Wesfarmers Ltd
With the outlook for the Aussie economy still uncertain, the defensive nature of stocks like Wesfarmers Ltd (ASX: WES) could prove to be a real asset. Certainly, it will benefit from an improving economy, but the nature of the products it sells means that its top and bottom lines are relatively resilient and provide a degree of stability during an uncertain period. For example, over the last 10 years, Wesfarmers has been able to increase sales at an annualised rate of 11.3% per annum, which is highly impressive.
So, while Wesfarmers does trade on a rich price to earnings (P/E) ratio of 21.4, its rating could go higher if the outlook for the economy does not improve following the RBA's interest rate cut. As such, now could be a good time to buy a slice of it.
Macquarie Group Ltd
Even though investment bank and wealth management company, Macquarie Group Ltd (ASX: MQG), is much more cyclical than Wesfarmers, it too could prove to be an excellent buy at the present time. That's because it is forecast to increase its bottom line at an annualised rate of 11.5% during the next two years, after its recent update showed that the company is performing better than expected.
Of course, Macquarie hasn't delivered such strong performance all of the time, with its annualised increase in earnings being just 1.6% over the last 10 years, for example. However, at the present time investor sentiment seems to be on the up and momentum appears to be with Macquarie, as shown in its total shareholder return being 25.4% over the last year.
Looking ahead, this could continue and Macquarie could not only beat the ASX in 2015, it could post stunning returns if its optimistic earnings numbers seem likely to be met.
Oil Search Limited
With the price of oil stabilising in recent weeks, the share prices of a number of oil stocks have done likewise. However, Oil Search Limited (ASX: OSH) is still down 10% in the last six months, although this could provide an opportunity to buy in at a more attractive share price.
That's because Oil Search is on the cusp of much improved revenues, with the Papua New Guinea liquefied natural gas (PNG LNG) project coming on stream in recent months, Oil Search is set to see its top and bottom lines move higher. And, with the output being fully contracted, any price pressures in regards to LNG are unlikely to hurt Oil Search's near-term prospects.
Furthermore, with a price to earnings growth (PEG) ratio of just 0.34, Oil Search could be a stunning growth play. Therefore, now could be the right time to buy a slice of it.
