Now that the holiday season is coming up investors looking to create some seasonal cheer throughout the whole of 2016 should look to add some top-quality stocks to their portfolio.
Looking ahead all signs point to a soft 2016 for the Australian economy with low inflation, diminishing terms of trade, low real wage growth and low GDP growth. Investors then should look to stocks with a fair amount of overseas exposure for the best returns in the year ahead, with the three below offering particular potential.
Westfield Corp Ltd (ASX: WFD) operates exclusively overseas and offers an excellent blend of growth, income and value at its current price of $9.41 a share. The group just posted a strong quarter of retail sales growth up 7.1% to the year ending September 2015. It also has a giant $11.4 billion development pipeline and this family run business has the crucial management expertise and focus on long-term returns to mean it looks a good bet for 2016.
Catapult Group International Ltd (ASX: CAT) is the sports analytics business that is growing its overseas sales and a potentially market-leading reputation within the huge professional sports markets it services. The company’s GPS tracking technology lets sports coaches track athletes to scientifically assess performance and potentially improve it on an individual or team basis.
The equipment has been fast selling from Millwall Football club to Miami Dolphins and Melbourne Rebels, with a huge addressable market of global professional sports teams and leagues. Shares sell for $1.80 today and may deliver some exceptional performance in 2016.
XERO FPO NZ (ASX: XRO) This cloud accounting business has been growing fast and winning market share in its core Australia and New Zealand markets, while progress in the UK has also been strong. The software’s usability and innovative features are its competitive strengths that it will hope to use to take the fight for market share versus Intuit in the huge US market it is now attempting to grow into. Xero may only need to achieve moderate success in the US market to more than justify today’s valuation at $16.60 per share.
Conservative investors should consider Westfield Corp as the best defensive investment, although those looking to move higher up the risk curve with the chance of strong returns could consider either Xero or Catapult.