Although the ASX has pulled back from its recent highs, many of the more popular stocks remain quite expensive. I and other contributors have drawn attention to more obvious opportunities like Woolworths Limited (ASX: WOW), and less obvious ones like FlexiGroup Limited (ASX: FXL), but there are plenty more stocks I would buy at today's prices.
Despite the fact that I already own two of the following stocks, I would definitely buy all 3 with $10,000 today:
ResMed Inc. (CHESS) (ASX: RMD) – Price to Earnings (P/E) of 28, yields 1.6%
Shares in ResMed took a double beating earlier this year, falling first after weaker than expected quarterly results, and then again after an announcement indicated one of its products raised the chance of heart failure in users.
Although undoubtedly a setback, ResMed's long-term prospects remain intact and further expansions into home medical software and new product development and release should continue to drive strong revenue growth. Share buybacks also drive earnings in a similar way to CSL Limited (ASX: CSL), which is one of the top performing shares on the ASX over the past 20 years.
Recent falls in price provide the opportunity to pick up shares in a defensive, long-term company at a fair price and I would spend a hypothetical $4,000 on ResMed shares.
Coca-Cola Amatil Ltd (ASX: CCL) – P/E of 21, yields 4.2%
Although net profit has risen just 17% over the past decade, strong cash flows have driven big increases in dividends since 2005 and I expect investors will see a strong performance from Coca-Cola over the next decade.
Earlier today I wrote 3 lists on everything you need to know about Coca-Cola Amatil, and I think readers will see that the company presents a compelling case. Even though the Australian market remains subdued, strong exposure to emerging nations could drive big expansions in the size of Coca-Cola's customer base.
Furthermore with the recent article by myself and an in-depth look by contributor Ryan Newman, readers have plenty of information available to make an informed decision. As an existing shareholder, I would invest a hypothetical $3,000 into this stock.
Collection House Limited (ASX: CLH) – P/E of 15, yields 3.8% fully franked
Bad debt collector Collection House has great exposure to bad debts incurred by the finance sector. Such debts appear to be virtually zero at the moment, meaning there's only one way for them to go – up.
While it may be a while before interest rates turn, prompting a rise in bad debts, the fact that Collection House is still delivering double-digit profit growth in slim market times bodes well for the business in the future.
Collection House also has some exposure to emerging markets with its expanding operations in the Phillipines. As an existing shareholder, I would invest another $3,000 into this stock.
