If I could buy only one ASX share right now, it would be…

We asked our Foolish writers to play favourites with ASX shares…

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We all know that if you want to achieve a winning share portfolio, stacking it with just one single stock is NOT the clever way to go. Talk about the ultimate lack of diversification!

But, theoretically, if, for some wild reason, you were only able to buy a single ASX share, what would it be?

We thought it might be insightful to ask our Foolish writers which ASX stock they would buy and hold if it were the only company they could invest in.

Here is what they selected:

5 ASX shares that stand out from the crowd (smallest to largest)

  • Propel Funeral Partners Ltd (ASX: PFP), $579.67 million
  • MFF Capital Investments Ltd (ASX: MFF), $1.71 billion
  • Lovisa Holdings Ltd (ASX: LOV), $2.01 billion
  • Evolution Mining Ltd (ASX: EVN), $6.76 billion
  • ResMed Inc (ASX: RMD), $13.27 billion

(Market capitalisations as at 24 November 2023).

Why our Foolish writers would choose these stocks over all others

Propel Funeral Partners Ltd

What it does: Propel Funeral Partners is Australia's second-largest provider of death care services by funeral volume. The company has built its large presence in Australia and New Zealand through extensive acquisitions since its 2021 founding.

By Mitchell Lawler: The funeral industry is undergoing a corporatisation process as small, family-run funeral home owners fail to rear successors. 

Private equity firms are more than happy to take up the reins in their place due to the attractive qualities of selling funeral services – an aging demographic, predictable demand, and a fragmented market. 

Propel is currently perched highest on my buy list for two core reasons: 

  1. Valuation: A 26 times earnings multiple seems 'cheap', in my opinion, for the growth potential and possible longevity of future cash flows.
  2. Management: Propel is led by a team of people highly experienced in structuring transaction deals. This is important, as deal terms can define whether transactions create shareholder value or destroy it.

The company grew its revenue by 16% in FY23 to $168.5 million. Despite this, Propel's market share remains below 10%.

Motley Fool contributor Mitchell Lawler owns shares of Propel Funeral Partners Ltd.

MFF Capital Investments Ltd

What it does: MFF Capital is a listed investment company (LIC) that owns and manages a portfolio of shares on behalf of shareholders. In this case, MFF specialises in quality US shares at sensible prices. 

By Sebastian Bowen: If I was forced to only be able to buy one ASX share, I would go for an investment that offers inherent diversification. As a LIC, MFF fits the bill nicely. The company's underlying portfolio is made up of approximately 30 US companies, according to the latest data. Some of those top holdings include Google-owner Alphabet, Visa, Mastercard, and Amazon.

MFF Capital was founded and is run by Magellan founder Chris Mackay. Mackay has significant skin in the game, owning millions in MFF shares. So, all in all, this is a company that I'd be very happy to buy ahead of most other shares on the ASX today.

Motley Fool contributor Sebastian Bowen owns shares of MFF Capital, Amazon, Mastercard, Visa and Alphabet.

Lovisa Holdings Ltd

What it does: Lovisa is an affordable jewellery retailer that predominantly targets the youth market. It operates in Australia and across 39 other countries. It's also worth noting two of our writers singled out this share.

By Tony Yoo: Despite economic uncertainty hanging over the consumer discretionary sector, Lovisa is expanding its store network rapidly. Just this week, it reported opening a net 35 stores so far this financial year and in the coming month it will enter Vietnam and mainland China for the first time.

Lovisa seems to be a rare combination of growth and dividend stocks, growing its share price by more than 135% over the past five years while it currently boasts a 70% franked dividend yield of 3.75%.

And right now the shares are in a dip, perhaps presenting a tempting buying opportunity. The stock price is down 31.7% since 24 April and has dropped 6.6% since 15 November.

Motley Fool contributor Tony Yoo owns shares of Lovisa Holdings Inc.

By Tristan Harrison: The Lovisa share price has declined by more than 30% since April 2023. I think it's much better value now, which is why I invested recently.

In its recent AGM update for the first 20 weeks of FY24, Lovisa advised that total sales had increased 17% year over year. This shows the benefits of its store rollout strategy despite comparable store sales being down 6.2%.

The jewellery retailer has only recently entered a number of markets with much larger populations than Australia, including Spain, Canada, Mexico, and Poland. Signalling significant growth potential, Lovisa also announced it was about to enter China and Vietnam.

Lovisa is valued at 19 times FY25's estimated earnings, according to the projection on Commsec.  

Motley Fool contributor Tristan Harrison owns shares of Lovisa Holdings Inc.

Evolution Mining Ltd

What it does: One of Australia's largest listed gold miners, Evolution explores for and produces gold and copper across a range of quality mineral assets in Australia and Canada.

By Bernd Struben: First, I'm bullish on the outlook for the gold price. At US$1,990 per ounce (AU$3,056), gold has gained 9% since the Hamas attack on Israel. With interest rates close to topping out and global conflict sadly unlikely to abate, I see the yellow metal moving higher from here.

I think Evolution is a great stock to own in this scenario. A number of the company's mines are returning to normal operations this quarter following scheduled maintenance. And the miner recently reaffirmed its full-year FY24 guidance of 770,000 ounces of gold production at an all-in-sustaining cost (AISC) of AU$1,370. That's a very healthy margin, even at current gold prices.

The Evolution share price is up 48% in a year. Shares trade on a 1.1% fully franked dividend yield.

Motley Fool contributor Bernd Struben does not own shares of Evolution Mining Ltd.

ResMed Inc

What it does: ResMed is a medical device company with a focus on sleep disorders. It primarily offers cloud-connectable devices for the treatment of sleep apnoea, chronic obstructive pulmonary disease, and other respiratory conditions.

By James Mickleboro: When I make investments, I take a long-term approach. I'm not interested in short-term trades. So, when a high-quality company with a positive long-term outlook goes on sale, I get very excited. And that's why ResMed would be my pick if I could only buy one ASX share today. 

Its shares are down materially this year amid concerns over the rise of weight loss wonder drugs like Ozempic. Do I think these drugs will steal ResMed customers? I do. Am I concerned? No, I am not.

That's because there are an estimated 1 billion sufferers of sleep apnoea globally. This provides ResMed with a huge growth runway over the next couple of decades. Furthermore, it is worth remembering that Ozempic is not for everyone. It is expensive and reportedly has some bad side effects. 

All in all, I believe ResMed's future remains very bright, and now is a great time to buy its shares for the long term.

Motley Fool contributor James Mickleboro owns shares of ResMed Inc.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Amazon, Lovisa, Mastercard, ResMed, and Visa. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended the following options: long January 2025 $370 calls on Mastercard and short January 2025 $380 calls on Mastercard. The Motley Fool Australia has positions in and has recommended ResMed. The Motley Fool Australia has recommended Alphabet, Amazon, Lovisa, Mastercard, and Propel Funeral Partners. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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