In a Fairfax article today, investment bank Credit Suisse highlighted some of its top stock picks for 2015 and forecast a bullish target for the broader Australian share market.
The bank said, "We expect Aussie equities will provide a total return of around 15 per cent… this is in-line with the long-term average"
If its forecasts are right, it'll be a relief for many share market investors, who experienced meagre gains in 2014.
The investment bank singled out a number of stocks it believes will outperform in 2015, including miner BHP Billiton Limited (ASX: BHP) and supermarket giant Woolworths Limited (ASX: WOW).
Indeed there could be reason to be bullish on both companies throughout the coming year.
For example each are industry leaders, expected to pay handsome fully franked dividends in the year ahead and have recently been sold off.
Sure, both companies have uncertain near-term outlooks but great value investments nearly always do. As Warren Buffett says, in the share market you pay a lot for a cheery consensus.
Admittedly BHP could have its dividend cut in the wake of falling commodity prices, despite its recent track record suggesting otherwise. However it has capable management and a reputation for delivering solid shareholder returns over the long term.
In the past six months it also could be argued Woolworths shares have been thrown out with the bath water. Despite concerns over competition from international rivals Aldi and Costco, Woolies is a great defensive business which will likely experience modest earnings and dividend growth over the long term.
Foolish takeaway
If the local S&P/ASX 200 (ASX: XJO) (INDEX: ^AXJO) does go on to reach 6000 by the end of the year, it'll require a strong performance from a number of blue-chip stocks outside the big four banks, which appear fully valued. As such, keeping Woolworths and BHP on your watchlist, and waiting for the right price to enter, mightn't be such a bad idea.
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