There are many choices we can make to improve our financial position, such as building our work skillset, saving money, or putting capital into investments. My favourite place to put money is investing in Australian stocks.
Owning stocks can be a very hands-off approach because we don't need to do anything with the businesses to make money – that's up to management and the rest of the staff to do.
There are a lot of different investments we can make on the ASX. Whether that's individual businesses, exchange-traded funds (ETFs), or listed investment companies (LICs).
The three Australian stock investments below strike me as very appealing buys, along with a few other names.
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Betashares Global Quality Leaders ETF (ASX: QLTY)
I think it's a good idea for new investors to start their portfolio with a diversified investment. Having your entire portfolio in just one name isn't spreading the risks very effectively.
However, I'm not necessarily a fan of massive amounts of diversification either because that can lead to smaller returns. It's the best businesses that normally drive the biggest returns for investors. So, why not just own the best ones from around the world?
This ASX ETF aims to invest in just 150 of the highest-quality businesses globally. To be chosen for the QLTY ETF's portfolio, the company must rank well on four metrics: return on equity (ROE), debt-to-capital, cash flow generation, and ability and earnings stability.
A business that ranks well on one or two of those elements is attractive, but having all four means they're the best of the best.
These holdings come from across the world, giving pleasing diversification. While it's not focused on ASX shares, I'm calling it an Australian stock because we can buy it on the ASX and it's about stocks.
Breville Group Ltd (ASX: BRG)
When it comes to individual businesses, I like investing in companies that have a good growth runway. Earnings growth is the key driver of the share price over the long term.
Breville sells a variety of home small appliances, though it's best known for coffee machines. It has a number of brands, including Breville, Sage, Baratza, and LELIT. It also sells roasted coffee beans with the brand Beanz.
The Breville share price has declined more than 20% since August, so I think this is an opportunistic time to jump on the Australian stock, which has a global earnings base across the Americas, Europe, the Middle East, Africa (EMEA), and Asia and the Pacific (APAC) regions.
In FY25, all three major regions – Americas, EMEA and APAC – all delivered double-digit revenue growth of more than 10%. I think the company has strong growth tailwinds, with the ability to benefit from increasing coffee consumption in some countries (such as South Korea and China).
I expect its operating profit margins can rise in the long term, particularly once it has traversed the US-China tariff situation by moving its production for the US market to other countries (such as Mexico).
Premier Investments Ltd (ASX: PMV)
The other Australian stock with a pleasing growth focus is Premier Investments. I like it for two of its segments, though I'm not as confident about Smiggle (one of its businesses).
Premier Investments owns a sizeable minority of Breville, so I believe that's a good asset for all the reasons I explained above.
Peter Alexander is the Premier Investments business that I'm optimistic about. It sells sleepwear and has been growing strongly. In FY25, it grew sales by 7.7% to $548 million, while sales have doubled over the six years since FY19 at a compound annual growth rate (CAGR) of 14.1%. It said its performance has been driven by women's, men's, children's, plus-size, and gift categories. It opened six new stores in FY25, and I expect more store openings in the coming years.
I'm particularly excited by the Australian stock's potential in the UK. It has opened three stores in the UK, but the population is much larger than Australia's, so the opportunity there is large.
I am optimistic that the Premier Investments share price can rise significantly, particularly due to its overseas growth through Breville and Peter Alexander.
