After recent market wobbles some of the local stock market’s better stocks have come back in price, which gives investors an opportunity to pick up some good quality companies on cheaper valuations. Stock markets in general will commonly fall in value due to wider market perceptions about rising geo-political risks like North Korea that have no relevance to the operational performance of companies trading on the local stock market. As such it makes sense to take advantage of these general sell offs to buy low and hold through future market wobbles in anticipation of significant capital gains over the medium…
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After recent market wobbles some of the local stock market’s better stocks have come back in price, which gives investors an opportunity to pick up some good quality companies on cheaper valuations.
Stock markets in general will commonly fall in value due to wider market perceptions about rising geo-political risks like North Korea that have no relevance to the operational performance of companies trading on the local stock market.
As such it makes sense to take advantage of these general sell offs to buy low and hold through future market wobbles in anticipation of significant capital gains over the medium term.
Below I outline six shares I’d happily buy today.
ASX Ltd (ASX: ASX) is a monopoly business that offers investors a good yield and defensive revenue or profit streams. In other words it should provide an investment portfolio some ballast over the long term. Furthermore, 2018 has seen a return to volatility across stock markets, with the ASX’s fees directly leveraged to trading volumes. The stock has fallen around 6% since February which gives investors an opportunity to buy a solid share market performer offering an estimated forward yield of 3.8% plus full franking credits.
Gentrack Group Limited (ASX: GTK) is a software-as-a-service business that’s clients generally include large airports or utility companies around Australia and Europe. It has an impressive track record of growth, strong balance sheet and attractive economics as a software business. It also has a management team that delivers on its forecasts and despite the expensive valuation I’d happily take a small position at today’s prices of $6.28.
Magellan Financial Group Ltd (ASX: MFG) shares are selling for $22.40 today on around 17x estimates for FY 2018’s per share. At these prices I expect the shares also offer a forward yield in excess of 4% (plus full franking credits), while offering investors exposure to overseas equities markets. The group’s core institutional funds management business also appears to be growing nicely again, while the retail business may still be suffering from the after effects of its Magellan Global Trust (ASX: MGG) raising. Overall though I expect it will offer healthy total returns for investors at today’s prices.
Ramsay Health Care Limited (ASX: RHC) is a private hospital operator that has lifted dividends from 38 cents per share in 2006 to $1.345 per share in 2016. Unsurprisingly, the share price has rocketed in that period and Ramsay’s brownfield development potential suggests it can deliver steady profit and dividend growth into the future. The primary risk is that Ramsay carries a tonne of debt, which means the share price could be volatile.
Cogstate Group Ltd (ASX: CGS) is a small-cap business in the healthcare space that I covered in more detail yesterday. It’s in the niche space of cognitive function testing largely on behalf of large pharmaceutical companies. The company has a decent balance sheet, track record of growth and is on the verge of tipping into consistent profitability. The valuation also looks attractive and I’d rate it a speculative buy.
Apple Inc. (NASDAQ: APPL) is arguably the world’s best company and still trades on a relatively attractive valuation given its dominant competitive position and strong outlook. Every investor is likely to be familiar with Apple’s products (iPhones, etc) and its services businesses ( iTunes, Apple TV, etc,) that help it build a network effect and provide additional revenue streams. The stock sells on for US$172.90 today and looks a buy in my opinion.
It's been a nail-biter of a reporting season here in the first half of 2018.
But the real action, in my opinion, is what companies are doing with dividends.
What does this mean for you? Well there is one stock I've found that could very well turn out to be THE best buy of 2018. And while there's no such thing as a 'sure thing' when it comes to investing - this ripper might come as close as I've ever seen.
You can find Tom on Twitter @tommyr345
The Motley Fool Australia owns shares of ASX Limited. The Motley Fool Australia has recommended GENTRACK FPO NZ and Ramsay Health Care Limited. 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 Scott Phillips.