You don't need thousands of dollars to start investing in the share market. Even a modest sum like $400 can get you on the path to building wealth — as long as you choose quality companies with strong long-term growth potential.
If you're ready to put that $400 to work today, here are three Australian stocks that analysts think could make a smart starting point for a beginner or someone looking to top up their portfolio. They are as follows:
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Life360 Inc. (ASX: 360)
For investors looking for strong growth, Life360 could be an Australian stock to buy. Best known for its family safety app, Life360 now boasts 83.7 million monthly active users and is generating huge revenue from them. In fact, revenue climbed 32% year over year in the March quarter to US$103.6 million.
The company has turned the corner on profitability, generating positive operating cash flow and growing its paid users at a rapid pace. With new features and monetisation opportunities on the horizon, Life360 could be a stock with multi-year upside.
Morgan Stanley thinks it could be a buy and has an overweight rating and $40.00 price target on its shares.
ResMed Inc. (ASX: RMD)
Another Australian stock that could be a buy is ResMed. It is the global leader in sleep apnoea and respiratory care devices.
This is a huge market to be in, with over 1 billion people estimated to suffer from sleep apnoea globally. And with the vast majority of these sufferers unaware of their condition, ResMed stands to benefit greatly as knowledge increases. The latter is being helped by devices like the Apple Watch, which is now able to diagnose sleep apnoea.
So, with a growth outlook stretching into the decades and a valuation that looks cheap compared to historical multiples, now could be a great time to invest.
The team at Macquarie certainly believes this is the case. The broker has an outperform rating and $48.00 price target on its shares.
Telstra Group Ltd (ASX: TLS)
A final Australian stock to consider buying with the $400 is telco giant Telstra.
Its outlook has become increasingly positive this year thanks to its new Connected Future 30 strategy which aims to expand its return on invested capital to 10% by FY 2030, alongside steady dividend growth and potential buybacks.
This new strategy went down well with analysts at Macquarie. So much so, it recently put an outperform rating and $5.28 price target on its shares.
