downer EDI Ltd (ASX: DOW).
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Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Netwealth. The Motley Fool Australia has no position in any of the stocks mentioned. 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.