The top stock picks for next year

New Zealand’s top stock picks for 2013 operate in different industries but have important things in common, Brook Asset Management chief investment officer Andrew South says.

Tuesday, December 4th 2012, 3:52PM

by Niko Kloeten

South has picked retirement village operator Summerset, health technology firm Fisher & Paykel Healthcare and logistics company Mainfreight as the three New Zealand stocks most likely to perform well next year. “Summerset if you go back to basics has a very attractive industry structure, very strong growth prospects and obviously a good roll-out strategy which is gathering pace as far as their target build rate goes,” he said.

“They have good management we think and the bottom line is it’s hard to argue with demographics. With an aging population penetration rates are going to increase… we like the industry but we like Summerset more.” South said there was also a strong demographic factor underpinning F&P Healthcare’s growing presence in the sleep apnoea and respirator market. “Obstructive sleep apnoea (OSA) is a great industry; with people getting larger there are more OSA issues. The growth rates are enormous and a lot of people are undiagnosed.”

He said the quality of F&P Healthcare’s products was demonstrated recently when it won an industry award for nasal interfaces for young babies. The company’s growth in disposable products was positive because they had higher margins than its traditional ventilator machines. South said Mainfreight’s situation is “interesting” after some early struggles in Europe following its purchase of Dutch freight firm Wim Bosman last year.

“You could probably say last quarter was a bit of a hiccup with Wim Bosman in Europe but in the long run we like the strategy,” he said. He said Mainfreight is expanding Wim Bossman’s presence in Eastern Europe and increasing its market share in the other countries it operates in, including New Zealand. The three companies all have strong leadership, clear strategies and a history of reaching their targets, South said.

“All three companies have got their own strategy and will do well regardless of slower home markets.”

Niko Kloeten can be contacted at niko@goodreturns.co.nz

« Tyndall Monthly Commentary:Looking beyond the fiscal cliff

Hamish Douglass Unplugged - Latest Video from Adviser Briefing - August 2012 »

Special Offers