While not as widely known as the benchmark S&P/ASX 200 (Index: ^AXJO) (ASX: XJO), I believe the S&P/ASX Small Ordinaries (Index: ^AXSO) (ASX: XSO) is home to some of Australia's brightest companies that investors should be keeping a close eye on.
Here are three which I think could be in the buy zone today:
Collins Foods Ltd (ASX: CKF)
Whilst it may be too soon to label the KFC operator as the next Domino's Pizza Enterprises Ltd. (ASX: DMP), Collins Foods has recently followed in the footsteps of Domino's by expanding its presence overseas in the European market. I believe this will provide the company with bucket loads of growth over the next decade, making it a great long-term buy and hold investment option. I feel this is especially the case today with its shares changing hands at under 14x trailing earnings.
Greencross Limited (ASX: GXL)
I believe Australia's leading veterinary company is another great option for buy and hold investors. Recent research by the RSPCA reveals that a remarkable 63% of Australian households currently own pets. With such high levels of pet ownership, I expect demand for its veterinary clinics and supplies from its Petbarn stores will continue to grow strongly over the next few years. Furthermore, as the veterinary market is still highly fragmented, I feel Greencross will be able to continue its growth through acquisition strategy for some time to come.
Japara Healthcare Ltd (ASX: JHC)
As a leading aged care provider, I think Japara is a great way for investors to profit from Australia's ageing population. Demand for aged care services is expected to increase substantially over the next decade and Japara is positioning itself perfectly to meet this demand. Management intends to deliver over 1,100 new greenfield places by FY 2020. I expect this increase in places to result in a huge boost to earnings and its dividend. At present Japara provides investors with a fully franked trailing 5.4% dividend.
