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.

Diversified financials

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.

Technology

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.

Foolish takeaway

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.

Simply enter your email address below to to access the share and your FREE report.

Data as of 18 July 2018. Tristan Harrison owns shares of Challenger Limited. The Motley Fool Australia owns shares of and has recommended Challenger Limited. The Motley Fool Australia owns shares of Citadel Group Ltd. The Motley Fool Australia has recommended Integrated Research Limited. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. For more information about The Motley Fool see our Financial Services Guide. All returns cited are hypothetical and based on the percentage change between the stock price at the time of recommendation and the current or sell price (if the position has been closed) at the time of publication. Brokerage, taxes and any other associated costs are not taken into account. Please remember that investments can go up and down. Past performance is not necessarily indicative of future returns. Performance figures are not intended to be a forecast and The Motley Fool does not guarantee the performance of, or returns on any investment. Any money back guarantee is strictly limited to the subscription price paid for the product.

By submitting your email address, you consent to receiving our free product Motley Fool Take Stock, and other products and services that we think might interest you. You can unsubscribe at any time. Please read our Privacy Statement and Terms of Service.

© 2009 - 2018 The Motley Fool Australia Pty Ltd. All rights reserved.