As the curtain comes down on 2014 we asked some of our regular writers to select their three favourite investing ideas for the year ahead. In no particular order, here are some of their favourite ideas for a prosperous 2015: Sean O’Neill: Woodside Petroleum Limited (ASX: WPL), BHP Billiton Limited (ASX: BHP), Sonic Healthcare Limited (ASX: SHL) Woodside and BHP Billiton: Both are currently trading at very appealing prices and yields – especially Woodside. Although dividends and earnings will likely decline in 2015 due to commodity price weakness, both are a good long-term investment thanks to solid stewardship and their sheer size providing low costs and large buffers against weaker prices. Sonic Healthcare: This…
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As the curtain comes down on 2014 we asked some of our regular writers to select their three favourite investing ideas for the year ahead.
In no particular order, here are some of their favourite ideas for a prosperous 2015:
Woodside and BHP Billiton: Both are currently trading at very appealing prices and yields – especially Woodside. Although dividends and earnings will likely decline in 2015 due to commodity price weakness, both are a good long-term investment thanks to solid stewardship and their sheer size providing low costs and large buffers against weaker prices.
Sonic Healthcare: This business goes from strength to strength, and an entry into Canada will allow potential for expansion by acquisition. Thanks to recently won contracts, Sonic should experience a significant rise in profit this year, and is the company I feel most likely to succeed in 2015. However all three of my picks are at attractive prices, have powerful moats, significant pricing power, and lots of long-term potential for the level-headed investor.
Sean O’Neill has no financial interest in BHP Billiton, Woodside Petroleum or Sonic Healthcare.
At a time when there is a great deal of uncertainty present among investors, it seems that the market is placing a bigger premium than ever on companies that can grow earnings at a strong rate, and yet do so with relative certainty. That’s why I’m bullish on healthcare stocks like Ramsay Health Care and CSL Limited, and infrastructure/transportation play, Transurban Group.
Certainly, they all have relatively high valuations, with their P/E ratios being 31 (Ramsay), 27 (CSL) and 41 (Transurban). However, with superb track records of reliable earnings growth (annualised growth of 21% for the healthcare stocks and 19% for Transurban over the last 10 years) and double-digit growth prospects over the next two years, I believe the market will re-rate them upwards in 2015.
Motley Fool contributor Peter Stephens has no financial interest in Ramsay Health Care, Transurban Group or CSL Limited.
Mike King: TFS Corporation Limited (ASX: TFC), Nearmap Ltd (ASX: NEA), Newzulu Ltd (ASX: NWZ)
TFS Corporation: Australia’s only listed sandalwood producer and refiner, TFS is finally moving into the production phase, having waited years for sandalwood trees to mature. The company says it expects to make $70 million in net profit in the 2015 financial year, placing it on a P/E ratio of just 7x.
Nearmap: The photo-imaging company, is profitable and recording strong growth in Australia, and has just expanded into the US. Profits may take a hit in 2015, thanks to extra spending on building growth, but this is one company I’m expecting to be much larger and more profitable in years to come.
Newzulu: The crowdsourcing news platform, with more than 150,000 freelance journalists in over 150 countries could be the future of news reporting. It’s still in its early stages, but I’m expecting big things of the company in future. I expect to see the company announce more deals with media companies in the year ahead.
Motley Fool contributor Mike King owns shares in Nearmap and TFS Corporation and has no financial interest in NewZulu.
Despite a strong performance in 2014, I’ve chosen to go with the ASX’s three legal eagles in 2015. That is, law firms Slater & Gordon, Shine Corporate and litigation funder IMF Bentham.
Two of my chosen companies are significantly diversified across geographies and will benefit from a deprecation in the Australian dollar. All three have countercyclical features, which I believe will help them deliver consistent returns throughout what is likely to be a tough year for the domestic economy.
And finally, over the long term, I believe each company has plenty of scope to increase dividends and will reward long-term shareholders with modest capital gains in future years. Although I recommend investors slowly wade into the stocks (rather than buy a big chunk all at one time), I believe that at today’s prices all three companies present as compelling long-term buying opportunities.
Motley Fool Contributor Owen Raszkiewicz owns shares of Slater & Gordon , Shine Corporate and IMF Bentham .
Greencross: The shares have been smashed in recent months despite the absence of any bad news and could be set for a big rebound in 2015. In fact, just to reach its previous high it will need to jump around 30%.
Lindsay Australia: I’m also keen to see how Lindsay performs in 2015 as it continues to expand in far-north Queensland where there is enormous potential for refrigerated seafood transport. Australian seafood is becoming more popular in Asian nations and Lindsay Australia, a transport and logistics company, could benefit substantially.
Shine Corporate: Is another stock to watch closely. The plaintiff litigation company, which continues to expand across Australia and into new practice areas, has a strong management team and practices a high level of discipline before accepting new cases. Shine Corporate could deliver fantastic returns in 2015 and beyond.
Motley Fool contributor Ryan Newman owns shares in Shine Corporate Ltd and has no financial interest in Lindsay Australia or Greencross.
Qube Holdings: Having selected Qube as my Top Stock Pick in November, the 7.4% fall in share price since then has only heightened the appeal of the stock and it remains one of my favoured opportunities for 2015. Importantly, as the owner of logistics assets, Qube has plenty of defensive qualities which is appealing given the current market volatility and economic outlook.
Bellamy’s Australia: The recently listed baby formula business has been a boon for IPO investors who subscribed for stock at $1, with the share price having since rallied to $1.59. Despite the seemingly high multiple, it should be justified by Bellamy’s significant growth opportunities in Australia, China and South-East Asian countries such as Singapore, Hong Kong, Vietnam, Malaysia and New Zealand.
Origin Energy: In 2015, certain growth and defensive investing strategies will no doubt produce outperformance; so too should certain contrarian investment strategies. With leading vertically integrated energy company Origin’s share price losing around 25% in 2014 on the back of a sinking oil price there is definitely scope for the stock to rebound once oil price volatility drops and the huge APLNG Project enters production.
Motley Fool contributor Tim McArthur owns shares in Origin Energy and has no financial interest in Bellamy’s or Qube Holdings.
Andrew Mudie: Capitol Health Ltd (ASX: CAJ), Alumina Limited (ASX: AWC), Newsat Limited (ASX: NWT)
There are many ‘safer’ picks that investors could look at for solid returns in 2015 but the three companies that I like the look of for big returns are Capitol Health, Alumina and NewSat.
Capitol Health: Is following the well-worn aggregation path by buying up diagnostic imaging centres to build a nation-wide network with lower per-centre admin costs. The group recently expanded into NSW which could signal the start of a larger push outside Victoria.
Alumina: Is a mining company with a 60% stake in US-listed Alcoa World Alumina and Chemicals. The company produces alumina and aluminium which experts expect will see a recovery over the next two to three years. Risky, but a small position may be a good option in 2015.
NewSat: Is due to launch its Jabiru-1 satellite in early 2016. Good news about the make or break project and financing requirements could see the share price soar, however this is certainly a high-risk proposition.
Motley Fool contributor Andrew Mudie has no financial interest in Capitol Health, Alumina or Newsat Limited.
Tom Richardson: Retail Food Group Limited (ASX: RFG), Slater & Gordon Limited (ASX: SGH), Acrux Limited (ASX: ACR)
Retail Food Group: Is Australia’s largest multi-brand food franchisor and had a busy 2014 building its coffee business with the acquisitions of Di Bella and Gloria Jean’s coffee. The group also has substantial interests in pizza, cake and donut businesses. On a reasonable valuation, with an attractive yield it could put on some weight in 2015.
Slater & Gordon: These entrepreneurial lawyers have an established personal injury and general legal services business in Australia. However, it’s the move into the UK market that I think still holds big potential in terms of organic and acquisitive growth. These lawyers run a tight ship and this looks a growth stock on a decent valuation.
Acrux: This testosterone therapy business is my wild card pick for out-sized returns in 2015. The stock price will be dictated by sales of its key Axiron product in the U.S. market and consequences of an ongoing regulatory investigation. I suspect the business and share price may be in a much better position this time next year.
Motley Fool contributor Tom Richardson owns shares in Retail Food Group, Slater & Gordon and Acrux.
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