With Australian shares looking so expensive that one fund manager reportedly sold all his investments and returned the money to investors, it’s no wonder some Australians are getting nervous about the share market.
Still, it never hurts to have a few companies in mind that you’d pounce on in the event of a market crash. Here are two I’d buy in a flash if they were cheaper:
CSL Limited (ASX: CSL)
CSL Limited produces life-saving blood products for customers with rare diseases worldwide. It generates oodles of cash from its sales, which it reinvests into research & development, acquiring new businesses, and buying back shares. CSL recently bought the Seqirus vaccine business, which is currently unprofitable but expected to become a significant contributor to earnings in the next couple of years.
The company also has several promising treatments in the later stages of development which, if successful, could generate new earnings streams for years into the future. The main drawback is price, but I would start to get pretty interested in CSL below $100.
Fisher & Paykel Healthcare Corp Ltd (ASX: FPH)
Fisher & Paykel designs and manufactures oxygen masks, humidifiers, and other types of breathing equipment and consumables for use in hospitals. It’s rapidly expanded its operations over the past few years and has delivered stellar results for investors. Now, the company is increasingly migrating its manufacturing to Mexico, which is expected to reduce costs and improve profitability.
The company also has an active research & development team, and spends a similar percentage of revenue to CSL (10%) on its R&D every year. New products have been significant contributors to earnings growth so far, and there are more in the works. Again price is an issue, but I’d be quite interested in Fisher & Paykel around $8.