In the sharemarket it’s more important to avoiding losing money than anything else.
Indeed whilst many investors develop checklists to identify a limited number of stocks they believe are worth buying, they are simultaneously avoiding many more potential losers.
3 stocks to consider buying today
- Coca-Cola Amatil Ltd (ASX: CCL) boasts many characteristics prudent long-term investors look for when making their investment decisions. A competitive advantage, sustainable dividend yield and value are some examples. Following a vicious share price sell off in 2013 and again in 2014, CCA’s share price looks to have stabilised. However, in this Fool’s opinion, there’s still plenty of upside potential in its current price of $10.66.
- IMF Bentham Ltd (ASX: IMF) is a $350 million litigation funder with an impeccable track record for backing successful cases. Whilst its earnings can be lumpy (given the nature of its business model), if you have a view to the long-term its current share price looks appealing.
- Computershare Limited (ASX: CPU) is a share registry services giant, with a large recurring revenue base. In addition to dispatching general shareholder notices and reports, Computershare also performs functions such as dividend payments, voting and M&A advisory. Operating in more than 20 countries, Computershare’s geographical presence affords it a strong competitive advantage.
2 stocks to avoid
- Fortescue Metals Group Limited’s (ASX: FMG) fall from grace has been well documented here on fool.com.au over the past few years. As China’s demand for raw materials (like iron ore) continues to fall, Fortescue’s profitability and debt servicing ability has been squeezed significantly. With no competitive advantage, a huge debt pile and dire industry outlook, investors should avoid buying Fortescue shares.
- Qantas Airways Limited (ASX: QAN) is another prominent S&P/ASX200 (ASX: XJO) (Index: ^AXJO) company which has no competitive advantage and sells a commodity product. However, in stark comparison to Fortescue’s 64% share price drop during the past 12 months, Qantas’ share price has flown 170% higher as the oil price plunged. Whilst this is undoubtedly impressive, the volatile oil price is outside the company’s control and few investors could have reliably forecast such a rise in share price. With intense regulation and oversupply of available aircraft seats, long-term investors should avoid Qantas Airways shares.
5 stocks under $5
We hear it over and over from investors, "I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I'd be sitting on a gold mine!" And it's true.
And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!
*Extreme Opportunities returns as of June 5th 2020
Motley Fool Contributor Owen Raszkiewicz is long June 2016 $5.19 warrants Coca-Cola Amatil and owns shares of Computershare Limited. The Motley Fool owns shares of Computershare. You can follow Owen on Twitter @ASXinvest.
We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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