The Motley Fool

Your best investment for Melbourne Cup

Spring Racing Carnival is a highlight of Melbournians’ calendars and certainly a key calendar entry for punters.

While there has been the occasional fortune produced from being a professional punter, there would be few who would advise a lifetime of punting to maximise your chances of a comfortable retirement.

In contrast, a lifetime of investing in the share market is a tried and true way to long-term wealth creation.

So, while a tipple on the horses to enter into the ‘spirit of things’ can be an enjoyable part of an outing to the races, history would suggest it’s a much better bet to invest in companies.

Here are a few stocks with attractive looking ‘odds’….

Despite the obvious benefits of channelling any disposable income into the share market rather than gambling, there is no denying the fact that Australians love to have a punt – in fact it has been said Aussies would even bet on two flies climbing up a wall! Given the popularity of gambling, leading provider Tabcorp Holdings Limited (ASX: TAH) looks a well-placed bet for a company with a predictable earnings stream. Admittedly, Tabcorp does face increased competition from online service providers. However, with a forecast FY 2015 price-to-earnings (PE) ratio of 19x and with a yield of 4.7% fully franked investors are arguably being compensated for the competitive and regulatory risks.

Gerry Harvey, the founder of furniture and electronics retailer Harvey Norman Holdings Limited (ASX: HVN) is possibly as well known for the retail chain that bears his name as for his love of the horses and his ownership of Magic Millions. No doubt the Magic Millions provide more flair than retailing however Harvey Norman shares might be more exciting for investors at present.

The company just provided a positive update for the three months of trading to September. With analysts forecasting earnings per share to rise to 22.1 cents per share in FY 2015, the stock looks quite appealing, trading on a forward PE ratio of 17.2x and a fully franked yield forecast at 4.2%.

Harvey’s good mate, advertising legend John Singleton is a major shareholder in radio broadcaster Macquarie Radio Network Limited (ASX: MRN). Like Harvey, Singleton is also a horse racing fanatic. However, once again investors could be better off focusing on the listed radio company which is selling on a FY 2014 PE and yield of 12x and 11.2% respectively, rather than taking an interest in where Singleton may be placing his bets for the Melbourne Cup.

A $160 billion tech revolution bet

Attention investors: For investors serious about making money, the only 'form' worth studying is the share tables! The Motley Fool has just released a special video report on our analysts’ #1 ASX tech pick -– all about the one Australian company poised to win big from the ‘cloud computing’ trend. (Hint: The shares are already up over 100%!) Click here to claim your FREE copy.

Motley Fool contributor Tim McArthur does not own shares in any of the companies mentioned in this article.

FREE REPORT: Five Cheap and Good Stocks to Buy now…

Our Motley Fool experts have FREE report, detailing 5 dirt cheap shares that you can buy today.

One stock is an Australian internet darling with a rock solid reputation and an exciting new business line that promises years (or even decades) of growth… while trading at an ultra-low price…

Another is a diversified conglomerate trading near a 52-week low all while offering a 2.7% fully franked yield…

Plus 3 more cheap bets that could position you to profit over the next 12 months!

See for yourself now. Simply click the link below to scoop up your FREE copy and discover all 5 shares. But you will want to hurry – this free report is available for a brief time only.