Should you buy Ramsay Health Care Limited, Wesfarmers Ltd and Commonwealth Bank of Australia?

With 2014 having been such a mixed year for Aussie stocks, it’s tough to decide how optimistic to be when looking ahead to 2015.

After all, low interest rates could help to stimulate the Aussie economy and commodity prices could pick up next year.

Of course, 2015 could prove to be little more than a continuation of the last year, with investors ultimately being left disappointed with the performance of the ASX.

That’s why now, more than ever, it may be prudent to take each stock on a case-by-case basis when assessing whether you should buy a slice of it. With that in mind, should you buy shares in the following three companies?

Ramsay Health Care Limited

Based on its recent share price performance, Ramsay Health Care Limited (ASX: RHC) seems to be worth investing in. That’s because it has risen by a whopping 42% over the last year.

Stocks such as Ramsay tend to perform well in all economic weathers, with its top and bottom lines being relatively independent of the economic cycle. It also has impressive long-term growth potential in China (where it has recently entered into a joint venture), Europe and Australia.

So, although shares in the company have a P/E ratio of 31.2, their rating could move higher – especially when they have a PEG ratio of 1.72 (versus 2 for the ASX).

Wesfarmers Ltd

Many investors are finding Wesfarmers Ltd (ASX: WES) a difficult stock to call at the moment. That’s because its diverse retail interests including Bunnings and Target should benefit from low interest rates (as consumers are incentivised to spend rather than save), but the growth of Costco and Aldi could put the brakes on its longer-term growth prospects.

Still, Wesfarmers continues to appeal as an income and value play. Certainly, its P/E ratio of 20.2 seems rather rich, but its PEG ratio of 1.45 and price to sales ratio of 0.8 seem to indicate that its shares are not yet fully valued. In addition, a fully franked yield of 4.8% could prove to be extremely appealing should interest rates fall next year.

So, while Wesfarmers has seen its share price underperform the ASX by 4% in the last month, now could be a good time to buy a slice of the growing conglomerate.

Commonwealth Bank of Australia

With the investment outlook being decidedly uncertain at the moment, one consideration for investors could be the volatility of their portfolios. One way to measure this is via beta, with a lower figure indicating that share price fluctuations should (in theory) be smaller.

In this regard, Commonwealth Bank of Australia (ASX: CBA) seems to offer considerable promise. That’s because it has a beta of just 0.77, which means that its share price should move by 0.77% for every 1% change in the ASX.

Of course, there’s more to CBA than just a low beta. For example, it has a highly appealing and fully franked yield of 5%, and having delivered annualised increases in cash flow and earnings of 19.3% and 11.6% respectively over the last five years, it has a strong track record of delivering excellent profitability growth.

As a result, it could prove to be a strong performer next year, just as it has been in 2014, where its shares have delivered a double-digit total return.

While CBA, Ramsay and Wesfarmers could be worth adding to your portfolio, there's another ASX stock that I believe is an even better opportunity.

In fact, it's recently been named as The Motley Fool's Top Stock For 2015 due to its stunning earnings growth potential and extremely attractive valuation. As a result, it really could make a major impact on your bottom line over the next year.

Click here to find out all about it - it's completely free and without obligation to do so.

Motley Fool contributor Peter Stephens does not own shares in any of the 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.