Monday's financial news closed the day with stories of how the ASX "lost" $24 billion because of an improving U.S. jobs market and a possible interest rate hike soon by the US Fed. All I can say is…
Don't Worry… Be Foolish!
The stock market is just a daily auction of shares. Don't get caught up in the excitement of the bidding. Stay cool and stick to your Foolish plan of winning.
Investors will drive up hot stocks in an auction – usually past where they should be. Don't pay premiums. Avoiding the auction altogether until things cool off is a better strategy than overpaying.
Also, low quality stocks at cheap prices are no bargains. Buy distressed stocks but not distressed businesses.
Picking up high-quality companies for fair prices is your goal. Here are three such stocks that might fit the bill.
SEEK Limited (ASX: SEK) is the operator of the number-one job search website seek.com.au and regularly has double-digit earnings growth. After 20 March, the company will enter the S&P/ASX 50 Index (ASX: XFL) (Index: ^AXFL) and become one of the top 50 stocks on the ASX. That says quality all the way.
Perpetual Limited (ASX: PPT) delivered a strong half-year underlying net profit up 30%. That was in line with its financial year 2014 annual results. The fund management company is forecast to grow earnings an average 16% annually over the next two years. Well known for its success with domestic share investing, it is now starting new funds for international equities to take advantage of strong overseas market opportunities.
Ansell Limited (ASX: ANN) looks to be powering ahead in the short term. Analysts expect the producer of plastic gloves and other protective wear to raise its earnings over 20% annually in the next several years. That's higher than its past earnings growth record. Ansell's acquisition of the US-based BarrierSafe company delivered strong returns and significantly improved the company's position in the US market.
