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3 ASX shares I’d buy before 2020 starts

Tristan Harrison
2020 and beyond

We’re almost into the final month of the year, so I think it’s a good idea to think about the shares we want to buy before the new year starts.

Not only do I think these shares are good value but I think there could be a boost for them in just the next few months:

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) 

Soul Patts has an excellent long-term record of outperforming the ASX index with its investment conglomerate model, its contrarian style and long-term approach. 

Two of its biggest holdings are going through a bit of a tough time at the moment because of the NBN. TPG Telecom Ltd (ASX: TPM) is waiting for the decision about its appeal to merge with Vodafone Australia, which is expected early next year. If TPG gets the go ahead its share price could get a sizeable boost, which should also boost Soul Patts.

Coal business New Hope Corporation Limited (ASX: NHC) is suffering with the coal price a lot lower than in recent times. Coal is facing a long-term decline because of climate concerns, but in the shorter-term coal could just as easily return to a higher price because of cyclical factors.  

Rural Funds Group (ASX: RFF) 

The farmland real estate investment trust (REIT) faced a lot of pressure when it was under attack by shorts, but management defended the business and its asset value.

The Rural Funds share price hit a month low of $1.70 on 6 November 2019 and since then it has risen by 11% as investor confidence about the business returns. A normal December 2019 half year result release in February could give the market even more confidence about Rural Funds. 

It’s still a long way below the pre-short price in the $2.30s, so it could keep slowly climbing with people searching for yield.

Rural Funds continues to target a 4% increase to the distribution each year whilst investing in the farms to improve their value.

Duxton Water Ltd (ASX: D2O) 

The water entitlement company continues to benefit from the drought conditions that are affecting regional areas.

It has been another season of little rainfall, but the crops will still need water so we may see water prices rise further during summer with farmers left with little choice but to buy the necessary water.

Duxton Water is trading at attractive double digit discounts to its pre-tax and post-tax net asset value (NAV) per share. A wet season could easily send water prices down, but expectations are that the next few months will continue to be drier than average.

Foolish takeaway

I think all three businesses could rise over the next few months. At the current prices I think I’m most attracted to Soul Patts because of its diverse portfolio and long-term outlook. There’s a decent chance TPG could win the case, but it’s not priced for that.

The post 3 ASX shares I’d buy before 2020 starts appeared first on Motley Fool Australia.

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Motley Fool contributor Tristan Harrison owns shares of DUXTON FPO, RURALFUNDS STAPLED, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended DUXTON FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2019