3 big, cheap companies for your share portfolio

What an interesting start to the year we’ve had. January was a shocker for shares as worries about global growth pushed the ASX 200 down 5% over a month and a half. In contrast, February was great as economists decided that poor economic results were probably a result of abnormally cold weather in the US and other major economies, and the Australian reporting season turned out better than expected. Investors who jumped in at the beginning of February were rewarded with a 6% jump in the ASX 200 over the month.

March has been a different story however, as concerns about the Chinese economy slowing and Russia deciding it wanted the Crimean peninsula back pushed shares down 3% over the month so far.

So what trends have we seen?

Well, iron ore companies have been smashed. Notably our biggest miners have fared better than their smaller peers, and are now starting to look cheapish. Companies that performed well during the reporting season have had mixed results, while those that disappointed have seen their share price continue to plunge in many cases.

The best opportunities

For long-term investors, buying big and reliable companies when they’re temporarily out of favor can often be the best investments. An example of this is REA Group Limited (ASX: REA), which is down 5% this month so far at $47, and nearly 10% off the all-time high of $52.45 reached earlier in March. REA has an extremely bright future and solid international exposure which look likely to contribute more to earnings in the coming years.

RedMed Inc (ASX: RMD) is another that looks good value at its current price. The company disappointed somewhat in late February when it reported earnings that were below analyst estimates. There is some concern that US regulatory changes will impact earnings in the future, which has kept the share price subdued. I expect the concerns will pass and RedMed shareholders will be rewarded over the next two to four years.

Finally, Rio Tinto Limited (ASX: RIO) stands out as a company that has been oversold. The recent concern surrounding the iron ore price has pushed Rio’s share price down nearly 13% over the past month. I believe it has been oversold and represents a great buying opportunity for long-term investors.

Foolish takeaway

Foolish investors should always be on the lookout for quality companies at discount prices. I believe the companies above all have extremely bright futures and have been sold off harshly.

Get it now: "2 Hot Stocks for the Next Australian Tech Boom"!

The smart money is already on the move... and savvy investors will want to add these two ASX tech stocks to their portfolios sooner, not later! You can get all the details - including names and codes - in The Motley Fool's brand-new FREE report,
"2 Hot Stocks for the Next Australian Tech Boom." Simply click this link now to claim your FREE copy.

Motley Fool contributor Andrew Mudie does not own shares in any companies mentioned

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.