All investors should have a watchlist of stocks they follow closely which they feel could provide market-beating returns. The market does not always act rationally and a watchlist can allow investors to pick the right opportunity to buy into a stock.
The following four stocks may be worth considering for investors looking for long-term returns:
1. Navitas Limited (ASX: NVT) shares are trading close to 52-week lows and could be worth closer inspection. Navitas shareholders have been suffering since it lost a contract with Macquarie University in 2014 and the share price has not looked like recovering ever since. Although there is quite a lot of negative sentiment still surrounding the stock, Navitas is still growing revenues and earnings. With a price to earnings ratio (P/E) of around 18, Navitas may have further to fall even if the long-term fundamentals are still very strong. I would definitely keep Navitas on my watchlist and be tempted to buy at prices below $4.
2. The shares of Automotive Holding Group Limited (ASX: AHG) look reasonably valued at the current price, but the shares have been trading in a tight range for the past two years. Management has been able to produce consistent growth for the last seven years and is confident it can maintain this growth in the future. The company enjoys competitive advantages based on its large scale and also provides investors a fully franked dividend yield of around 5%. The shares have recently come off their recent highs and below $4 may be an opportunity.
3. Wealth manager IOOF Holdings Limited (ASX: IFL) recently off-loaded a weaker part of their business and will now focus on their core wealth management business. It has been consistently growing funds under management and increased its underlying earnings per share by 15% in its half-year results. IOOF offers an attractive income to investors with a current dividend yield of around 5.1%, but the shares look fairly valued at the moment with a P/E of around 18. Below $9.00, shares may be good value.
4. Shares in Mantra Group Ltd (ASX: MTR) have doubled since the company listed just over a year ago. It has been able to exceed its prospectus forecasts and recently upgraded it earnings guidance. Mantra Group has been growing its portfolio of properties which should provide a strong platform for growth. Mantra has a strong balance sheet with conservative gearing which leaves the group in a good position to take advantage of growth opportunities. Although the outlook is positive, the shares are not cheap with shares trading on a P/E ratio over 25. A good buying opportunity may present if the share price falls to around $3.20.
