Peter Switzer and Paul Rickard challenged Charlie Aitken to share his top ASX-listed stocks in our latest monthly webinar. Charlie started by explaining how he screens stocks globally.
“We run a process that tries to find the best companies in the world, just looking at balance sheet, barriers to entry, management, etc., position of the company, longevity, how much cash they generate,” Charlie said.
What Australian stocks rank highest according to his analysis?
“When we run our screens over the Australian market, the top, let’s call it eight companies that we would point to would be CSL, Woolworths, Wesfarmers, Brambles, the Australian Stock Exchange, Sonic Healthcare, Cochlear, and Computershare.”
In addition to these top eight, Charlie also highlighted Magellan Financial Group as a stock “coming off the reserve bench”.
How did Charlie narrow down to these companies?
“I didn’t want to do banks and resources. Let’s think about some good, industrial companies. And that’s what we came up with. So, look, I think there’s still great investment opportunity in Australia,” Charlie noted.
Some of Australia’s biggest healthcare stocks make up Charlie’s top eight.
“I do like healthcare. I think healthcare is a great sector. Great sector to invest in. There’s three healthcare stocks in that list. And I think that most of them are offshore earners. Remember, that’s another thing, we’ve got the global market. The currency has had a bit of a bounce. That’ll probably be a little less of a headwind going forward,” he said.
Paul asked Charlie to elaborate on one of his selections, asking: “Is Brambles sort of firing again?”
“Yeah, getting its act together, I think, slowly. I don’t think it’s going to make us rich or anything. But return on invested capital is improving, the balance sheet’s improving,” said Charlie.
“I think it’s a good business. It’s a large capital, it’s in the top 20. It sits there. But it’s a very big North American grocery play. And I’m very bullish on North America. I think the one place that’s actually got its act together with vaccines and interest rate settings, and sort of less noisy government at the moment is actually North America, you know? United States. So, I think it’s a good exposure to that.”
Click here to watch the full webinar recording or download the transcript.
