Bell Potter names the best shares to own in FY19
By: Tristan Harrison
The biggest share brokers often have the best chance of choosing the right shares because they may have done the ‘best’ analysis. It’s much easier choosing the best shares to beat the market when you can do detailed analysis on most shares on the market and then come to a conclusion.
Bell Potter is one of Australia’s leading brokers and each year comes out with a list of shares it thinks are the best in each industry.
Here are those exciting picks with a quick reason:
Banks and general insurers
Macquarie Group Ltd, ASX: MQG – Its shifting business model and lower-risk annuity-style earnings are attractive with its global profile compared to most of its peers.
CYBG Plc, ASX: CYB – Clydesdale is on course to merge with Virgin Money in the UK which will create strong synergies and be under a popular brand name.
Westpac Banking Group, ASX: WBC – The oldest bank has a reputation for conservative management and perhaps the lower risk profile will translate to continued slow-and-steady growth.
Pendal Group Limited, ASX: PDL – The fund manager is a pick for its focus on future growth with selective expansion of its investment capabilities and seeding new offerings.
Challenger Ltd, ASX: CGF – Government changes to superannuation are predicted to create demand worth over $10 billion for annuity products, which is a big opportunity for Challenger.
Janus Henderson Group, ASX: JHG – Additional cost synergies and cross-selling opportunities could mean double digit profit growth for Janus Henderson in the coming year.
Citadel Group Ltd, ASX: CGL – As the market recognises Citadel as a pure software business Bell Potter believes the market will re-rate it to be on a forward p/e ratio of more than 30.
Integrated Research Limited, ASX: IRI – A global presence, leading market position, high-quality customers, large recurring revenue, long history, barriers to entry, strong balance sheet and good management are all reasons to like this software business over the medium-term.
Technology One Limited, ASX: TNE – This is one of the highest-quality tech shares on the ASX according to Bell Potter. Short-term pessimism is expected to disappear when the business returns to strong growth in FY19.
I’d agree with pretty much every one of these picks, although Westpac would be my least favourite out of them all.
At the current prices I think Challenger and Citadel are my favourite two businesses as they are generating good growth and can do well even if the economy takes a hit. However, the price target of $17.49 for Challenger may be a bit optimistic.
But the real action, in my opinion, is what companies are doing with dividends.
It’s been a nail-biter of a reporting season here in the first half of 2018.
What does this mean for you? Well there is one stock I’ve found that could very well turn out to be THE best buy of 2018. And while there’s no such thing as a ‘sure thing’ when it comes to investing – this ripper might come as close as I’ve ever seen.
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