The market selloff last week was disappointing, but one positive is that it has created a number of buying opportunities for investors.
Three shares that top brokers think are in the buy zone are listed below. Here's why they are bullish on them:
Fortescue Metals Group Limited (ASX: FMG)
According to a note out of Credit Suisse, it has retained its outperform rating and $5.50 price target on this iron ore producer's shares. The broker appears pleased that Fortescue's $500 million on-market share buyback has the potential to be accretive to earnings in FY 2019. It expects this to support its share price and stop it from drifting lower. In addition to this, Credit Suisse believes that Fortescue's shares offer a lot of long-term value for investors at current levels. While I do agree on a lot of this, I'd like to see the discount on its low grade ore reduce before investing.
Ramsay Health Care Limited (ASX: RHC)
Analysts at Citi have retained their buy rating and $62.00 price target on this private hospital operator's shares after its takeover target, Capio, recommended Ramsay's offer. Citi seems happy that this acquisition will mean an expansion into the German and Scandinavian markets. It also sees synergy opportunities for its France-based hospitals. I would agree that this is a good acquisition by Ramsay. However, with its key Australian business continuing to struggle, I intend to stay away from Ramsay until its shares trade on a fairer multiple or its performance at home improves.
Telstra Corporation Ltd (ASX: TLS)
A note out of Goldman Sachs reveals that its analysts have held firm with their conviction buy rating and $3.60 price target on this telco giant's shares following the release of its executive remuneration update. The broker appears pleased with the remuneration plan which includes quantitative targets for the first time. These include plan simplification targets and digital sales. Telstra aims to cut its plan numbers down significantly and is targeting digital sales of 45% by FY 2022, compared to 6.2% in FY 2018. I think Telstra does look attractive at these levels and could be worth a look. Though, it may be prudent to wait for its first half results and confirmation of its full year dividend.
