The S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) has gotten off to an incredible start to the new financial year, having already marched 2.4% higher. Now sitting at 5,527 points, it is just 0.5% away from breaking through its six-year high of 5,554.5 points.
While the market's rally has partially been driven by the usual suspects, namely Woolworths Limited (ASX: WOW), Wesfarmers Ltd (ASX: WES) and Telstra Corporation Ltd (ASX: TLS), just to name a few, it has also been led by a number of other blue-chip stocks which have otherwise struggled in recent times. I'm looking at companies such as Coca-Cola Amatil Ltd (ASX: CCL), BHP Billiton Limited (ASX: BHP) and Fortescue Metals Group Limited (ASX: FMG).
Given their recent rallies, is it too late to buy?
Coca-Cola Amatil
Shareholders will look to put the last financial year behind them now. During those 12 months, the stock plummeted more than 25% thanks to a pricing war with Schweppes and declining profitability.
However, the stock has risen nearly 1% today and 6.4% since its recent low ($9.01). The gain can partially be attributed to an upgraded recommendation by UBS – indicating the worst times may now be behind the company – while its solid dividend yield will likely have also attracted investors (it attracted me – I bought the stock at $9.39).
BHP Billiton
Since trading at a low of $35.90 on Monday, the mining giant's shares have risen $2 or 5.6%. It is now trading at $37.90, giving it a forecast dividend yield of 3.4%, fully franked.
Although the headwinds facing the business have not yet subsided, its long-term is still looking very appealing. As it continues to cut costs and improve productivity, the outlook for this miner continues to become more promising. At the very least, BHP deserves a position at the top of your watchlist.
Fortescue Metals Group
Since Monday, Fortescue, Australia's third-largest iron ore miner, has powered 9.9% higher. And that's nothing compared to its 22.3% jump in the last three weeks or so.
With shares now priced at $4.78, the stock is trading on a forecast P/E ratio of 4.5 and a dividend yield of 5%. Although those two measures both look incredibly appealing, I'm steering clear of the stock. The stock has jumped on the back of the rising iron ore price, but I am predicting the commodity could once again fall in value in the near-term which would likely drag Fortescue down with it.
It remains far too vulnerable to the commodity's fluctuations so I would much prefer to invest in a company like BHP or Rio Tinto Limited (ASX: RIO), which boast greater diversification.
An incredible ASX growth opportunity you can't afford to miss…
Coca-Cola Amatil and BHP Billiton both pose as attractive buys today, but their potential has already well and truly been recognised by the market.
There is another ASX company that I bet you've never even heard of, and it's shaping up to be a massive winner for investors who buy today.
