One of the great challenges for investors is to keep their emotions in check. In other words, learning to ignore what your heart is telling you in favour of focusing on facts and figures is a difficult skill to learn. And, as with everything in life, some investors are better than others at doing this.
However, if you are able to listen to your head instead of your heart, then you begin to realise that a challenging period for an economy, a sector, or a particular stock is actually a great opportunity to buy in at a low price.
So, while things may not look particularly upbeat for the Aussie economy right now, there are a number of stocks offering excellent long term growth prospects that appear to be worth buying. Here are three prime examples.
Telstra Corporation Ltd
Not content with its dominant position in the Aussie mobile market or its superb long term growth prospects in Asia, Telstra Corporation Ltd (ASX: TLS) is expanding into healthcare, and this provides it with an even more appealing growth profile. That's because Telstra is seeking to revolutionise the way in which medical services are provided, with an online medical consultation via MyCareManager being a key part of this strategy.
And, with the financial firepower to continue to make acquisitions in the e-healthcare space, as well as favourable demographics driving demand upwards over the long term, Telstra's price to earnings (P/E) ratio of 17.9 appears to be attractive. That's especially the case given its diversified (both in terms of regional exposure and product offering) growth potential.
Amcor Limited
While the Aussie economy may be struggling somewhat, emerging markets across the globe continue to offer superb long-term growth potential. Amcor Limited (ASX: AMC) is taking full advantage of this fact, with the packaging company recently announcing an expansion into South America via the acquisition of Souza Cruz's internal packaging operations for $US30m.
This appears to be a sensible move for Amcor and one which again should allow it to benefit from a weaker Aussie dollar. Furthermore, it provides additional diversification for the company, which should enable it to deliver more consistent top and bottom line growth over the long run. And, with Amcor trading on a price to sales (P/S) ratio of just 1.6, it offers good value for money when you consider that the materials sector has a P/S ratio of 2.2.
Domino's Pizza Enterprises Ltd.
Also looking to expand abroad is Domino's Pizza Enterprises Ltd. (ASX: DMP), with the fast food company seeking to more than double its store count in Japan. Of course, that's not to say the company does not have scope to expand in Australia, with it seeking to improve the ordering experience for customers and appealing to younger customers via social media and innovative items on its menu, as well as more opportunity to customise and share via Facebook and Twitter.
This should allow Domino's to grow its bottom line at an annualised rate of 28.3% during the next two years, which makes the company's P/E ratio of 52 seem much more appealing than it does on a standalone basis. In fact, Domino's has a price to earnings growth (PEG) ratio of just 1.83 – much less than the ASX's 2.36.
