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Expert investors have revealed their pick of companies listed on the Australian sharemarket that could reward investors in the new year and beyond.
The companies have differing risk-versus-return profiles, from those that would not look amiss in a portfolio of older investors mostly looking for income, to those for investors with very long investment time frames who can take more risk.
Transurban, which builds and operates toll roads in Australia and North America, is one of the picks of Atlas Funds Management’s Hugh Dive.Credit: Steven Siewert
Michael Gable, the founder of Fairmont Equities, is positive about the Australian sharemarket. Inflation is trending down, interest rates will eventually be lowered and that will be good news for shares, he says.
Gable likes BHP, which “should continue to pay high dividends for the next few years, while also seeing an appreciation in its share price”.
For investors prepared to take on more risk, he likes uranium miner Paladin. The company will restart uranium production in the early part of next year. Gable expects its share price to climb as the world is scrambling to secure uranium for nuclear power, as the pressure builds to meet zero-emission targets.
“Global supply [of uranium] is extremely low and will take years to catch up to the demand,” Gable says.
Chris Conway, the managing editor at Livewire Markets, picks Boral, the construction materials company, as an investment that could be suitable for cautious investors.
It is a major beneficiary of infrastructure spending, with projects such as the Melbourne Metro Tunnel.
The Australian government’s $120 billion, 10-year funding allocation, for nation-building infrastructure is set to benefit Boral, Conway says.
Henry Jennings, senior market analyst at Marcus Today, likes ‘buy now, pay later’ provider, Zip Co as a more speculative play. Not only are its operations in Australia, New Zealand and North America going well, but bad debts are below what the company had forecast, Jennings says.
Hugh Dive, the chief investment officer at Atlas Funds Management, nominates Transurban as a conservative pick.
Transurban builds and operates toll roads in Australia and North America. Dive says the company has revenue that is generally linked to inflation, and has developed existing assets by adding extra lanes to accommodate additional traffic.
Lithium miner Mineral Resources is his speculative pick. Sentiment towards lithium stocks went from the “penthouse to the outhouse” along with a sharp fall in the lithium price, Dive says.
“Mineral Resources is the most attractive way to get exposure to the sector,” he says. The company has iron ore and lithium assets and provides mining services to external clients.
“It has more than one string to its bow that can keep…the cash flowing if lithium prices remain depressed,” Dive says.
Duratec Australia, a small, but fast-growing engineering construction remediation contractor, is Angie Ellis’ conservative pick. “I like the diversification – it operates across defence, mining, oil and gas, marine, building and energy,” Ellis says.
Angie Ellis, a private investor and frequent winner of this masthead’s Shares Race, likes Credit Clear, which has a “customer accounts receivables platform”, as a speculative play.
Its acquisition of Debt Recoveries Australia, which specialises in insurance claim recoveries, will expand Credit Clear’s presence in the insurance sector, Ellis says.
The experts may own shares personally in the companies they have nominated. Share investing always comes with risks and readers should make their own enquiries.
- Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.
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